Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11. (i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-division, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof. (ii) In the event that: (A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or (B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) (iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date. (b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend (i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 2 contracts
Samples: Rights Agreement (Miix Group Inc), Rights Agreement (Miix Group Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.the
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he such holder would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to Section 24 hereof, in the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become Person becomes an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, then each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at a price equal to the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths hundredths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)first
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation incorporation, as amended, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are Rights, is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock stock, such as the Preferred Stock, which the Board of Directors of the Company has deemed to have substantially the same value or economic rights as shares of Common Stock (such shares of preferred stock being referred to herein as stock, "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "Spread" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchlikely
Appears in 2 contracts
Samples: Rights Agreement (Eloyalty Corp), Rights Agreement (Eloyalty Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company Corporation shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred StockShares, (C) combine the outstanding Preferred Stock Shares into a smaller number of shares, Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Shares (including any such reclassification in connection with a consolidation or merger in which the Company Corporation is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to before such date and at a time when the Preferred Stock Shares transfer books of the Company Corporation were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Corporation issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior tobefore, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) In the event that:
(A) any Person, shallalone or together with its Affiliates and Associates, at any time after the Rights Dividend Declaration Date, be or shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall, for a period of 60 days after the later of the occurrence of any such event or the effective date of an appropriate registration statement under the Act pursuant to Section 9 hereof, have a right to receive, upon exercise thereof at a price equal to the then current Purchase Price, in accordance with the terms of this Agreement, such number of Common Shares (or, in the discretion of the Board of Directors, one one-hundredth of a Preferred Share) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one- hundredths of a Preferred Share for which a Right was exercisable immediately before the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) 50% of the then current per share market price of the Corporation's Common Shares (determined pursuant to Section 11(d) hereof) on the date of such first occurrence (such number of shares being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply, and no adjustment shall be made pursuant to this Section 11(a)(ii);
(iii) In the event that there shall not be sufficient treasury shares or authorized but unissued (and unreserved) Common Shares to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) and the Rights become so exercisable (and the Board has determined to make the Rights exercisable into fractions of a Preferred Share), notwithstanding any other provision of this Agreement, to the extent necessary and permitted by applicable law, each Right shall thereafter have represent the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of (x) a number of one one-thousandths of a share of Preferred Stock, such (or fractions of) Common Shares (up to the maximum number of shares of Common Stock of the Company as shall equal the result obtained by (xShares which may permissibly be issued) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise one one- hundredth of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread")Preferred Share or a number of, and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment or fractions of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company Corporation (includingor, without limitationin the discretion of the Board of Directors, shares, or units of shares, of preferred stock debt) which the Board of Directors of the Company Corporation has deemed determined to have substantially the same aggregate current market value (determined pursuant to Section 11(d)(i) and (ii) hereof, to the extent applicable,) as shares of one Common Stock Share (such shares number of, or fractions of, Preferred Shares, debt, or other equity securities or debt of preferred stock the Corporation, being referred to herein as a "common capital stock equivalentsequivalent")), (4) debt securities of equal in the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board number of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyAdjustment Shares; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date")sufficient Common Shares and/or capital stock equivalents are unavailable, then the Company shall be obligated to deliverCorporation shall, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and thenpermitted by applicable law, take all such action as may be necessary to authorize additional Common Shares or capital stock equivalents for issuance upon exercise of the Rights, including, if necessary, cashthe calling of a meeting of stockholders; and provided, which shares further, that if the Corporation is unable to cause sufficient Common Shares and/or cash have an aggregate value equal capital stock equivalents to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized available for issuance upon exercise in full of the Rights, then each Right shall thereafter represent the 30 day period set forth above may right to receive the Adjusted Number of Shares upon exercise at the Adjusted Purchase Price (as such terms are hereinafter defined). As used herein, the term "Adjusted Number of Shares" shall be extended equal to that number of (or fractions of) Common Shares (and/or capital stock equivalents) equal to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization product of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, the number of Adjustment Shares and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 is the number of shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price Common Shares (and/or capital stock equivalents) available for issuance upon exercise of the total number of shares of Preferred Stock and/or equivalent preferred stock 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, Rights and the denominator of which shall be is the aggregate number of shares Adjustment Shares otherwise issuable upon exercise in full of Preferred Stock outstanding on such record date, plus the all Rights (assuming there were a sufficient number of additional shares of Preferred Stock and/or equivalent preferred stock Common Shares available) (such fraction being referred to be offered for subscription or purchase (or into which as the convertible securities so to be offered are initially convertible"Proration Factor"). In case such subscription price may be paid by delivery The "Adjusted Purchase Price" shall mean the product of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by Purchase Price and the Proration Factor. The Board of Directors of the Companymay, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock owned by or held for the account of the Company but shall not be deemed outstanding for required to, establish procedures to allocate the purpose right to receive Common Shares and capital stock equivalents upon exercise of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights 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 a distribution to all Rights among holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such.
Appears in 2 contracts
Samples: Rights Agreement (Impac Mortgage Holdings Inc), Rights Agreement (Impac Commercial Holdings Inc)
Adjustment of Purchase Price. AND NUMBER AND KIND OF SHARES OF COMMON STOCK OR NUMBER OF RIGHTSWARRANTS. The Purchase Price, Price in effect at any time and the number and kind of shares covered by each Right and securities purchasable upon the number exercise of Rights outstanding are the Warrants shall be subject to adjustment from time to time upon the happening of certain events as provided in this Section 11.follows:
(ia) In the event case the Company shall at any time after the date of this Agreement (Ai) declare a dividend or make a distribution on the Preferred its outstanding shares of Common Stock payable in shares of Preferred Common Stock, (Bii) subdivide the or reclassify its outstanding Preferred Stockshares of Common Stock into a greater number of shares, or (Ciii) combine the or reclassify its outstanding Preferred shares of Common Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Exercise Price in effect at the time of the record date for such dividend or of distribution or the effective date of such sub-division, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) reclassification shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as adjusted so that it shall equal the result obtained price determined by (x) multiplying the then current Purchase Price by a fraction, the then number denominator of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient after giving effect to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread")action, and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Common Stock outstanding on immediately prior to such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computationaction. Such adjustment shall be made successively whenever such a record any event listed above shall occur.
(b) Whenever the Purchase Price payable upon exercise of each Warrant is adjusted pursuant to Subsection (a) above, the number of Shares purchasable upon exercise of this Warrant shall simultaneously be adjusted by multiplying the number of Shares initially issuable upon exercise of this Warrant by the Purchase Price in effect on the date is fixedhereof and dividing the product so obtained by the Purchase Price, and as adjusted.
(c) No adjustment in the event that such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which required unless such adjustment would then be require an increase or decrease of at least five cents (0.05) in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such dateprice; provided, however, that any adjustments which by reason of this Subsection (c) are not required to be made shall be carried forward and taken into account in any subsequent adjustment required to be made hereunder. All calculations under this Section 8 shall be made to the nearest cent or to the nearest one-hundredth of a share, as the case may be. Anything in this Section 8 to the contrary notwithstanding, the Company shall be entitled, but shall not be required, to make such changes in the event Purchase Price, in addition to those required by this Section 8 as it shall determine, in its sole discretion, to be advisable in order that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a any dividend or distribution on in shares of Common Stock payable or any subdivision, reclassification or combination of Common Stock, hereafter made by the Company shall not result in shares any Federal Income tax liability to the Registered Holder of Common Stock or securities convertible into shares of Common Stock (including Warrants).
(d) Whenever the Purchase Price is adjusted, as herein provided, the Company shall promptly but no later than 20 days after any request for such an adjustment by the Registered Holder, cause a notice setting forth the adjusted Purchase Price and adjusted number of Shares issuable upon exercise of each Warrant, and, if requested, information describing the transactions giving rise to such adjustments, to be mailed to the Registered Holder at his last address appearing in the warrant register of the Warrant Agent, and shall cause a certified copy thereof to be mailed to its Warrant Agent. The Company may retain a firm of independent certified public accountants selected by the Board of Directors (who may be the regular accountants employed by the Company) to make any computations required by this Section 8, and a certificate signed by such firm shall be conclusive evidence of the correctness of such adjustment.
(e) In the event that at any time, as a result of an adjustment made pursuant to Subsection (a) above, the Registered Holder of this Warrant thereafter shall become entitled to receive any shares of the Company, other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, thereafter the number of such other shares so receivable upon exercise of this Warrant shall be subject to adjustment from time to time in a manner and prior on terms as nearly equivalent as practicable to the expiration of the requisite 30 Trading Day or 10 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 provisions with respect to securities listed or admitted to trading on the NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported contained in Subsection (a) above.
(f) Irrespective of any adjustments in the principal consolidated transaction reporting system with respect Purchase Price or the number or kind of shares purchasable upon exercise of this Warrant, Warrants theretofore or thereafter issued may continue to securities listed on express the principal national securities exchange on which the same price and number and kind of shares of Common Stock as are listed or admitted to trading or, if the shares of Common Stock 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 stated in the over-the-counter market, as reported by the National Association of Securities Dealers Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchsimilar Warrants initially issuable pursuant to this Agreement.
Appears in 2 contracts
Samples: Warrant Agreement (Xytronyx Inc), Warrant Agreement (Xytronyx Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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 in Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or capital stock and other capital stock, as the case may be, securities which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he such holder would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In Subject to Section 24(c) of this Agreement, in the event that:
(A) any Person, shallalone or together with its Affiliates and Associates, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have shall become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock (except pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one Company and are not Acquiring Persons or more investment banking firms, Affiliates or Associates thereof to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
shareholders (Bother than the Person or an Affiliate or Associate thereof on whose behalf the offer is being made) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation"Permitted Offer")), then, promptly following the first occurrence of any an event described in this Section 11(a)(ii) Event), proper provision shall be made so that each holder of a Right (Right, except as provided below and in Section 7(e) hereof, shall, for a period of sixty (60) shall thereafter days after the later of the occurrence of any such event and the effective date of an appropriate registration statement pursuant to Section 9, have the a right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share shares of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock for which one a Right was is then exercisable immediately (prior to the first occurrence of a any adjustment required pursuant to this Section 11(a)(ii)) Event, and (y) dividing that product by fifty percent (which, following 50%) of the current market price per one share of Common Stock (determined pursuant to Section 11(d)) on the date of the occurrence of the event set forth in this subparagraph (ii) (such first occurrence, shall thereafter be number of shares being referred to as the "Purchase Price" for each Right number of Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and for all purposes no adjustment shall be made pursuant to this Section 11(a)(ii); and provided, further, that such sixty (60) day period shall not be deemed to run during any period in which the exercise of the Rights or the fulfillment by the Company or the Rights Agent of its or their obligations under this Agreement)Agreement shall be enjoined or otherwise prohibited in full or in part by any court or other governmental agency or body.
(iii) Unless at least In lieu of issuing shares of Common Stock in accordance with Section 11(a)(ii) hereof, the Company may, if a majority of the members of the Company's Board of Directors who are then in office determines that such action is necessary or appropriate and not officers contrary to the interests of the Company determine that the following is not permitted by the terms holders of any agreement or instrument Rights, elect to which the Company is a party on the date of this Agreement (orand, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number Board of Directors has not exercised the exchange right contained in Section 24(c) hereof and there are not sufficient treasury shares and authorized but unissued shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable take all such action as may be necessary to authorize, issue or pay, upon the exercise of a Right the Rights, cash (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment including by way of the applicable Purchase Price, (1) cash, (2) a reduction in of the Purchase Price), (3) Common Stock or other equity securities of the Company (includingproperty, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents"))Stock, (4) debt other securities of the Company, (5) other assets, or (6) any combination of the foregoing thereof having an aggregate value equal to the Current Valuevalue of the shares of Common Stock which otherwise would have been issuable pursuant to Section 11(a)(ii), where such which aggregate value has been shall be determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by a majority of the Board of Directors. For purposes of the preceding sentence, the value of the Common Stock shall be determined pursuant to Section 11(d) hereof and the value of any preferred stock or preference stock which a majority of the Board of Directors determines to be a "common stock equivalent" shall be deemed to have the same value as the Common Stock. Any such election by the Board of the Company; provided, however, if the Company shall not have Directors must be made adequate provision to deliver value pursuant to clause and publicly announced within sixty (B60) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "event described in Section 11(a)(ii) Trigger Date"), then shall have occurred. Following the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment occurrence of the Purchase Priceevent described in Section 11(a)(ii) hereof, shares a majority of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine then in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) office may suspend the exercisability of the Rights until for a period of up to sixty (60) days following the expiration date on which the event described in Section 11(a)(ii) shall have occurred to the extent that such directors have not determined whether to exercise their rights of the Substitution 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 sentence and to determine the value thereofelection under this Section 11(a)(iii). In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case If the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares having the same or more favorable rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price current market price (as determined pursuant to defined in Section 11(d) hereof)) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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, current market price and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in reasonably and with good faith to the holders of Rights by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rightsconclusive for all purposes. Shares of Preferred Stock 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 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 If the Company shall fix a record date for the making of a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividenddividend payable in stock other than Preferred Stock) or subscription rights 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 (as defined in Section 11(d)) per share of Preferred Stock on such record date, less the fair market value (as determined reasonably and with good faith to the holders of Rights by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and conclusive for all purposes) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants distributable in respect of one share of Preferred Stock and the denominator of which shall be the current market price (as defined in Section 11(d)) per share of the Preferred Stock. 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 be in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to as provided in Section 11(a)(iii) hereof), the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 30 thirty (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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price current per share market price of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 thirty (30) Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current Market Pricecurrent 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 NYSE New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchNew
Appears in 2 contracts
Samples: Rights Agreement (Network Computing Devices Inc), Rights Agreement (Network Computing Devices Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Company Common Stock payable in shares (or fractional shares) of Preferred Company Common Stock, (B) subdivide the outstanding Preferred Company Common Stock, (C) combine the outstanding Preferred Company Common Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Company Common Stock (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) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Company Common Stock (or the number and kind of other capital stocksecurities, as the case may be), issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Company Common Stock (or such other capital stocksecurities, as the case may be), which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were opendate, he such holder would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In the event thatevent:
(A) any Person shall become an Acquiring Person, shallother than pursuant to any transaction which constitutes a Section 13 Event; or
(B) a majority of the Continuing Directors shall declare by resolution any Person to be an Adverse Person, upon a determination that such Person, alone or together with its Affiliates and Associates, has, at any time after this Agreement has been filed with the Rights Dividend Declaration DateSecurities and Exchange Commission as an exhibit to a filing under the Exchange Act, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is Beneficial Owner of a transaction set forth in Section 13(a) hereof, or is an acquisition number of shares of Company Common Stock pursuant which the Continuing Directors determine to a tender offer or an exchange offer for all be substantial (which number of shares shall in no event represent less than 10% of the outstanding shares of Company Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevantStock) and (y) otherwise in a determination by the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the CompanyContinuing Directors, after reasonable inquiry and investigation, thenincluding consultation with such persons as such directors shall deem appropriate and consideration of such factors selected by such directors as are permitted by applicable law, promptly following that (a) such Beneficial Ownership by such Person is intended to cause the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have Company to repurchase the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock beneficially owned by such Person or to cause pressure on the Company to take action or enter into a transaction or series of transactions intended to provide such Person with short-term financial gain under circumstances where the Continuing Directors determine that the best long-term interests of the Company as shall equal the result obtained would not be served by taking such action or entering into such transaction or series of transactions at that time, or (xb) multiplying the then current Purchase Price by the then number such Beneficial Ownership is causing or reasonably likely to cause a material adverse impact (including, but not limited to, impairment of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members relationships with customers or impairment of the Company's Board of Directors who are not officers ability to maintain its competitive position) on the business or prospects of the Company determine that Company, on the following is not permitted by Company's employees, customers or suppliers or on the terms of any agreement or instrument to communities in which the Company operates or is a party on the date located; or
(C) any Acquiring Person (for purposes of this Agreement (orSection 11(a)(ii)(C) and of Section 11(a)(ii)(D), if the Board term "Acquiring Person" shall be deemed to include an Adverse Person) or any Associate or Affiliate of Directors so determinesany Acquiring Person, at any time after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles directly or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Priceindirectly, (1) cashshall merge 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 Company Common Stock shall remain outstanding and unchanged, (2) shall, in one transaction or a reduction series of transactions, transfer any assets to the Company or to any of its Subsidiaries in the Purchase Priceexchange (in whole or in part) for shares of Company Common Stock, (3) Common Stock or for other equity securities of the Company (including, without limitation, sharesor any such Subsidiary, or units for securities exercisable for or convertible into shares of shares, of preferred stock which the Board of Directors equity securities of the Company has deemed to have substantially the same value as shares or any of its Subsidiaries (whether Company Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4or otherwise) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of otherwise obtain from the Company based upon the advice or any of a nationally recognized investment banking firm selected by the Board of Directors of the Company; providedits Subsidiaries, howeverwith or without consideration, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient any additional shares of Common Stock could be authorized such equity securities or securities exercisable for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more or convertible into such equity securities (other than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a PRO RATA distribution to all holders of Preferred Stock Company Common Stock), (including any such distribution made 3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in connection one transaction or a series of transactions, to, from or with a consolidation or merger in which the Company is or any of its Subsidiaries or any employee benefit plan maintained by the continuing corporation) Company or any of evidences of indebtedness, cash (other than its Subsidiaries or any trustee or fiduciary with respect to such a regular quarterly cash dividend out of the earnings or retained earnings of the Company)plan acting in such capacity, assets (other including securities) on terms and conditions less favorable to the Company or such Subsidiary or plan than a dividend payable those that could have been obtained in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunderarm's-length negotiations with an unaffiliated third party, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that a transaction described in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchSection
Appears in 2 contracts
Samples: Rights Agreement (Bisys Group Inc), Rights Agreement (Bisys Group Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section SECTION 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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(aSECTION 11(A) and Section 7(eSECTION 7(E) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he such holder would have owned 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 this Section 11(a)(iSECTION 11(A)(I) and Section 11(a)(iiSECTION 11(A)(II) hereof, the adjustment provided for in this Section 11(a)(iSECTION 11(A)(I) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(iiSECTION 11(A)(II) hereof.
(ii) In the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or Person shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Eventsuch event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(eSECTION 7(E) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths one hundredths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths one hundredths of a share of Preferred Stock for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase PricePURCHASE PRICE" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to SECTION 11(D) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "ADJUSTMENT SHARES").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate Articles of incorporation Incorporation, but which are not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (iiII) of this Section 11(aSECTION 11(A), the Company shall: shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current ValueCURRENT VALUE") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each RightRight (subject to SECTION 7(E) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock stock, such as the Preferred Stock, which the Board of Directors of the Company has deemed to have substantially essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalentsCOMMON STOCK EQUIVALENTS")), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(aSECTION 23(A) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(iiSECTION 11(A)(II) Trigger DateTRIGGER DATE"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "SPREAD" shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such 30-day period, as it may be extended, is herein called the "Substitution PeriodSUBSTITUTION PERIOD"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need is to be (and may be) taken pursuant to the first and/or second third sentences of this Section 11(a)(iiiSECTION 11(A)(III), the Company (x1) shall provide, subject to Section 7(eSECTION 7(E) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y2) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any such shareholder approval for such authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect, in each case with simultaneous written notice to the Rights Agent. For purposes of this Section 11(a)(iiiSECTION 11(A)(III), the value of a share of Common Stock each Adjustment Share shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that equal the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such.
Appears in 2 contracts
Samples: Rights Agreement (Integrated Defense Technologies Inc), Rights Agreement (Integrated Defense Technologies Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the record holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to Section 24 hereof, in the event that:
(A) any Person, alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is (such an event being referred to herein as a transaction set forth in "Section 13(a11(a)(ii) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigationEvent"), then, promptly following the first occurrence of any such Section 11(a)(ii) Event, proper provision shall be made by the Company so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such first occurrence (such number of shares being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) Unless at least a majority Subject to such limitations existing as of the members of the Company's Board of Directors who date hereof as are not officers of the Company determine that the following is not permitted by the terms of necessary to prevent a default under any agreement or instrument to which the Company is a party on the date of this Agreement (orparty, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: Company, acting by resolution of its Board of Directors shall (A) determine the excess of (1x) the value of the Adjustment Shares issuable upon the exercise of a Right determined as set forth below (the "Current Value") ), over (2y) the Purchase Price (such excess being referred to herein as excess, the "Spread"), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, shares or units of shares, shares of preferred stock stock, such as the Preferred Stock, which the Board of Directors of the Company has deemed to have substantially essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock or other equity securities being referred to herein as "common stock equivalentsCommon Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyDirectors; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) such date being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase PricePrice (other than an amount equal to the par value of the shares of Common Stock to be issued), shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need is to be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y2) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any such stockholder approval for such authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue make a public announcement and shall give simultaneous written notice to the Rights Agent stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value Current Value of a share of Common Stock each Adjustment Share shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date Date, and the per share or per unit value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have equal the same value as Current Market Price per share of the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all record holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 forty-five (45) calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock and equivalent preferred stock outstanding on such record date, plus the number of shares of Preferred Stock and equivalent preferred stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock and equivalent preferred stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 CompanyDirectors, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock and equivalent preferred stock 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 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 a distribution to all record holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividenddividend payable in stock other than Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date, less the fair market value (as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred Stock and the denominator of which shall be such Current Market Price per share of Preferred Stock. 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 be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 30 thirty (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) hereof, the "Current Market Price" Price per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 ten (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, after the ex-dividend or ex-distribution date for such dividend or distribution, or the record date for such subdivision, combination or reclassificationreclassification shall not have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such case, the "Current Market Price" Price shall be properly adjusted to take into account ex-dividend tradingreflect the current market per share equivalent. 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 NYSE New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the NYSENew 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 shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, the last quoted price sale price, regular way, or, if such last sale price is not so quotedreported, 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 Automated Quotation System ("NASDAQ") NASDAQ or such other system then in use, or, if on any such date, date the shares of Common Stock are not quoted by any suchsuch organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board of Directors. If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such date as determined in good faith by the Board of Directors shall be used. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not publicly held or not 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, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
Appears in 2 contracts
Samples: Rights Agreement (Cerner Corp /Mo/), Rights Agreement (Gold Banc Corp Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Securities or Number of Rights. The Purchase Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In To preserve the event actual or potential economic value of the Company shall Rights, if at any time after the date of this Rights Agreement (A) declare a dividend on there shall be any change in the Common Stock or the Preferred Stock, whether by reason of stock dividends, stock splits, recapitalizations, mergers, consolidations, combinations or other similar changes in capitalization, any distribution or issuance of cash, assets, evidences of indebtedness or subscription rights, options or warrants to holders of Common Stock payable or Preferred Stock, as the case may be (other than distribution of the Rights or regular cash dividends) or otherwise, then, in each such event the Board shall make such appropriate adjustments in the number of shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-division, combination or reclassification, and the number and kind of shares other securities) issuable upon exercise of Preferred Stock or other capital stockeach Right, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then and Redemption Price in effect, effect at such time and the aggregate number and kind of shares Rights outstanding at such time (including the number of Preferred Stock Rights or other capital stock, as fractional Rights associated with each share of Common Stock) such that following such adjustment such event shall not have had the case may be, which, if such Right had been exercised immediately prior to such date and at a time when effect of reducing or limiting the Preferred Stock transfer books benefits the holders of the Company were open, he Rights would have owned upon had absent such exercise and been entitled to receive event. The adjustments provided for in this Section 11(a)(i) shall be made successively whenever such an adjustment is required by virtue of such dividend, subdivision, combination or reclassificationthis Section 11(a)(i). If an event occurs which would will require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 2 contracts
Samples: Rights Agreement (Veritas DGC Inc), Rights Agreement (Veritas DGC Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by shares, or fractions thereof, purchasable upon exercise of 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 Preferred Stock payable in shares of Preferred Stock, (B) subdivide or split the outstanding Preferred Stock, (C) combine or consolidate the outstanding Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Stock (or Class A Common Stock and/or other capital stocksecurities, as the case may be, ) issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date date, whether or not such Right was then exercisable, and at a time when the transfer books for the Preferred Stock transfer books (or other capital stock, as the case may be) of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination split, combination, consolidation or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event that:
(Aa "SECTION 11(a)(ii) EVENT") that any Person (other than an Exempt Person or a Grandfathered Person), alone or together with its Associates and Affiliates, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person also is a transaction set forth in Section 13(a) hereof13 Event, or is an acquisition then proper provision shall be made so that promptly after the date of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any an Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Class A Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, Event (whether or not such Right was then exercisable) and (y) dividing that product (which, which following such first occurrence, occurrence shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price per share of Class A Common Stock of the Company on the date of such first occurrence (such number of shares being referred to as the "ADJUSTMENT SHARES").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Class A Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company Company, acting by resolution of the Board, shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current ValueCURRENT VALUE") over (2) the Purchase Price attributable to each Right (such excess being referred to herein as the "SpreadSPREAD"), ) and (B) with respect to all or a portion of each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Class A Common Stock or other equity securities securities, if any, of the Company other than Class A Common Stock (including, including without limitation, limitation shares, or units of shares, of preferred stock Preferred Stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Class A Common Stock (such shares of preferred stock Preferred Stock being referred to herein as "common stock equivalentsCOMMON STOCK EQUIVALENTS")), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; providedPROVIDED, howeverHOWEVER, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) hereof expires (the later of (x) and (y) being referred to herein as the "Section SECTION 11(a)(ii) Trigger DateTRIGGER DATE"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Class A Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Class A Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, the 30 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such period, as it may be extended, being referred to herein as the "Substitution PeriodSUBSTITUTION PERIOD"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as suspended and a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Class A Common Stock of the Company shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Class A Common Stock on the Section 11(a)(ii) Trigger Date Date, and the value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have be equal to the same value as of the Class A Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 2 contracts
Samples: Shareholder Rights Agreement (Wyndham International Inc), Shareholder Rights Agreement (Wyndham International Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Common Stock payable in shares of Preferred Common Stock, (B) subdivide the outstanding Preferred shares of Common Stock, (C) combine the outstanding Preferred shares of Common Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification or recapitalization of the Preferred Common Stock (including any such reclassification or recapitalization 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 in Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, other securities and/or property which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In the event that:
(A) any Person, shall, that at any time after the Rights Dividend Declaration Datedate hereof, be or become an Acquiring any Person, unless the event causing such Person to have alone or together with its Affiliates and Associates, shall become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to then proper provision shall be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, made so that each holder of a Right (Right, except as provided below and in Section 7(e) hereof) , shall thereafter have the a right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths shares of a share of Preferred Common Stock for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) dividing that product 50% of the current market price for one share of Common Stock (which, following determined pursuant to Section 11(d)) on the date of the occurrence of the event set forth above in this subparagraph (ii) (such first occurrence, shall thereafter be number of shares being referred to as the "Purchase Price" for each Right number of Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and for all purposes of no adjustment shall be made pursuant to this AgreementSection 11(a)(ii).
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of there shall not be sufficient treasury shares or authorized but unissued shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) or, if any regulatory approvals for the issuance of such Common Stock has not been obtained by the Company, and the Rights become so exercisable, notwithstanding any other provision of this Section 11(a)Agreement, to the extent necessary and permitted by applicable law and any agreements in effect on the date hereof to which it is a party, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for upon exercise of such Right to the Adjustment Shares, upon payment of extent necessary and on a pro rata or such other basis as the applicable Purchase PriceCompany deems appropriate, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, including without limitation, shares, limitation shares or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")or other securities), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Valuecurrent per share market price (as determined pursuant to Section 11(d) hereof) of the Common Stock for which such Right is otherwise exercisable, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date is fixed by the Company or otherwise established for the issuance of rights, options or warrants to all holders of Preferred Common Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred to subscribe for or purchase Common Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock Common Stock) at a price per share of Preferred Common Stock or per share of equivalent preferred stock (or having a conversion price per shareshare of Common Stock, if a security convertible into Preferred Stock or equivalent preferred stockCommon Stock) less than the Current Market Price current market price (as determined pursuant to defined in Section 11(d) hereof)) per share of Preferred Common Stock 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, of which the numerator of which shall be the number of shares of Preferred Common Stock outstanding on such record date, date plus the number of shares of Preferred Common Stock which the aggregate offering price of the total number of shares of Preferred Common Stock and/or equivalent preferred stock 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, current market price and of which the denominator of which shall be the number of shares of Preferred Common Stock outstanding on such record date, date plus the number of additional shares of Preferred Common Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid by delivery of consideration in a con- sideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the RightsAgent. Shares of Preferred Common Stock 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, fixed or established; and in the event that such rights 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 fixedfixed or established.
(c) In case If the Company shall fix a record date for the making of a distribution to all holders of Preferred Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly periodic cash dividend out of the earnings or retained earnings of the Companydividend), assets (other than a dividend payable in Preferred Common Stock, but including any dividenddividend payable in stock other than Common Stock) or subscription rights 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 (as defined in Section 11(d)) per share of Common Stock on such record date, less the fair market value (as determined reasonably and with good faith to the holders of Rights by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants distributable in respect of one share of Common Stock and the denominator of which shall be the current market price per share of the Common Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would be in effect if such record date had not been fixed.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such the Common Stock of (Ai) a dividend or distribution on the Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (Bii) any subdivision, combination or reclassification of such the Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, as the case may be, then, and in each such case, the "Current Market Pricecurrent 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchappropriately adjusted
Appears in 2 contracts
Samples: Rights Agreement (Aar Corp), Rights Agreement (Aar Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares, or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Common Stock payable in shares of Preferred Common Stock, (B) subdivide the outstanding Preferred Common Stock, (C) combine the outstanding Preferred out- standing Common Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Common Stock (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) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination combination, or reclassification, and the number and kind of shares of Preferred Common Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right thereafter exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, purchase the aggregate number and kind of shares of Preferred Common Stock or other capital stock, as the case may be, whichthat, if such the Right had been exercised immediately prior to before such date and at a time when the Preferred Stock transfer books of the Company were opendate, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, or reclassification. If the record date for any such dividend, subdivision, combination, or reclassification shall occur before the Distribution Date, however, the Company shall appropriately adjust the Purchase Price (taking into account any additional Rights that may be issued as a result of such dividend, subdivision, combination, or reclassification), in lieu of adjusting (as described above) the number of shares of Common Stock (or other capital stock, as the case may be) issuable upon exercise of the Rights. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior tobefore, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) In the event that:
If (A) subject to Section 24, any Person (other than an Exempt Person), alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, be Date become the Beneficial Owner of 20% or become an Acquiring Personmore of the shares of Common Stock then outstanding, unless the event causing such Person the 20% threshold to have become an Acquiring Person be crossed is a transaction set forth described in Section 13(a) hereof), or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors and who are not officers representatives, nominees, Affiliates, or Associates of an Acquiring Person, Adverse Person, or the CompanyPerson making such tender or exchange offer, after receiving advice from one or more investment banking firms, to be (xa) at a price that is fair to stockholders shareholders (taking into account all factors which such members of that the Board of Directors deem relevantrelevant including, without limitation, prices that could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (yb) otherwise in the best interests of the Company and its stockholders, shareholders or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 2 contracts
Samples: Rights Agreement (Brown & Brown Inc), Rights Agreement (Brown & Brown Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares, or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred StockShares, (C) combine the outstanding Preferred Stock Shares into a smaller number of sharesPreferred Shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Shares (including any such reclassification in connection with a consolidation consolidation, merger, or merger statutory share exchange in which the Company is the continuing surviving or surviving acquiring corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination combination, or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock issuable on such datedate pursuant to the exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effecteffect (and any applicable transfer taxes), the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, whichstock that, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Shares transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, or reclassification. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In Subject to Section 24 of this Agreement, in the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have shall become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock (other than pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event13 Event occurring on or after the Distribution Date or within 15 days prior thereto), proper provision shall be made so that each holder of a Right (except as provided below and in Right, subject to Section 7(e) hereof) 11(a)(iii), shall thereafter have the a right to receive, upon exercise thereof at by payment of the amount equal to the product of the number of one one-hundredths of a Preferred Share that would otherwise be issuable upon exercise of a Right and the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred StockShares, such number of shares of Common Stock Shares of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock Share for which one a Right was is exercisable immediately prior to the first occurrence of a the Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority by 50% of the members then current per share market price of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument Common Shares (determined pursuant to which the Company is a party Section 11(d) on the date of this Agreement (or, if the Board of Directors so determines, such occurrence. From and after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event or a Section 13 Event, any Rights that are beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) or were beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) after the Acquiring Person became an Acquiring Person shall become null and (y) the date on which the Company's right void without any further action, and no holder of redemption such Rights shall thereafter have any rights to exercise such Rights or any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. No Right Certificate shall be issued pursuant to Section 23(a) expires (3 that represents Rights that would be void pursuant to the later preceding sentence; no Right Certificate shall be issued at any time upon the transfer of (x) any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate of such an Acquiring Person or to any nominee of such Acquiring Person, Associate, or Affiliate; and (y) being referred any Right Certificate delivered to herein as the "Rights Agent for transfer to an Acquiring Person or any Associate or Affiliate of such Acquiring Person whose Rights would be void pursuant to the preceding sentence shall be canceled. The Company shall use all reasonable efforts to insure that the provisions of this Section 11(a)(ii) Trigger are complied with, but shall have no liability to any holder of a Right Certificate or other Person as a result of its failure in good faith to make any determinations with respect to an Acquiring Person or its Affiliates or Associates.
(iii) If, on the date of the occurrence of a Section 11(a)(ii) Event (the "Adjustment Date"), the Company does not have sufficient authorized, unissued, and unreserved Common Shares available to permit the exercise in full of all Rights that are exercisable on the Adjustment Date for the number of Common Shares per Right provided for in Section 11(a)(ii), then the Exercise Price (as defined below) and the number of Common Shares to be delivered by the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be further adjusted as provided in this subparagraph (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iiiiii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 2 contracts
Samples: Rights Agreement (Rimage Corp), Rights Agreement (Delphax Technologies Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he such holder would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event that:
(A) any Person, Person shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Eventsuch event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "“Purchase Price" ” for each Right and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the “Adjustment Shares”).
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which are is authorized by the Company's articles or ’s certificate of incorporation incorporation, but not outstanding or reserved and authorized for issuance for purposes other than upon exercise of the Rights are Rights, is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "“Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"”), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock stock, such as the Preferred Stock, which the Board of Directors of the Company has deemed to have substantially essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents"“Common Stock Equivalents”)), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Purchase Price), where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term “Spread” shall mean the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, is herein called the "“Substitution Period"”); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need should be (and may be) taken pursuant to the first and/or second third sentences of this Section 11(a)(iii), the Company Company
(x1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y2) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any such stockholder approval for such authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. The Company shall notify the Rights Agent whenever it makes a public announcement pursuant to this Section 11(a) and give the Rights Agent a copy of such announcement. For purposes of this Section 11(a)(iii), the value of a share of Common Stock each Adjustment Share shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have equal the same value as Current Market Price per share of the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 forty-five (45) calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock"“Equivalent Preferred Stock”)) or securities convertible into Preferred Stock or equivalent preferred stock Equivalent Preferred Stock at a price per share of Preferred Stock or per share of equivalent preferred stock Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stockEquivalent Preferred Stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock 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 by delivery of consideration consideration, part or all of which may 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 CompanyBoard, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) ), of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividenddividend payable in stock other than Preferred Stock) or evidences of indebtedness, or of subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date, less the fair market value (as determined in good faith by the Board, whose determination shall be described in a written statement filed with the Rights Agent and shall be binding and conclusive for all purposes) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred Stock, and the denominator of which shall be such Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock. 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 be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "“Current Market Price" ” per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 30 thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" Price per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 ten (10) consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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, shall not have occurred prior to the commencement of the requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth above, then, and in each such case, the "Current Market Price" 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 NYSE Nasdaq Stock Market (“NASDAQ”) or, if the shares of Common Stock are not listed or admitted to trading on the NYSENASDAQ, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") NASDAQ or such other system then in use, or, if on any such date, date the shares of Common Stock are not quoted by any suchsuch organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board. If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such date shall be as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes. The term “Trading Day” shall mean a day on which the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, Current Market Price per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a written statement filed with the Rights Agent and shall be binding and conclusive for all purposes.
Appears in 2 contracts
Samples: Rights Agreement, Rights Agreement
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares or Number of RightsSection 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.. (a)
(i) In the event the Company Corporation shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred StockShares, (C) combine the outstanding Preferred Stock Shares into a smaller number of shares, Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Shares (including any such reclassification in connection with a consolidation or merger in which the Company Corporation is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Shares transfer books of the Company Corporation were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Corporation issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof.
). (ii) In the event that:
(A) any Person, shallalone or together with its Affiliates and Associates, at any time after the Rights Dividend Declaration Date, be or shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to then proper provision shall be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter shall, for a period of 60 days after the later of (i) the occurrence of any such event or (ii) the effective date of an appropriate registration statement under the Act pursuant to Section 9 hereof, have the a right to receive, upon exercise thereof at a price equal to the then current Purchase Price Price, in accordance with the terms of this Agreement, in lieu of a such number of Common Shares (or, in the discretion of the Board of Directors, one one-one- thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company Share) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock Share for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchand
Appears in 2 contracts
Samples: Rights Agreement (Family Bargain Corp), Rights Agreement (Family Bargain Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding shares of Preferred Stock, (C) combine the outstanding shares of Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were opendate, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In the event thatevent:
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, shall, at any time after the Rights Dividend Declaration Datedate hereof, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or become surviving corporation of such merger or combination and Company Common Stock shall remain outstanding and unchanged, (2) shall, in one transaction or a series of transactions, transfer any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part) for shares of Company Common Stock, for other equity securities of the Company or any such Subsidiary, or for securities exercisable for or convertible into shares of equity securities of the Company or any of its Subsidiaries (whether Company Common Stock or otherwise) or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of such equity securities or securities exercisable for or convertible into such equity securities (other than pursuant to a pro rata distribution to all holders of Company Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one transaction or a series of transactions, to, from or with the Company or any of its Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity, assets (including securities) on terms and conditions less favorable to the Company or such Subsidiary or plan than those that could have been obtained in arm's-length negotiations with an Acquiring Personunaffiliated third party, unless the event causing such Person other than pursuant to have become an Acquiring Person is a transaction set forth in Section 13(a), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one transaction or a series of transactions, to, from or with the Company or any of the Company's Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity (other than transactions, if any, consistent with those engaged in, as of the date hereof, by the Company and such Acquiring Person or is such Associate or Affiliate), assets (including securities) having an acquisition aggregate fair market value of shares of Common Stock more than $5 million, other than pursuant to a tender offer transaction set forth in Section 13(a), (5) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or an exchange offer otherwise acquire or dispose of, in one transaction or a series of transactions, to, from or with the Company or any of its Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity, any material trademark or material service xxxx, other than pursuant to a transaction set forth in Section 13(a), (6) shall receive, or any designee, agent or representative of such Acquiring Person or any Affiliate or Associate of such Acquiring Person shall receive, any compensation from the Company or any of its Subsidiaries other than compensation for all outstanding shares full-time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (7) shall receive the benefit, directly or indirectly (except proportionately as a holder of Company Common Stock at a price and on terms determined or as required by at least a majority law or governmental regulation), of the members of the Board of Directors who are not officers of the Companyany loans, after receiving advice from one advances, guarantees, pledges or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of other financial assistance or any tax credits or other tax advantage provided by the Company and or any of its stockholders, Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such plan acting in such capacity; or
(B) any Person shall become an Acquiring Person, other than pursuant to any transaction set forth in Section 13(a); or
(1C) at least a majority during such time as there is an Acquiring Person, there shall be any reclassification of the members of the Board of Directors who are not officers securities (including any reverse stock split), or recapitalization of the Company, after reasonable inquiry and investigationor any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) apply (whether or not with or into or otherwise involving an Acquiring Person), 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 of the Company or any of its Subsidiaries that is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person; then, promptly following immediately upon the first date of the occurrence of any an event described in Section 11(a)(ii)(A)-(C) (a "Section 11(a)(ii) Event"), proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a the number of one one-thousandths Units of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a share of Preferred StockSection 11(a)(ii) Event, such number of shares Units of Common Preferred Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share Units of Preferred Stock for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) EventEvent (such product thereafter being, for all purposes of this Agreement other than Section 13, the "Purchase Price"), and (y) dividing that product by 50% of the then current market price (which, following determined pursuant to Section 11(d) hereof) per Unit of Preferred Stock on the date of such first occurrence, shall thereafter be referred to as occurrence (such Units of Preferred Stock being the "Purchase Price" for each Right and for all purposes of this AgreementAdjustment Shares").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Preferred Stock which that are authorized by the Company's articles or certificate Certificate of incorporation Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company Company, by the vote of a majority of the Independent Directors, shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the such Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Company Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such other shares of being "preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors a majority of the Company based upon the Independent Directors, after receiving advice of from a nationally recognized investment banking firm selected by the Board of Directors of the Companyfirm; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii11(a)(iii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares Units of Common Preferred Stock (to the extent available) and then, if necessary, cash, which shares Units of Preferred Stock and/or cash shall have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences sentence of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof), that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share Unit of Common Preferred Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share Unit of the Common Preferred Stock on the Section 11(a)(ii11(a)(iii) Trigger Date and the value of any "common preferred stock equivalent" equivalent shall be deemed to have the same value as the Common Preferred Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) shares of Preferred Stock (or shares having substantially the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stockEquivalent Preferred Stock")) or securities convertible into Preferred Stock or equivalent preferred stock Equivalent Preferred Stock at a price per share of Preferred Stock or per share of equivalent preferred stock Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stockEquivalent Preferred Stock) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 sum of the number of shares of Preferred Stock outstanding on such record date, date plus the number of shares of Preferred Stock which that the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock 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 Pricecurrent market price, and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, date plus the number of additional shares of Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock 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 by delivery of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by the Board of Directors a majority of the CompanyIndependent Directors, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares , shares of Preferred Stock owned by or held for the account of the Company or any Subsidiary 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 or warrants are not so issued, 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 a distribution to all holders of shares of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in shares of Preferred Stock, but including any dividenddividend payable in stock other than Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock on such record date less the fair market value (as determined in good faith by a majority of the Independent Directors, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holder of the Rights) of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants distributable in respect of a share of Preferred Stock and the denominator of which shall be such current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock. 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 be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Company Common Stock or Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock shares for the 30 10 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in if prior to the event that the Current Market Price per share expiration of the Common Stock is determined during a such requisite ten Trading Day-period following the announcement by the issuer of such Common Stock of announces either (A) a dividend or distribution on Common Stock such shares payable in such shares of Common Stock or securities convertible into such shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stockshares, and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day periodthen, as set forth above, after following 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchas
Appears in 2 contracts
Samples: Rights Agreement (Gilbert Associates Inc/New), Rights Agreement (Gilbert Associates Inc/New)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Common Stock payable in shares of Preferred Common Stock, (B) subdivide the outstanding Preferred Common Stock, (C) combine the outstanding Preferred Common Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Common Stock (including without limitation 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 in section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-division, subdivision" combination or reclassification, and the number and kind of shares of Preferred Common Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Common Stock or other capital stock, as the case may be, which, if such Right had been exercised on the Business Day immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were opendate, he such holder would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, to any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) In the event that:
If (A) (1) any Person, shall, at any time after the Rights Dividend Declaration Date, be or Person shall become an Acquiring Person, unless the event causing such or (2) any Person to have shall become an Acquiring Adverse Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority the right of redemption is not reinstated pursuant to Section 23(a)(ii), then promptly after the members Close of Business on the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly twentieth day following the first occurrence of any an event under Section 11(a)(ii11(a)(ii)(A)(1) Eventor Section 11(a)(ii)(A)(2), proper provision shall be made so that each holder of a Right (Right, except as provided below and in Section 7(e) hereof) ), shall thereafter have the a right to receive, upon exercise thereof at one-half of the then current Purchase Price for one full share in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (xy) multiplying the then current Purchase Price for one full share by the then number of one one-thousandths shares of a share of Preferred Common Stock for which one a Right was exercisable immediately prior to the such first occurrence of a Section 11(a)(ii) Eventoccurrence, and (yz) dividing that product by fifty percent (which, following 50%) of the current market price (determined pursuant to Section 11(d)) per one full share of Common Stock on the date of such first occurrence, shall thereafter be occurrence (such number of shares being referred to as the "Purchase Price" for each Right and for all purposes of this AgreementAdjustment Shares").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of all of the exercisable Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a11(a)(ii), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) one-half of the Purchase Price for a full share (such excess being referred to herein as excess, the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment the exercise of the applicable Purchase Pricesuch Right, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, including without limitation, limitation shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares or units of preferred stock being referred to shares of Preferred Stock are herein as called "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; providedPROVIDED, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) first date upon which the Rights become exercisable after the first occurrence of a Section 11(a)(ii) Flip-In Event and (y) the such first date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being sometimes referred to herein as the "Section 11(a)(ii11(a)(iii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii11(a)(iii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need needs be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (xy) shall provide, subject to Section 7(e) hereof), that such action shall apply uniformly to all outstanding Rights, and (yz) may suspend the exercisability of the Rights until the expiration of the Substitution 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 sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. Notwithstanding anything to the contrary in the foregoing provisions of this Section 11(a)(iii), the Company may, at its option, elect, by Board action taken within thirty (30) days following the first date upon which the Rights become exercisable after the first occurrence of a Flip-In Event, to exchange each of the Rights outstanding at the Close of Business on the date of such Board action (but not any Rights which become void pursuant to Section 7(e)) for shares of Common Stock having a value equal to the excess of the value of the Adjustment Shares over one-half of the Purchase Price for a full share (the "Excess"). The aforesaid Board action must relate to all of the Rights outstanding at such time (other than the aforesaid void Rights). Immediately following the Close of Business on the date of the aforesaid Board action, and without any further action and without any notice, the right to exercise the Rights will terminate and each Right will thereafter represent only the right to receive shares of Common Stock having a value equal to the Excess. Promptly after the aforesaid Board action, the Company shall give notice thereof (specifying the steps to be taken to receive the shares of Common Stock in exchange for Rights) to the Rights Agent and the holders of the then outstanding Rights by mailing such notice in accordance with Section 25. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof)) per share of the Common Stock on the Section 11(a)(ii) Trigger Date first date upon which the Rights become exercisable after the first occurrence of a Flip-In Event, and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Common Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred to subscribe for or purchase Common Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock Common Stock) at a price per share of Preferred Common Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stockCommon Stock) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof)) per share of Preferred Common Stock 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 shares of Preferred Common Stock outstanding on such record date, date plus the number of shares of Preferred Common Stock which the aggregate offering price of the total number of shares of Preferred Common Stock and/or equivalent preferred stock 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, current market price and the denominator of which shall be the number of shares of Preferred Common Stock outstanding on such record date, plus the number of additional shares of Preferred Common Stock and/or equivalent preferred stock 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 by delivery of in a consideration part or all of which may 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 CompanyBoard, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Common Stock 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 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 Preferred Common Stock (including without limitation any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Common Stock, but including without limitation any dividenddividend payable in stock other than Common Stock) or subscription rights 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 (as determined pursuant to Section 11(d)) per share of Common Stock on such record date, less the fair market value (as determined in good faith by the Board whose determination shall be described in a statement filed with the Rights Agent) of the portion of the evidences of indebtedness, cash, assets or securities to be distributed in respect of one share of Common Stock and the denominator of which shall be such current market price (as determined pursuant to Section 11(d)) per share of Common Stock. 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.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 30 thirty (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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; providedPROVIDED, however, that in the event that the Current Market Price current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend exdividend 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 Pricecurrent 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 NYSE New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the NYSENew 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 shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Dealers, Inc. Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, date the shares of Common Stock are not quoted by any suchsuch organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board. If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such date as determined in good faith by the Board shall be used. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading is open for the transaction of business or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Stock is not publicly held or not so listed or traded, "current market price" per share shall mean the fair value per share as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Notwithstanding anything to the contrary in this Section 11(d), for purposes of the computations made pursuant to Section 11(a)(iii), the "current market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the ten (10) consecutive Trading Days immediately following such date.
Appears in 2 contracts
Samples: Stockholder Rights Agreement (Nash Finch Co), Stockholder Rights Agreement (Nash Finch Co)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Common Stock payable in shares of Preferred Common Stock, (B) subdivide the outstanding Preferred shares of Common Stock, (C) combine the outstanding Preferred shares of Common Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification or recapitalization of the Preferred Common Stock (including any such reclassification or recapitalization 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 in Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, other securities and/or property which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In the event that:
(A) any Person, shall, that at any time after the Rights Dividend Declaration Datedate hereof, be or become an Acquiring any Person, unless the event causing such Person to have alone or together with its Affiliates and Associates, shall become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to then proper provision shall be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, made so that each holder of a Right (Right, except as provided below and in Section 7(e) hereof) , shall thereafter have the a right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths shares of a share of Preferred Common Stock for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) dividing that product 50% of the current market price for one share of Common Stock (which, following determined pursuant to Section 11(d)) on the date of the occurrence of the event set forth above in this subparagraph (ii) (such first occurrence, shall thereafter be number of shares being referred to as the "Purchase Price" for each Right number of Adjustment Shares"); PROVIDED, HOWEVER, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and for all purposes of no adjustment shall be made pursuant to this AgreementSection 11(a)(ii).
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of there shall not be sufficient treasury shares or authorized but unissued shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) or, if any regulatory approvals for the issuance of such Common Stock has not been obtained by the Company, and the Rights become so exercisable, notwithstanding any other provision of this Section 11(a)Agreement, to the extent necessary and permitted by applicable law and any agreements in effect on the date hereof to which it is a party, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for upon exercise of such Right to the Adjustment Shares, upon payment of extent necessary and on a pro rata or such other basis as the applicable Purchase PriceCompany deems appropriate, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, including without limitation, shares, limitation shares or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")or other securities), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value"current per share market price" (as determined pursuant to Section 11(d) hereof) of the Common Stock for which such Right is otherwise exercisable, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized an investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date is fixed by the Company or otherwise established for the issuance of rights, options or warrants to all holders of Preferred Common Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred to subscribe for or purchase Common Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock Common Stock) at a price per share of Preferred Common Stock or per share of equivalent preferred stock (or having a conversion price per shareshare of Common Stock, if a security convertible into Preferred Stock or equivalent preferred stockCommon Stock) less than the Current Market Price current market price (as determined pursuant to defined in Section 11(d) hereof)) per share of Preferred Common Stock 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, of which the numerator of which shall be the number of shares of Preferred Common Stock outstanding on such record date, date plus the number of shares of Preferred Common Stock which the aggregate offering price of the total number of shares of Preferred Common Stock and/or equivalent preferred stock 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, current market price and of which the denominator of which shall be the number of shares of Preferred Common Stock outstanding on such record date, date plus the number of additional shares of Preferred Common Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid by delivery of in a consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the RightsAgent. Shares of Preferred Common Stock 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, fixed or established; and in the event that such rights 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 fixedfixed or established.
(c) In case If the Company shall fix a record date for the making of a distribution to all holders of Preferred Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly periodic cash dividend out of the earnings or retained earnings of the Companydividend), assets (other than a dividend payable in Preferred Common Stock, but including any dividenddividend payable in stock other than Common Stock) or subscription rights 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 (as defined in Section 11(d)) per share of Common Stock on such record date, less the fair market value (as determined reasonably and with good faith to the holders of Rights by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants distributable in respect of one share of Common Stock and the denominator of which shall be the current market price per share of the Common Stock; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would be in effect if such record date had not been fixed.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, howeverHOWEVER, that in the event that the Current Market Price current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such the Common Stock of (Ai) a dividend or distribution on the Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (Bii) any subdivision, combination or reclassification of such the Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such51
Appears in 1 contract
Samples: Rights Agreement (Illini Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Securities or Number of Rights. The Purchase Price, the number and kind of shares securities 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 To preserve the event actual or potential economic value of the Company shall Rights, if at any time after the date of this Rights Agreement (A) declare a dividend on there shall be any change in the Common Stock or the Preferred Stock, whether by reason of stock dividends, stock splits, recapitalizations, mergers, consolidations, combinations or exchanges of securities, split-ups, split-offs, spin-offs, liquidations, other similar changes in capitalization, any distribution or issuance of cash, assets, evidences of indebtedness or subscription rights, options or warrants to holders of Common Stock payable or Preferred Stock, as the case may be (other than distribution of the Rights or regular cash dividends) or otherwise, then, in each such event the Board shall make such appropriate adjustments in the number of shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-division, combination or reclassification, and the number and kind of shares other securities) issuable upon exercise of Preferred Stock or other capital stockeach Right, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then and Redemption Price in effect, effect at such time and the aggregate number and kind of shares Rights outstanding at such time (including the number of Preferred Stock Rights or other capital stock, as fractional Rights associated with each share of Common Stock) such that following such adjustment such event shall not have had the case may be, which, if such Right had been exercised immediately prior to such date and at a time when effect of reducing or limiting the Preferred Stock transfer books benefits the holders of the Company were open, he Rights would have owned upon had absent such exercise and been entitled to receive event. The adjustments provided for in this Section 11(a)(i) shall be made successively whenever such an adjustment is required by virtue of such dividend, subdivision, combination or reclassificationthis Section 11(a)(i). If an event occurs which would will require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Samples: Rights Agreement (Digicon Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other the number and kind of shares of capital stockstock issuable on such date, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the aggregate adjusted Purchase Price then in effecteffect necessary to exercise a Right in full, the aggregate number and kind of shares of Preferred Stock or other the number and kind of shares of capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to Sections 23 and 24 of this Agreement, in the event that:
that any Person (A) other than the Company, any PersonSubsidiary of the Company, any employee benefit plan of the Company or of any Subsidiary of the Company, or any Person 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, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to proper provision shall be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, made so that promptly following the first occurrence of any Redemption Period (as defined in Section 11(a)(ii) Event23(a)), each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at and payment of an amount equal to the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-one thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-one thousandths of a share of Preferred Stock for which one a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, whether or not such Right was then exercisable, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 hereof) by 50% of the current market price per share of Common Stock (determined pursuant to Section 11(d) hereof) on the date of such first occurrence (such number of shares, the "Adjustment Shares").
(iii) Unless The Company may at least its option substitute for a majority share of Common Stock issuable upon the members exercise of Rights in accordance with the Company's Board foregoing subparagraph (ii) such number or fractions of Directors who are not officers shares of Preferred Stock having an aggregate market value equal to the Company determine that the following is not permitted by the terms current per share market price of any agreement or instrument to which the Company is a party on the date share of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in Common Stock. In the event that the number of shares of Common Stock which are is authorized by the Company's articles or certificate Restated Certificate of incorporation Incorporation, as amended, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights are Rights, is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Board shall, to the extent permitted by applicable law and by any agreements or instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as excess, the "Spread"), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Preferred Stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock Stock) (such shares of preferred stock equity securities being referred to herein as called "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized an investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(ato
(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If If, upon the occurrence of a Section 11(a)(ii) Event, the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, then if the 30 Board so elects, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need is to be (and may be) taken pursuant to the first and/or second sentences preceding provisions of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such the first sentence of this Section 11(a)(iii) and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date. The Board may, but shall not be required to, establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of "equivalent preferred stock stock" (or having a conversion price per shareshare of Preferred Stock, if a security convertible into Preferred Stock or equivalent preferred stockStock) less than the Current Market Price current per share market price of the Preferred Stock (as determined pursuant to defined in Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 Pricecurrent market price, and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of in a consideration part or all of which may 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 CompanyBoard, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rightsconclusive for all purposes. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividenddividend payable in stock other than Preferred Stock), or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the current per share market price of the Preferred Stock (as defined in Section 11(d) hereof) on such record date, less the fair market value (as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred Stock and the denominator of which shall be such current per share market price of the Preferred Stock. Such adjustment 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.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of the Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share current market price of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (Ai) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (Bii) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 thirty (30) 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 Pricecurrent market price" shall be properly appropriately 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 NYSE New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the NYSENew 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 shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") NASDAQ or such other system then in use, or, if on any such date, date the shares of Common Stock are not quoted by any suchsuch organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the shares of Common Stock selected by the Board.
Appears in 1 contract
Samples: Rights Agreement (Informax Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide subdivides the outstanding Preferred StockShares into a greater number of such shares, (C) combine combines the outstanding Preferred Stock Shares into a smaller number of sharesPreferred Shares, or (D) issue issues any shares of its capital stock in a reclassification of the Preferred Stock Shares (including any such reclassification in connection with a consolidation consolidation, merger or merger statutory share exchange in which the Company is the continuing continuing, surviving or surviving acquiring corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of at the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock issuable on such date, shall date will be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effecteffect (and any applicable transfer taxes), the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were opendate, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; PROVIDED, HOWEVER, that in no event will the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this Section Sections 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In the event that:
Subject to paragraph (Aiii) of this Section 11(a) and Sections 22 and 23 of this Agreement, if any Person, shall, at any time after the Rights Dividend Declaration Date, be or Person shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, then promptly following the first occurrence of any Section 11(a)(ii) Event, thereafter each holder of a Right (Right, except as otherwise provided below in this Section 11(a)(ii) and in Section 7(e11(a)(iii), shall, for a period of sixty (60) days after the later of the occurrence of any such event or the effective date of an appropriate registration statement under the Securities Act pursuant to Section 9 hereof) shall thereafter , have the a right to receivereceive for each Right, on or after the Distribution Date and upon exercise thereof pursuant to Section 7, at a price equal to the then current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement, in the discretion of the Board of Directors and in lieu of a number of one one-thousandths of a share of Preferred StockShares, such number of shares of Common Stock Shares of the Company as shall equal the result obtained by (xA) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock Share for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product by (which, following B) fifty percent (50%) of the then Current Per Share Market Price of the Common Shares (determined pursuant to Section 11(d)) on the date such first occurrence, shall thereafter be Person became an Acquiring Person (such number of shares being referred to as the "Purchase Price" for each Right Adjustment Shares"); PROVIDED, HOWEVER, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13, then only the provisions of Section 13 shall apply and for all purposes of no adjustment will be made pursuant to this AgreementSection 11(a)(ii).
(iii) Unless at least a majority of From and after the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms occurrence of any agreement Person becoming an Acquiring Person, any Rights which are, were or instrument may be acquired or beneficially owned by any Acquiring Person (or any Affiliate or Associate of any Acquiring Person) shall be null and void without any further action and no holder of such Rights will thereafter any rights whatsoever with respect to which the Company is a party on the date such Rights, whether under any provisions of this Agreement (oror otherwise. No Right Certificate shall be issued pursuant to Section 3 or 6 that represents Rights that are or would be null and void pursuant to the preceding sentence; no Right Certificate will be issued at any time upon the transfer of any Rights to an Acquiring Person, if to any Associate or Affiliate or any such Acquiring Person, or to any nominee of any such Acquiring Person or Associate or Affiliate thereof; and any Right Certificate delivered to the Board Rights Agent which represents Rights that are or would have become null and void pursuant to the provisions of Directors so determines, after the date preceding sentence will be canceled. The Company shall use all reasonable efforts to ensure that the provisions of this Agreement)Section 11(a)(iii) are complied with, then in the event that 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. This paragraph shall apply both to an initial Acquiring Person and its Affiliates and Associates, and to any subsequent Acquiring Persons and their Affiliates and Associates.
(iv) If the number of shares of Common Stock Shares which are authorized by the Company's articles or certificate Certificate of incorporation but Incorporation and not outstanding or subscribed for, or reserved or otherwise committed for issuance for purposes other than upon exercise of the Rights are Rights, is not sufficient to permit the holder of each Right to purchase the number of Common Shares to which such holder would be entitled upon the exercise in full of the Rights in accordance with the foregoing subparagraph (iiprovisions of Section 11(a)(ii) of this Section 11(a)hereof, or if any necessary regulatory approval for such issuance has not been obtained by the Company, the Company shall, except to the extent that the Company has not obtained any necessary stockholder or regulatory approval for such transactions: (A) determine subtract the excess of (1) Purchase Price from the value of the Adjustment Common Shares issuable upon the exercise of a Right pursuant to Section 11(a)(ii) hereof (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as difference, the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment such Common Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed determined to have substantially the same value as shares of common stock (such equity securities, "Common Stock (such shares of preferred stock being referred to herein as "common stock equivalentsEquivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause in good faith.
(Bv) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could Shares should be authorized for issuance upon exercise in full of the Rights, the 30 day within a period set forth above may be extended to the extent necessaryof ninety (90) days following such determination, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the The Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e7(f) hereof, that such action the form of distribution to be made in accordance with subparagraph (iv) above shall apply uniformly to all outstanding Rights, and (y) and, in addition, the Company may suspend the exercisability of the Rights Rights, until the expiration of the Substitution Period in order to seek any authorization of additional shares shares, to enable it to take any action deemed necessary to obtain any required regulatory approval and/or to decide determine the appropriate form of distribution to be made pursuant to such first sentence and to determine upon exercise of the value thereofRights. In the event of any such suspension, the Company shall issue make a public announcement announcement, and shall deliver to the Rights Agent, a statement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at . At such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of Company shall make another public announcement, and deliver to the Rights Agent a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such datestatement so stating.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock Shares (or shares having the same rights, privileges and preferences as the shares of Preferred Stock Shares ("equivalent preferred stockshares")) or securities convertible into Preferred Stock Shares or equivalent preferred stock shares at a price per share of Preferred Stock Share or per share of equivalent preferred stock share (or having a conversion price per share, if a security convertible into Preferred Stock Shares or equivalent preferred stockshares) less than the Current Market Price then current per share market price of the Preferred Shares (as determined pursuant to defined in Section 11(d)) hereof) per share of Preferred Stock 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 shares of Preferred Stock Shares outstanding on such record date, date plus the number of shares of Preferred Stock Shares which the aggregate offering price of the total number of shares of Preferred Stock Shares and/or equivalent preferred stock 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 Pricecurrent market price, and the denominator of which shall be the number of shares of Preferred Stock Shares outstanding on such record date, date plus the number of additional shares of Preferred Stock Shares and/or equivalent preferred stock shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid by delivery of in a consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the RightsAgent. Preferred Shares of Preferred Stock 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 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 the Preferred Stock Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash indebtedness or assets (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred StockShares) or subscription rights or warrants (excluding those referred to in Section ll(b) hereof), but including any dividendthe 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 then current per share market price of the Preferred Shares on such record date, less the fair market value (as determined in good faith by the Board of Directors of the 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 or of such subscription rights or warrants applicable to one Preferred Share, and the denominator of which shall be such current per share market price of the Preferred Shares; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(i) For Except as otherwise provided herein, for the purpose purposes of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Per Share Market Price" per share of Common Stock any security (a "Security" for the purpose of this Section 11(d)) on any date shall be deemed to will be the average of the daily closing prices per share of such Common Stock Security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, and for purposes of computations made pursuant to Section 11(a)(iii) hereofHOWEVER, that if the "Current Per Share Market Price" per share of Common Stock on any date shall be deemed to be the average Price of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock Security is determined during a period following the announcement by the issuer of such Common Stock Security of (A) a dividend or distribution on Common Stock such Security payable in shares of Common Stock such Security or securities convertible into shares of Common Stock (other than the Rights)such shares, or (B) any subdivision, combination or reclassification of such Common StockSecurity, and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current Per Share Market Price" Price shall be properly appropriately adjusted to take into account ex-dividend tradingreflect the Current Per Share Market Price of the equivalent of such Security. The closing price for each day shall will 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 NYSE Nasdaq National Market or the Nasdaq SmallCap Market or, if the shares of Common Stock are Security is not listed or admitted to trading on the NYSENasdaq National Market or the Nasdaq SmallCap Market, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are Security is listed or admitted to trading or, if the shares of Common Stock are Security is not listed or admitted to trading on any national securities exchange, the last quoted sales 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 Automated Quotation System ("NASDAQ") Nasdaq or such other system then in use, use or, if on any such date, date the shares of Common Stock are Security is not quoted by any suchsuch organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company. If the Security is not publicly held or so listed or traded, and no market maker is making, or has made during the relevant period, a market in the Security, Current Per Share Market Price will be the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination shall be conclusive for all purposes hereof and shall be described in a statement filed with the Rights Agent and will be binding on the Rights Agent.
(ii) For the purpose of any computation hereunder, the "Current Per Share Market Price" of the Preferred Shares shall be determined in accordance with the method set forth in Section ll(d)(i). If the Preferred Shares are not publicly traded, the "Current Per Share Market Price" of the Preferred Shares shall be conclusively deemed to be the current per share market price of the Common Shares as determined pursuant to Section ll(d)(i) (appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring after the date hereof), multiplied by one hundred. If neither the Common Shares nor the Preferred Shares are publicly held or so listed or traded, "Current Per Share Market Price" shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination shall be conclusive for all purposes hereof and shall be described in a statement filed with the Rights Agent.
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR SHARES, AND NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof), the Purchase Price in effect at the time of the record date Record Date for such dividend or of the effective date of such sub-divisionsubdivision, combination combination, or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right thereafter exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, purchase the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, whichthat, if such the Right had been exercised immediately prior to before such date and at a time when the Preferred Stock transfer books of the Company were opendate, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, or reclassification. If the Record Date for any such dividend, subdivision, combination, or reclassification shall occur before the Distribution Date, however, the Company shall appropriately adjust the Purchase Price (taking into account any additional Rights that may be issued as a result of such dividend, subdivision, combination, or reclassification), in lieu of adjusting (as described above) the number of shares of Preferred Stock (or other capital stock, as the case may be) issuable upon exercise of the Rights. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior tobefore, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) In the event that:
Subject to Section 24, if any Person (A) any other than an Exempt Person), alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have Date become an Acquiring Person is (a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any "Section 11(a)(ii) Event"), then immediately upon the occurrence thereof, each holder of a Right (except as provided below and in Section 7(e) hereofand 11(a)(iii)) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price (but in no event less than the par value per share) multiplied by the number of one-hundredths of a share of Preferred Stock for which a Right is then exercisable, in accordance with the terms of this Agreement, Agreement and in lieu of a number of one one-thousandths of a share shares of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock for which one a Right was exercisable immediately prior to (or, if the first occurrence Distribution Date shall not have occurred before the date of a such Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" number of one-hundredths of a share of Preferred Stock for each which a Right and for all purposes of this Agreement)
(iii) Unless at least a majority of would have been exercisable if the members of Distribution Date had occurred on the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on Business Day immediately preceding the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (iisuch Section 11(a)(ii) of this Section 11(a), the Company shall: (AEvent) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (immediately before such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares or other property covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement Record Date but prior to the Distribution Date (A) declare a dividend on the Preferred Stock Common Shares payable in shares of Preferred StockCommon Shares, (B) subdivide the outstanding Preferred StockCommon Shares, (C) combine the outstanding Preferred Stock Common Shares (by reverse stock split or otherwise) into a smaller number of sharesCommon Shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, in each such event, except as otherwise provided in this Section 11(a) and Section 7(e) hereof: (1) each of the Rights outstanding at the time of the record date for such dividend or the effective date of such subdivision, combination or reclassification shall be proportionately adjusted to that number of Rights (calculated to the nearest one ten-thousandth (1/10,000) of a Right) equal to a fraction (the “EXCHANGE RATIO”), the numerator of which shall be the total number of Common Shares or shares of capital stock issued in such reclassification of the Common Shares outstanding immediately following such time and the denominator of which shall be the total number of Common Shares outstanding immediately prior to such time, and the number of Rights that shall thereafter be issued with respect to each Common Share or share of such other capital stock that shall become outstanding thereafter prior to the Distribution Date shall be equal to the total number of outstanding Rights immediately after such event (as adjusted pursuant to this clause (1)) divided by the total number of outstanding Common Shares or shares of such other capital stock immediately after such event (subject to further adjustment pursuant to the provisions of this Agreement); (2) the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification shall be adjusted so that the Purchase Price thereafter shall equal the result obtained by dividing the Purchase Price in effect immediately prior to such time by the Exchange Ratio; provided, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of such Right; and (3) the number of Preferred Shares or shares of such other capital stock issuable upon the exercise of each Right shall remain unchanged immediately after such event, but, in the event of a reclassification, and the number and kind of shares issuable upon the exercise of each Right immediately after such reclassification shall be adjusted to be the kind of shares of Preferred Stock or such other capital stockstock issued in such reclassification, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of rather than Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassificationShares. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to Section 24 hereof, in the event that:
(A) any Persona Triggering Event shall have occurred, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, then promptly following the first occurrence of any Section 11(a)(ii) such Triggering Event, proper provision shall be made so that each holder of a Right (Right, except as provided below and in Section 7(e) hereof) , shall thereafter have the right to receivereceive for each Right, upon exercise thereof at the then current Purchase Price in accordance with the terms of this AgreementAgreement and payment of the then-current Total Exercise Price, in lieu of a number of one one-thousandths hundredths of a share of Preferred StockShare, such number of shares of Common Stock Shares of the Company as shall equal the result obtained by (x) multiplying the then then-current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock Share for which one a Right was exercisable (or would have been exercisable if the Distribution Date had occurred) immediately prior to the first occurrence of a Section 11(a)(ii) Triggering Event, and (y) dividing that product by 50% of the Current Per Share Market Price (which, following as defined and determined pursuant to Section 11(d) hereof) for Common Shares on the date of occurrence of the Triggering Event (such first occurrence, shall thereafter be number of shares being hereinafter referred to as the "Purchase Price" for each Right and for all purposes of this Agreement“ADJUSTMENT SHARES”).
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers The right to buy Common Shares of the Company determine that the following is pursuant to Section 11(a)(ii) hereof shall not permitted by the terms arise as a result of any agreement or instrument Person becoming an Acquiring Person through an acquisition of Common Shares pursuant to which a Permitted Offer.
(iv) In lieu of issuing Common Shares in accordance with Section 11(a)(ii) hereof, the Company is a party on the date of this Agreement (ormay, if the Board of Directors so determinesdetermines that such action is necessary or appropriate and not contrary to the interest of holders of Rights (and, after the date of this Agreement), then in the event that the number of shares of Common Stock Shares which are authorized by the Company's articles or certificate ’s Certificate of incorporation Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with Rights, or if any necessary regulatory approval for such issuance has not been obtained by the foregoing subparagraph (ii) of this Section 11(a)Company, the Company shall: ): (A) determine the excess of (1) the value of the Adjustment Common Shares issuable upon the exercise of a Right (the "Current Value"“CURRENT VALUE”) over (2) the Purchase Price (such excess being referred to herein as excess, the "Spread"), “SPREAD”) and (B) with respect to each Right, make adequate provision to substitute for the Adjustment such Common Shares, upon payment exercise of the applicable Purchase PriceRights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, shares or units of shares, shares of preferred stock any series of Preferred Stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock Shares (such shares or units of preferred stock being referred to shares of Preferred Stock are herein as "common stock equivalents"called “COMMON STOCK EQUIVALENTS”)), except to the extent that the Company has not obtained any necessary stockholder or regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary stockholder or regulatory approval for such issuance, (5) other assets, assets or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Triggering Event and (y) the date on which the Company's ’s right of redemption pursuant to Section 23(a) hereof expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii“SECTION 11(A)(ii) Trigger Date"TRIGGER DATE”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock Shares (to the extent available) ), except to the extent that the Company has not obtained any necessary stockholder or regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock Shares could be authorized for issuance upon exercise in full of the RightsRights or that any necessary regulatory approval for such issuance will be obtained, the 30 thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"“SUBSTITUTION PERIOD”); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii11(a)(iv), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchand
Appears in 1 contract
Samples: Preferred Shares Rights Agreement (Entertainment Distribution Co Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OF COMMON STOCK OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares of Common Stock or other securities covered by each Right Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement Record Date (A) declare a dividend on the Preferred Common Stock payable in shares of Preferred Common Stock, (B) subdivide the outstanding Preferred Stockshares of Common Stock into a greater number of such shares, (C) combine the outstanding Preferred shares of Common Stock into a smaller number of such shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Common Stock (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) hereof), the Purchase Price in effect for Rights at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination combination, or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receiveshall, upon payment of the Purchase Price then in effect, be entitled to receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Common Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividenddividends, subdivision, combination combination, or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one such Right be less than the per share par value of the Common Stock. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In Subject to Section 24 of this Rights Agreement, in the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become Person becomes an Acquiring Person, unless then the event causing Purchase Price for each share of Common Stock issuable upon exercise of Rights shall be reduced to an amount equal to 33 1/3% of the current per share market price of such Common Stock (determined pursuant to Section 11(d)) on the Shares Acquisition Date). Notwithstanding the above, if the transaction that would otherwise give rise to the classification of a Person to have become as an Acquiring Person is a transaction set forth in also subject to the provisions of Section 13(a) 13 hereof, then only the provisions of Section 13 hereof shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). From and after the occurrence of a Person becoming an Acquiring Person, any Rights that are or is were acquired or beneficially owned by such Acquiring Person, or any subsequently deemed Acquiring Person (or any Associate or Affiliate of each such Acquiring Person) shall be void and any such Acquiring Person shall thereafter have no right to exercise such Rights under any provision of this Rights Agreement. No Right Certificate shall be issued pursuant to Section 3 that represents Rights beneficially owned by an acquisition Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof; no Right Certificate shall be issued at any time upon the transfer of any Rights to or from an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof or to or from any nominee of such Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to or from an Acquiring Person (or any Associate, Affiliate or nominee of such Acquiring Person) whose Rights would be void pursuant to the preceding sentence shall be canceled.
(iii) In the event that there shall not be sufficient shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation issued but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient authorized but unissued to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)subparagraph, the Company shall: (A) determine , to the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (extent permitted by applicable law, take all such excess being referred action as may be necessary to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as authorize additional shares of Common Stock for issuance upon exercise of the Rights, including the calling of a meeting of stockhholders; provided, however, if the Company is unable to cause the authorization of additional shares of Common Stock, then the Company, to the extent necessary and permitted by applicable law and any agreements or instruments in effect on the date hereof to which it is a party, shall, at its option (A) pay cash equal to twice the applicable Purchase Price (as adjusted pursuant to this Section 11) in lieu of issuing any such shares of preferred stock being referred to herein as "common stock equivalents"))Common Stock and requiring payment therefor, (4B) debt issue equity securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate a value equal to the Current Valuemarket price of the shares of Common Stock which otherwise would have been issuable pursuant to the foregoing subparagraph, where such aggregate which value has been shall be determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company whose determination shall be obligated to deliverdescribed in a statement filed with the Rights Agent, upon the surrender for exercise of or (C) distribute a Right and without requiring payment of the Purchase Price, shares combination of Common Stock (to the extent available) and then, if necessaryStock, cash, which shares and/or cash have an aggregate other equity securities having a value equal to the Spread. If the Board of Directors market price of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on which are otherwise issuable pursuant to the Section 11(a)(ii) Trigger Date and foregoing subparagraph (ii), determined in accordance with the value preceding clause (B), upon exercise of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such daterelated Rights.
(b) In case the Company shall fix a record date for the issuance of rightsrights (other than the Rights), options options, or warrants to all holders of Preferred Common Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (to subscribe for or shares having the same rights, privileges and preferences as the purchase shares of Preferred Stock ("equivalent preferred stock")) Common Stock, or securities convertible into Preferred shares of Common Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stockCommon Stock) less than the Current Market Price then current per share market price (as determined pursuant to defined in Section 11(d)) hereof) per share of Preferred the Common Stock 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 shares of Preferred Common Stock outstanding on such record date, date plus the number of shares of Preferred Common Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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, current per share market price and the denominator of which shall be the number of shares of Preferred Common Stock outstanding on such record date, date plus the number of additional shares of Preferred Common Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the per share par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid by delivery of in consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the RightsAgent. Shares of Preferred Common Stock owned by by, or held for the account of 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 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 Preferred shares of Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash indebtedness or assets (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company)dividend, assets (other than a dividend payable in Preferred shares of Common Stock or other distribution referred to in Section 11(a) hereof) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price 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 then current per share market price of the Common Stock 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 and shall be binding on the Rights Agent) of the portion of such assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one share of Common Stock and the denominator of which shall be such current per share market price of the Common Stock; provided, but including any dividendhowever, that in no event shall the consideration to be paid upon the exercise of one Right be less than the per share par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date if 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.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market PriceCURRENT PER SHARE MARKET PRICE" per of a share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price current per share market price of the a share of Common Stock is determined during a period following the announcement by the issuer of such Common Stock Company of (A) a dividend or distribution on to holders of the shares of Common Stock Stock, payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights)Stock, or (B) any subdivision, combination combination, or reclassification of such the Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-ex dividend date for such dividend or distribution, or the record date for such subdivision, combination combination, or reclassification, then, and in each such case, the "Current Market Price" current per share market price shall be properly appropriately adjusted to take into account ex-dividend tradingby the Board of Directors. 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 NYSE New York Stock Exchange or, if the shares of Common Stock are is not listed or admitted to trading on the NYSENew 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 shares of Common Stock are is listed or admitted to trading or, if the shares of Common Stock are is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers Automated Quotation System The Nasdaq Stock Market, Inc. ("NASDAQ") or such other system then in use, or, if on any such date, the shares of date Common Stock are not quoted by any suchis
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company Corporation shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which the Company Corporation is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company Corporation were open, he would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In Subject to Section 23(a) and Section 24, in the event that:
any Person (A) any other than an Exempt Person), alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, be become the Beneficial Owner of 15% or become an Acquiring Personmore of the shares of Common Stock then outstanding, unless the event causing such Person the 15% threshold to have become an Acquiring Person be crossed is a transaction set forth in Section 13(a) hereof), or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by the Board of Directors of the Corporation acting by Special Vote and by at least a majority of the members of the Board of Continuing Directors who are not officers of the CompanyCorporation, after receiving advice from one or more investment banking firms, to be (xa) at a price which is fair to stockholders of the Corporation (taking into account all factors which such members of the Board deem relevantrelevant including, without limitation, prices which could reasonably be achieved if the Corporation or its assets were sold on an orderly basis designed to realize maximum value) and (yb) otherwise in the best interests of the Company Corporation and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof)) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company Corporation as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Series D Preferred Stock payable in shares of Series D Preferred Stock, (B) subdivide the outstanding Series D Preferred Stock, (C) combine the outstanding Series D Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Series D Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Series D Preferred Stock or other the number and kind of shares of capital stockstock issuable on such date, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the aggregate adjusted Purchase Price then in effecteffect necessary to exercise a Right in full, the aggregate number and kind of shares of Series D Preferred Stock or other the number and kind of shares of capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Series D Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to Sections 23 and 24 of this Agreement, in the event that:
(A) that any Person, alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is (x) a transaction set forth in Section 13(a13 Event or (y) hereof, or is an acquisition of shares of Common Stock pursuant to a cash tender offer or an exchange offer made pursuant to Section 14(d) of the Exchange Act for all outstanding shares of Common Stock (other than shares of Common Stock beneficially owned by the Person making the offer or by its Affiliates or Associates) at a price and on terms determined by at least a majority two-thirds of the members of the Board of Directors who are not officers of the CompanyBoard, after receiving advice from one or more investment banking firms, to be (xa) fair to stockholders (taking into account all factors which such members of the Board deem relevantrelevant including, without limitation, prices which could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (yb) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority then promptly after the date of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any a Section 11(a)(ii) Event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at and payment of an amount equal to the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Series D Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Series D Preferred Stock for which one a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, whether or not such Right was then exercisable, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 thereof) by 50% of the current market price per share of Common Stock (determined pursuant to Section 11(d) hereof) on the date of such first occurrence (such number of shares, the "Adjustment Shares").
(iii) Unless The Company may at least its option substitute for a majority share of Common Stock issuable upon the members exercise of Rights in accordance with the Company's Board foregoing subparagraph (ii) such number or fractions of Directors who are not officers shares of Series D Preferred Stock having an aggregate market value equal to the Company determine that the following is not permitted by the terms current per share market price of any agreement or instrument to which the Company is a party on the date share of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in Common Stock. In the event that the number of shares of Common Stock which are is authorized by the Company's articles or certificate Articles of incorporation Incorporation, as amended from time to time, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights are Rights, is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Board shall, to the extent permitted by applicable law and to the extent permitted by any material agreements or material instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as excess, the "Spread"), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Series D Preferred Stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock Stock) (such shares of preferred stock equity securities being referred to herein as called "common stock equivalentsStock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized an investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If If, upon the occurrence of a Section 11(a)(ii) Event, the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, then if the 30 Board so elects, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need is to be (and may be) taken pursuant to the first and/or second sentences preceding provisions of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such the first sentence of this Section 11(a)(iii) and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" Stock Equivalent shall be deemed to have the same value as the Common Stock on such date. The Board may, but shall not be required to, establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Series D Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Series D Preferred Stock (or shares having the same preferences, conversion or other rights, privileges voting powers, restrictions, limitations as to dividends, qualifications, and preferences terms or conditions or redemption as the shares of Series D Preferred Stock ("equivalent preferred stockEquivalent Preferred Stock")) or securities convertible into Series D Preferred Stock or equivalent preferred stock at a price per share of Series D Preferred Stock or per share of equivalent preferred stock Equivalent Preferred Stock (or having a conversion price per shareshare of Series D Preferred Stock, if a security convertible into Series D Preferred Stock or equivalent preferred stockStock) less than the Current Market Price current per share market price of the Series D Preferred Stock (as determined pursuant to defined in Section 11(d)) hereof) per share of Preferred Stock 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 shares of Series D Preferred Stock outstanding on such record date, plus the number of shares of Series D Preferred Stock which the aggregate offering price of the total number of shares of Series D Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock 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 Pricecurrent market price, and the denominator of which shall be the number of shares of Series D Preferred Stock outstanding on such record date, plus the number of additional shares of Series D Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock 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 by delivery of in a consideration part or all of which may 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 CompanyBoard, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rightsconclusive for all purposes. Shares of Series D Preferred Stock 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 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 a distribution to all holders of Series D Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Series D Preferred Stock, but including any dividenddividend payable in stock other than Series D Preferred Stock), or subscription rights 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 per share market price of the Series D Preferred Stock (as defined in Section 11(d)) on such record date, less the fair market value (as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Series D Preferred Stock and the denominator of which shall be such current per share market price of the Series D Preferred Stock. Such adjustment 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.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of the Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 30 consecutive Trading Days (as such term is hereinafter defineddefined herein) immediately prior to but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 ten (10) consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share current market price of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (Ai) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (Bii) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 thirty (30) Trading Day or 10 ten (10) 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 Pricecurrent market price" shall be properly appropriately 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 NYSE New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the NYSENew 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 shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Dealers, Inc. Automated Quotation Quotations System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Samples: Rights Agreement (Smith Charles E Residential Realty Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Common Stock payable in shares of Preferred Common Stock, (B) subdivide the outstanding Preferred shares of Common Stock, (C) combine the outstanding Preferred shares of Common Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification or recapitalization of the Preferred Common Stock (including any such reclassification or recapitalization 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 in Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination combination, reclassification or reclassificationrecapitalization, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, other securities and/or property which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, reclassification or reclassificationrecapitalization; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In the event that:
(A) any Person, shall, that at any time after the Rights Dividend Declaration Datedate hereof, be or become an Acquiring any Person, unless the event causing such Person to have alone or together with its Affiliates and Associates, shall become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to then proper provision shall be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, made so that each holder of a Right (Right, except as provided below and in Section 7(e) hereof) , shall thereafter have the a right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths shares of a share of Preferred Common Stock for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) dividing that product 50% of the current market price for one share of Common Stock (which, following determined pursuant to Section 11(d)) on the date of the occurrence of the event set forth above in this subparagraph (ii) (such first occurrence, shall thereafter be number of shares being referred to as the "Purchase Price" for each Right number of Adjustment Shares"); PROVIDED, HOWEVER, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and for all purposes of no adjustment shall be made pursuant to this AgreementSection 11(a)(ii).
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of there shall not be sufficient treasury shares or authorized but unissued shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) or, if any regulatory approvals for the issuance of such Common Stock has not been obtained by the Company, and the Rights become so exercisable, notwithstanding any other provision of this Section 11(a)Agreement, to the extent necessary and permitted by applicable law and any agreements in effect on the date hereof to which it is a party, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for upon exercise of such Right to the Adjustment Shares, upon payment of extent necessary and on a pro rata or such other basis as the applicable Purchase PriceCompany deems appropriate, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, including without limitation, shares, limitation shares or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")or other securities), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value"current per share market price" (as determined pursuant to Section 11(d) hereof) of the Common Stock for which such Right is otherwise exercisable, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized an investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date is fixed by the Company or otherwise established for the issuance of rights, options or warrants to all holders of Preferred Common Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred to subscribe for or purchase Common Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock Common Stock) at a price per share of Preferred Common Stock or per share of equivalent preferred stock (or having a conversion price per shareshare of Common Stock, if a security convertible into Preferred Stock or equivalent preferred stockCommon Stock) less than the Current Market Price current market price (as determined pursuant to defined in Section 11(d) hereof)) per share of Preferred Common Stock 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, of which the numerator of which shall be the number of shares of Preferred Common Stock outstanding on such record date, date plus the number of shares of Preferred Common Stock which the aggregate offering price of the total number of shares of Preferred Common Stock and/or equivalent preferred stock 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, current market price and of which the denominator of which shall be the number of shares of Preferred Common Stock outstanding on such record date, date plus the number of additional shares of Preferred Common Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid by delivery of in a consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the RightsAgent. Shares of Preferred Common Stock 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, fixed or established; and in the event that such rights 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 fixedfixed or established.
(c) In case If the Company shall fix a record date for the making of a distribution to all holders of Preferred Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly periodic cash dividend out of the earnings or retained earnings of the Companydividend), assets (other than a dividend payable in Preferred Common Stock, but including any dividenddividend payable in stock other than Common Stock) or subscription rights 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 (as defined in Section 11(d)) per share of Common Stock on such record date, less the fair market value (as determined reasonably and with good faith to the holders of Rights by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants distributable in respect of one share of Common Stock and the denominator of which shall be the current market price per share of the Common Stock; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would be in effect if such record date had not been fixed.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, howeverHOWEVER, that in the event that the Current Market Price current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchannouncement
Appears in 1 contract
Samples: Rights Agreement (Illini Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares and other securities covered by each Right and the number of Rights issued (or to be issued) and outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any security of the Preferred Stock Company payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred StockShares, (C) combine the outstanding Preferred Stock Shares into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock 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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock Shares or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the adjusted Purchase Price then in effectPrice, the aggregate number and kind of shares of Preferred Stock Shares or other capital stock, as the case may be, whichthat, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Share transfer books of the Company were open, he such holder would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event that:
that any Person (A) other than the Company, any PersonSubsidiary 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, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, Person unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof13 Event, or is an acquisition of shares of Common Stock Shares pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock Shares at a price or for consideration and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the CompanyDirectors, after receiving advice from one or more nationally recognized investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholdersstockholders (a "Qualifying Offer"), or
(B) (1) at least a majority of the members of after taking into consideration all factors that the Board of Directors who are not officers deems relevant, including, without limitation, the long-term prospects and value of the CompanyCompany and the prices and terms that the Board of Directors believes, after reasonable inquiry and investigationin good faith, could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value, then, promptly following the first occurrence of any a Section 11(a)(ii) Event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred StockShare Fractions, such number of shares of Common Stock Shares of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock Share Fractions for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the current market price (as defined in and determined pursuant to Section 11(d) hereof) per Common Share on the date of such first occurrence (such number of shares, the "Adjustment Shares").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which Shares that are authorized by the Company's articles or certificate of incorporation Charter but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as excess, the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock Shares of the same or a different class or other equity securities of the Company (including, without limitation, shares, preferred shares or units of shares, preferred shares that a majority of preferred stock which the Board of Directors of in office at the Company time has deemed (based, among other things, on the dividend and liquidation rights of such preferred shares) to have substantially the same economic value as shares of Common Stock Shares (such shares of preferred stock being shares, hereinafter referred to herein as "common stock share equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by a majority of the Board of Directors of the Company based upon after considering the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock Shares (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock Shares could be authorized for issuance upon exercise in full of the Rights, the 30 thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the The Company shall issue make a public announcement stating that when the exercisability of the Rights has been temporarily suspended, as well as a public announcement at and again when such time as the suspension is no longer in effect. The Company shall notify the Rights Agent of the suspension of the exercisability of the Rights, and provide the Rights Agent with a copy of such public announcement. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock Shares shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock Share on the Section 11(a)(ii) Trigger Date and the value of any "common stock share equivalent" shall be deemed to have the same value as the Common Stock Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock any security of the Company entitling them to subscribe for or purchase (for a period expiring within 45 forty-five (45) calendar days after such record date) Preferred Stock Shares (or shares having the same rights, privileges and preferences as the shares of Preferred Stock Shares ("equivalent preferred stockshares")) or securities convertible into Preferred Stock Shares or equivalent preferred stock shares at a price per share of Preferred Stock Share or per share of equivalent preferred stock share (or having a conversion price per share, if a security convertible into Preferred Stock Shares or equivalent preferred stockshares) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock Share 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 shares of Preferred Stock Shares outstanding on such record date, plus the number of shares of Preferred Stock which Shares that the aggregate offering price of the total number of shares of Preferred Stock Shares and/or equivalent preferred stock 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 Pricecurrent market price, and the denominator of which shall be the number of shares of Preferred Stock Shares outstanding on such record date, plus the number of additional shares of Preferred Stock Shares and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Company, the Rights Agent and the holders of the Rights. Preferred Shares of Preferred Stock 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 or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which that would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to all holders of Preferred Stock Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a regular quarterly dividend referred to above or dividend payable in Preferred StockShares, but including any dividenddividend payable in stock other than Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the current market price (as determined pursuant to Section 11(d) hereof) per Preferred Share on such record date, less the then 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 and shall be conclusive for all purposes) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a Preferred Share and the denominator of which shall be such current market price (as determined pursuant to Section 11(d) hereof) per Preferred 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 be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock Share on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Share for the 30 thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to and not including such date, ; and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock Share on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Share for the 10 ten (10) consecutive Trading Days immediately following and not including such date; provided, however, that in the event that the Current Market Price current market price per share of the Common Stock Share is determined during a period following the announcement by the issuer of such Common Stock Share of (A) a dividend or distribution on such Common Stock Share payable in shares of Common Stock Shares or securities convertible into shares of Common Stock Shares (other than the Rights), or (B) any subdivision, combination or reclassification of such Common StockShares, and prior to the expiration of the requisite 30 thirty (30) Trading Day or 10 ten (10) 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 Pricecurrent market price" shall be properly adjusted to take into account ex-dividend trading. The closing price for each day Trading 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 NYSE New York Stock Exchange or, if the shares of Common Stock Shares are not listed or admitted to trading on the NYSENew 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 shares of Common Stock Shares are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") Nasdaq or such other system then in use, or, if on any such date, date the shares of Common Stock Shares are not quoted by any suchsuch 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
Appears in 1 contract
Samples: Rights Agreement (Dispatch Management Services Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Securities or Number of Rights. The Purchase Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In To preserve the event actual or potential economic value of the Company shall Rights, if at any time after the date of this Rights Agreement (A) declare a dividend on there shall be any change in the Common Stock or the Preferred Stock, whether by reason of stock dividends, stock splits, recapitalizations, mergers, consolidations, combinations or other similar changes in capitalization, any distribution or issuance of cash, assets, evidences of indebtedness or subscription rights, options or warrants to holders of Common Stock payable or Preferred Stock, as the case may be (other than distribution of the Rights or regular cash dividends) or otherwise, then, in each such event the Board shall make such appropriate adjustments in the number of shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-division, combination or reclassification, and the number and kind of shares other securities) issuable upon exercise of Preferred Stock or other capital stockeach Right, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then and Redemption Price in effect, effect at such time and the aggregate number and kind of shares Rights outstanding at such time (including the number of Preferred Stock Rights or other capital stock, as fractional Rights associated with each share of Common Stock) such that following such adjustment such event shall not have had the case may be, which, if such Right had been exercised immediately prior to such date and at a time when effect of reducing or limiting the Preferred Stock transfer books benefits the holders of the Company were open, he Rights would have owned upon had absent such exercise and been entitled to receive event. The adjustments provided for in this Section 11(a)(i) shall be made successively whenever such an adjustment is required by virtue of such dividend, subdivision, combination or reclassificationthis Section 11(a)(i). If an event occurs which would will require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In subject to the event that:
(A) any Personprovisions of Section 13, shall, at any time after then only the Rights Dividend Declaration Date, provisions of Section 13 shall apply and no adjustment shall be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock made pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any this Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement).
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of there shall not be sufficient shares of Common Preferred Stock which are authorized by the Company's articles or certificate of incorporation issued but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient authorized but unissued to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company covenants and agrees that it will take all such action as may be necessary to authorize additional shares of Preferred Stock for issuance upon the exercise of Rights; provided, however, that if the Company is unable to cause the authorization of additional shares of Preferred Stock, then the Company shall: , or in lieu of seeking any such authorization, the Company may, to the extent necessary and permitted by applicable law and any agreements, indentures or instruments in effect prior to the Distribution Date to which it is a party, (A) determine upon surrender of a Right, pay cash equal to the excess Purchase Price in lieu of issuing shares of Preferred Stock and requiring payment therefor, (1B) upon due exercise of a Right and payment of the Purchase Price for each share of Preferred Stock as to which such Right is exercised, issue equity securities having a value equal to the value of the Adjustment Shares shares of Preferred Stock which otherwise would have been issuable pursuant to the foregoing subparagraph (ii), which value shall be determined by an investment banking firm selected by the Board, or (C) upon the due exercise of a Right (the "Current Value") over (2) and payment of the Purchase Price (for each share of Preferred Stock as to which such excess being referred to herein as the "Spread")Right is exercised, and (B) with respect to each Rightdistribute Preferred Stock, make adequate provision to substitute for the Adjustment SharesCommon Stock, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (includingsecurities, without limitation, shares, cash or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing thereof) having an aggregate value equal to the Current Valuevalue of the shares of Preferred Stock which otherwise would have been issuable pursuant to the foregoing subparagraph (ii), where such aggregate which value has been shall be determined by the Board of Directors of the Company based upon the advice of a nationally recognized an investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional sharesBoard. To the extent that any legal or contractual restrictions (pursuant to agreements or instruments in effect prior to the Distribution Date to which it is party) prevent the Company determines that some action need be (and may be) taken pursuant to from paying the first and/or second sentences of this Section 11(a)(iii), full amount payable in accordance with the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspensionforegoing sentence, the Company shall issue a public announcement stating that the exercisability pay to holders of the Rights has been temporarily suspended, as well as a public announcement at to which such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to payments are being made all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 amounts which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be restricted on a pro rata basis as such payments become permissible under such legal or contractual restrictions until such payments have been paid in effect if such record date had not been fixedfull.
(c) In case the Company shall fix a record date for a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices Closing Prices (as hereinafter defined) per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in if the event that the Current Market Price current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities exercisable for or convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, after the ex-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 Pricecurrent market price" shall be properly adjusted to take into account ex-ex- dividend trading. The closing price "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 NYSE American Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the NYSEAmerican Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") NASDAQ or such other system then in use, use or, if on any such date, date the shares of Common Stock are not quoted by any suchsuch organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the Common Stock, 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. If the Common Stock is not publicly held or not so listed or traded, the "current market price" per share means the fair value per share as determined in good faith by the Board of Directors of the Company, or, if at the time of such determination there is an Acquiring Person, by a majority of the Continuing Directors then in office, or if there are no Continuing Directors, by an investment banking firm selected by the Board of Directors, which determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current market price" of the Preferred Stock shall be determined in the same manner as set forth above for the Common Stock in Section 11(b)(i). If the current market price for the Preferred Stock cannot be determined in the manner provided above, the "current market price" of the Preferred Stock shall be conclusively deemed to be the current market price of the Common Stock (appropriately adjusted to reflect any stock split, stock dividend, or similar transaction occurring after the date hereof), multiplied by one thousand. For the purpose of any computation hereunder, the value of any securities or assets other than the Preferred Stock or Common Stock of the Company shall be the fair value as determined in good faith by the Board of Directors of the Company, and, if at the time of such determination there is an Acquiring Person, by a majority of the Continuing Directors then in office, or, if there are no Continuing Directors, by an investment banking firm selected by the Board of Directors, which determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
(c) Except as hereinafter provided, no adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(c) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one one-hundred thousandth (1/100,000th) of a share of Preferred Stock. Notwithstanding the first sentence of this Section 11(c), any adjustment required by this Section 11 shall be made no later than the earlier of (i) one year from the date of the transaction which mandates such adjustment or (ii) the Expiration Date.
(d) If, as a result of an adjustment made pursuant to Section 11(a), the holder of any Right thereafter exercised shall become entitled to receive any securities other than shares of Preferred Stock, thereafter the number of such securities 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 of Section 11(a) through (c), inclusive and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock shall apply, as nearly as reasonably may be, on like terms to any such other securities.
(e) All Rights originally issued by the Company subsequent to any adjustment made to the number of shares of Preferred Stock or other securities relating to a right shall evidence the right to purchase, for the Purchase Price, the adjusted number and kind of securities purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.
(f) Irrespective of any adjustment or change in the Purchase Price or the number of shares of Preferred Stock or number or kind of other securities issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the terms which were expressed in the initial Right Certificates issued hereunder.
(g) Before taking any action that would cause an adjustment reducing the Purchase Price per whole share of Preferred Stock upon exercise below the then par value, if any, of the shares of Preferred 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 shares of Preferred Stock at such adjusted Purchase Price.
(h) In any case in which this Section 11 shall require that an adjustment 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 issuance to the holder of any Right exercised after such record date the number of shares of Preferred Stock (or other securities) issuable upon such exercise over and above the number of shares of Preferred Stock (or other securities) issuable before giving effect to such adjustment; provided, however, that the Company shall deliver to such holder a due xxxx or other appropriate instrument evidencing such holder's right to receive such additional shares or securities upon the occurrence of the event requiring such adjustment.
(i) The Company covenants and agrees that it will not at any time after the Distribution Date (i) consolidate with, (ii) merge with or into, or (iii) sell or otherwise transfer (and/or permit any of its Subsidiaries to sell or otherwise transfer), in one transaction or a series of related transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries taken as a whole, to any other Person or Persons if (x) at the time of or immediately after such consolidation, merger or sale there are any rights, warrants or other instruments or securities outstanding or any agreements or arrangements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights or (y) prior to, simultaneously with or immediately after such consolidation, merger or sale, the stockholders of a Person who constitutes, or would constitute, the "Principal Party" for the purposes of Section 13 shall have received a distribution of Rights previously owned by such Person or any of its Affiliates and Associates.
(j) The Company covenants and agrees that after the Distribution Date, it will not, except as permitted by Section 23, Section 24 or Section 27 take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights.
Appears in 1 contract
Samples: Rights Agreement (Petrocorp Inc)
Adjustment of Purchase Price. NUMBER AND KIND TYPE OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided provide in this Section 11.
(i) In the event that the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred StockShares, (C) combine the outstanding Preferred Stock Shares into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock 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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and and/or the number and and/or kind of shares of Preferred Stock or other capital stock, as the case may be, stock issuable on such datedate upon exercise of a Right, shall be proportionately adjusted so 80 that the holder of any Right exercised after such time shall be entitled to receive, receive upon payment of the Purchase Price then in effect, effect the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Shares transfer books of the Company were open, he or she would have owned 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 this Section 11(a)(i11.(a)(i) and Section 11(a)(ii11.(a)(ii) hereof or Section 13 hereof, the adjustment provided for in this Section 11(a)(i11.(a)(i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii11.(a) (ii) or Section 13 hereof.
(ii) In Subject to the provisions of Section 11.(o) hereof, in the event that:
that (A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, shall, at any time after the Rights Dividend Declaration Datedate of this Agreement, directly or indirectly shall (1) merge into the Company or otherwise combine with the Company and the Company shall be the continuing or become an Acquiring Personsurviving corporation of such merger 11 or combination, unless the event causing such Person to have become an Acquiring Person is other than in a transaction set forth in subject to Section 13(a) 13 hereof, (2) merge or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers otherwise combine with any Subsidiary of the Company, after receiving advice from (3) in one or more investment banking firms, to be transactions (x) fair to stockholders (taking other than in connection with the exercise or exchange of Rights or the exercise or conversion of securities exercisable for or convertible into account all factors which such members shares of the Board deem relevant) and (y) otherwise in the best interests any class of capital stock of the Company and or any of its stockholders, or
(BSubsidiaries) (1) at least a majority transfer any assets to the Company or any Subsidiary of the members Company in exchange (in whole or in part) for shares of any class of capital stock of the Board Company or any Subsidiary of Directors who are not officers the Company or for securities exercisable for or convertible into shares of any class of capital stock of the Company or any Subsidiary of the Company, after reasonable inquiry and investigationor otherwise obtain from the Company or any Subsidiary of the Company, thenwith or without consideration, promptly following the first occurrence any additional shares of any Section 11(a)(ii) Event, each holder class of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock capital stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers or any Subsidiary of the Company determine that the following is not permitted by the terms or securities exercisable for or convertible into shares of any agreement or instrument to which class of capital stock of the Company is a party on the date or of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities any Subsidiary of the Company (including, without limitation, shares, or units other than as part of shares, a pro rata distribution to all holders of preferred such shares of any class of capital stock which the Board of Directors of the Company has deemed to have substantially or any Subsidiary of the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")Company), (4) debt securities sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions) of any assets (including securities) to, from, with or of, as the case may be, the Company or any Subsidiary of the Company, other than in a transaction subject to Section 13 hereof, (5) receive any compensation from the Company or any Subsidiary of the Company other assetsthan compensation for full-time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (6) receive the benefit, directly or indirectly (except proportionately as a shareholder), of any combination of the foregoing having an aggregate value equal to the Current Valueloans, where such aggregate value has been determined advances, guarantees, pledges or other financial assistance or any tax credits or other tax advantage provided by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors or any Subsidiary of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such;
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSRIGHTS (INCLUDING FLIP-IN PROVISION). The Purchase Price, the number and kind of shares or other securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare and pay a dividend on the Preferred Stock shares which are subject to the Rights ("Subject Shares") payable in shares of Preferred Stockstock of the Company, (B) subdivide or split the outstanding Preferred StockSubject Shares, (C) combine or consolidate the outstanding Preferred Stock Subject Shares into a smaller number of sharesshares or effect a reverse stock split of the Subject Shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Subject Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, and in each such event, except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination split, reverse split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned received upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassificationreceive. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In If at any time after the event that:date of this Agreement
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless or any Associate or Affiliate of any Acquiring Person, directly or indirectly (1) shall merge into the event causing Company or any of its Subsidiaries or otherwise combine with the Company or any of its Subsidiaries and the Company or such Subsidiary shall be the continuing or surviving corporation of such merger or combination and the Common Stock shall remain outstanding and the outstanding shares thereof shall not be changed into or exchanged for stock or other securities of the Company or of any other Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereofor cash or any other property, or is an acquisition of shares of Common Stock pursuant to a tender offer (2) shall sell or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from otherwise transfer in one or more investment banking firmstransactions, assets to be (x) fair to stockholders (taking into account all factors which such members the Company or any of its Subsidiaries in exchange for 15 percent or more of the Board deem relevant) and (y) otherwise in the best interests shares of any class of capital stock of the Company or any of its Subsidiaries, and its stockholdersthe Common Stock shall remain outstanding and unchanged, or
(B) directly or indirectly, any Acquiring Person, or any Associate or Affiliate of any Acquiring Person, shall (1) at least a majority in one or more transactions, transfer assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class of capital stock of the members Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class of capital stock of the Board Company or any of Directors who are not officers its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class of capital stock of the Company or any of its Subsidiaries or other securities exercisable for or convertible into shares of any class of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution by the Company or such Subsidiary to all holders of Common Stock), or (2) sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (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, or (3) receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full-time employment as a regular employee, or fees for serving as director, at rates in accordance with the Company's (or its Subsidiaries') past practices, or (4) receive the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance provided by the Company or any of its Subsidiaries, 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, or
(C) during any 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, after reasonable inquiry and investigationor any merger or consolidation of the Company with any of its Subsidiaries or any other similar transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person or any Affiliate or Associate of such Acquiring Person) which has the effect, directly or indirectly, of increasing by more than one percent 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 owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, or
(D) any Person shall become an Acquiring Person otherwise than pursuant to a Qualified Offer, then, promptly following the first occurrence and in each such case, but subject to Section 27 (covering exchange of any Rights for shares of Common Stock, without requiring exercise of Rights) and to Section 11(a)(ii) Event23 (covering redemption of Rights), proper adjustment and provision shall be made so that each holder of a Right (except as provided below and in Section 7(e7(f)) hereofshall, on and after the later of (I) shall thereafter the date of the occurrence of an event described in clause (A), (B), (C) or (D) of this Section 11(a)(ii), or (II) the expiration of the period within which the Rights may be redeemed under Section 23 (as the same may have been amended under Section 26), have the right to receive, upon exercise thereof at the then current Purchase Price, the number of shares of Common Stock equal to the result obtained by (x) multiplying the then current Purchase Price by the then number of Units for which a Right is then exercisable and dividing that product by (y) 50 percent of the current market price per share of Common Stock (determined in accordance with Section 11(d)) on the date of the occurrence of the relevant event listed above in clause (A), (B), (C) or (D) of this subparagraph (ii); PROVIDED, HOWEVER, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13, then only the provisions of Section 13 (flip-over provisions) shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not consummate any such merger, combination, transfer or transaction referred to in any of such clauses (A), (B) and (C) unless prior thereto there shall be sufficient authorized but unissued Common Stock to permit the exercise in full of the Rights in accordance with the terms foregoing sentence, unless the Board of this AgreementDirectors has determined to issue Equivalent Stock in accordance with Section 7(a); PROVIDED, HOWEVER, that in lieu no case may the Company consummate any such merger, combination, transfer or transaction if at the time of or immediately after such transaction there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights. If the Company issues Equivalent Stock upon the exercise of any Rights pursuant to the immediately preceding paragraph, then, upon any such exercise, proper provision shall be made so that the holder of a number of one one-thousandths of a share of Preferred StockRight (except as provided in Section 7(f)) shall have the right to receive, upon such exercise at the then current Purchase Price, such number of shares or other units of Common Equivalent Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock Units for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority 50 percent of the members current market price per share or other unit of the Company's Board of Directors who are not officers Equivalent Stock of the Company determine that (determined on substantially the following same basis as is not permitted prescribed by Section 11(d) with respect to the terms valuation of Common Stock) on the date of occurrence of the relevant event listed above in clause (A), (B), (C) or (D) of this subparagraph (ii). If at any time the Company should be prohibited by law, by any provision of its articles of incorporation, or by any instrument or agreement or instrument to which the Company is a party on the date of this Agreement (oror by which it is bound, if the Board of Directors so determinesfrom issuing, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's or should be unable under its articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not to issue, sufficient Equivalent Stock to permit the exercise in full of the all outstanding Rights in accordance with the foregoing subparagraph (ii) sentence, then, in lieu of this Section 11(a)issuing such Equivalent Stock upon such exercise, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise shall pay to each holder of a Right (the "Current Value"except as provided in Section 7(f)) over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment surrender of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, Right as provided herein but without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or an amount in cash have an aggregate value for each Right equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such datePurchase Price.
(b) In case If after the Rights Record Date the Company shall fix sets a record date for the issuance of rights, options rights or warrants to all holders of Preferred Common Stock or Subject Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred to subscribe for or purchase Common Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) Subject Shares or securities convertible into Preferred Common Stock or equivalent preferred stock Subject Shares at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stockCommon Stock) less than the Current Market Price current market price per share (as determined pursuant to with Section 11(d)) hereof) per share of Preferred Stock 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 total number of shares of Preferred Common Stock and Subject Shares outstanding on such record date, date plus the number of shares of Preferred Common Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 Pricecurrent market price, and the denominator of which shall be the total number of shares of Preferred Common Stock and Subject Shares outstanding on such record date, date plus the number of additional shares of Preferred Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription or purchase price may be paid by delivery of consideration part paid, in whole or all of which may be in part, in a form other than cash, the value of such consideration shall be as determined in good faith by the Board board of Directors directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the RightsAgent. Shares of Preferred Stock 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 if such rights 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 fixedset.
(c) In case If the Company shall fix at any time after the Rights Record Date sets a record date for making a distribution to all holders on shares of Preferred Common Stock or the Subject Shares, whether by way of a dividend, distribution, reclassification of stock, recapitalization, reorganization or partial liquidation of the Company or otherwise (and including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) ), of subscription rights or warrants (excluding those referred to in Section 11(b)), evidences of indebtedness, cash (indebtedness or other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than (i) regular periodic cash dividends, (ii) a dividend payable in Preferred Common Stock or (iii) a distribution which is part of or is made in connection with a transaction to which Section 11(a)(ii) or Section 13 applies), then 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, of which the numerator shall be the current market price per share of Common Stock (determined with Section 11(d)) on such record date, less the fair market value applicable to one share of Common Stock (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 such assets or evidences of indebtedness or of such subscription rights or warrants so to be distributed, and of which the denominator shall be such current market price per share of Common Stock. Such adjustments shall be made successively whenever such a record date is fixed; and if such distribution is not so made, but including any dividendthe 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.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the The "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 30 consecutive Trading Days (as such term is hereinafter defineddefined below) immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in if the event that the Current Market Price current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current Market Price" current market price shall be properly appropriately adjusted to take into account reflect the current market price per share of Common Stock in connection with 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which market where the shares of Common Stock are listed or admitted to trading or, if trading. If the shares of Common Stock are not listed or admitted to trading on any national securities exchange, the last quoted then closing price or, if not so quoted, will be determined with reference to 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 Dealers, Inc., Automated Quotation System ("NASDAQ") or such other system then in use, or, if ). If on any such date, date the shares of Common Stock are not quoted by any suchsuch organization, the fair market value of such shares on such date as determined in good faith by the board of directors shall be used. Any such determination of current market price shall be described in a statement filed with the Rights Agent. For the purpose of any computation hereunder, the "current market price" of a Unit shall be deemed to be equal to the current market price per share of Common Stock, and the "current market price" of a Subject Share shall be deemed to be equal to the current market price per share of Common Stock divided by the number of Subject Shares which comprise a Unit.
Appears in 1 contract
Samples: Rights Agreement (Us Energy Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber, and Kind of Shares, or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide subdivides the outstanding Preferred Stock, (C) combine combines the outstanding Preferred Stock into a smaller number of shares, or (D) issue issues or authorizes the issuance of any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination combination, or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to before such date and at a time when the Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, or reclassification. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior tobefore, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event that:
(A) any Person, shallIf, at any time after the Rights Dividend Declaration Datedate of this Agreement, be any Person, alone or together with its Affiliates or Associates, shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to then proper provision shall be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the Purchase Price then current Purchase Price in accordance with the terms of this Agreement, in lieu of a the number of one one-thousandths of a share shares of Preferred StockStock for which a Right would otherwise be exercisable, such a number of shares of Common Stock of the Company as shall equal to the result obtained by (x1) multiplying the Purchase Price then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock for which one a Right was exercisable immediately prior to before the first occurrence of a an event set forth in this Section 11(a)(ii) Event), and (y) dividing that product by (which, following 2) 50% of the current market price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such first occurrence, shall thereafter be referred to as occurrence (the "Purchase Price" for each Right and for all purposes of this AgreementAdjustment Shares").
(iii) Unless at least a majority of the members of the Company's Board of Directors who If there are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of sufficient authorized but unissued and treasury shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (shall take all such excess being referred action as may be necessary to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as authorize additional shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities for issuance upon exercise of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyRights; provided, however, if the Company shall not have made adequate provision is unable to deliver value pursuant to clause (B) above within 30 days following cause the later of (x) the first occurrence authorization of a Section 11(a)(ii) Event and (y) the date on which the Company's right sufficient number of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of Stock, then, if the RightsRights become so exercisable, the 30 day period set forth above may be extended Company, with respect to each Right and to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, necessary and permitted by applicable law and any agreements or instruments in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation effect on the part of Stock Acquisition Date to which it is a party, shall, upon the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event exercise of any such suspensionRight, make adequate provision to: (A) pay an amount in cash equal to the Company shall issue a public announcement stating that excess of (1) the exercisability product of (a) the Rights has been temporarily suspendednumber of Adjustment Shares, as well as a public announcement at such time as multiplied by (b) the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the date of the first occurrence of an event set forth in Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on above (such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 product is fixed, and in the event that such rights 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, herein called the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the Value"Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares, or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Common Stock payable in shares of Preferred Common Stock, (B) subdivide the outstanding Preferred Common Stock, (C) combine the outstanding Preferred Common Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Common Stock (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) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination combination, or reclassification, and the number and kind of shares of Preferred Common Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right thereafter exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, purchase the aggregate number and kind of shares of Preferred Common Stock or other capital stock, as the case may be, whichthat, if such the Right had been exercised immediately prior to before such date and at a time when the Preferred Stock transfer books of the Company were opendate, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, or reclassification. If the record date for any such dividend, subdivision, combination, or reclassification shall occur before the Distribution Date, however, the Company shall appropriately adjust the Purchase Price (taking into account any additional Rights that may be issued as a result of such dividend, subdivision, combination, or reclassification), in lieu of adjusting (as described above) the number of shares of Common Stock (or other capital stock, as the case may be) issuable upon exercise of the Rights. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior tobefore, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) In the event that:
If, subject to Section 24, any Person (A) any other than an Exempt Person), alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, be become the Beneficial Owner of 15% or become an Acquiring Personmore of the shares of Common Stock then outstanding, unless the event causing such Person the 15% threshold to have become an Acquiring Person be crossed is a transaction set forth described in Section 13(a) hereof), or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers representatives, nominees, Affiliates, or Associates of an Acquiring Person or the CompanyPerson making such tender or exchange offer, after receiving advice from one or more investment banking firms, to be (xa) at a price that is fair to stockholders shareholders (taking into account all factors which such members of that the Board of Directors deem relevantrelevant including, without limitation, prices that could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (yb) otherwise in the best interests of the Company and its stockholdersshareholders, or
(B) (1) at least a majority of then immediately upon the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any event described in this Section 11(a)(ii) Event), each holder of a Right (except as provided below and in Section 7(e) hereof)) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price Price, but in no event less than the par value per share in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths shares of a share of Preferred Common Stock for which one a Right was exercisable immediately prior to before the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (whichthat, following such first occurrence, occurrence shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the current market price (determined pursuant to Section 11(d)) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Share Amount").
(iii) Unless at least a majority In lieu of the members issuing shares of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (orCommon Stock in accordance with Section 11(a)(ii), if the Board of Directors so determines, after the date of this Agreement), then in the event determines that the number action described below in this Section 11(a)(iii) is necessary or appropriate and not contrary to the interests of shares the holders of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes Rights (other than upon exercise any Acquiring Person and any Affiliate or Associate of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(aany such Person), the Company shallmay: (A) determine the excess of (1) the value of the Adjustment Shares Share Amount issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as excess, the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment SharesShare Amount, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase PricePrice (but in no event to less than the par value per share), (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which that the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein in this Agreement as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; providedDirectors. If, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being are referred to herein in this Agreement as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase PricePrice (except for the payment of an amount equal to the par value of each share), shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order so that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such period, as it may be extended, is referred to in this Agreement as the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that If the Company determines that some action need be (and may be) taken pursuant to the first and/or or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof), that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of If any such suspensionsuspension occurs, the Company shall issue a public announcement stating announcements that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as suspended and that the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof)) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case If the Company shall fix a record date for the issuance of rightsrights (other than the Rights), options options, or warrants to all holders of Preferred Common Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Common Stock (or shares having the same rights, privileges privileges, and preferences as the shares of Preferred Common Stock ("equivalent preferred stockEquivalent Common Stock")) or securities convertible into Preferred Common Stock or equivalent preferred stock Equivalent Common Stock at a price per share of Preferred Common Stock or per share of equivalent preferred stock Equivalent Common Stock (or having a conversion price per share, if a security convertible into Preferred Common Stock or equivalent preferred stockEquivalent Common Stock) less than the Current Market Price current market price per share of Common Stock (as determined pursuant to Section 11(d)) hereof) per share of Preferred Stock 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 before such record date by a fraction, the numerator of which shall be the number of shares of Preferred Common Stock outstanding on such record date, date plus the number of shares of Preferred Common Stock which that the aggregate offering price of the total number of shares of Preferred Common Stock and/or equivalent preferred stock so or Equivalent Common Stock to be offered (and/or or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Pricecurrent market price, and the denominator of which shall be the number of shares of Preferred Common Stock outstanding on such record date, plus the number of additional shares of Preferred Common Stock and/or equivalent preferred stock or Equivalent Common Stock 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 by delivery of fully or partially in a consideration part or all of which may 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 CompanyDirectors, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Common Stock 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 if such rights or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which that would then be in effect if such record date had not been fixed.
(c) In case If the Company shall fix fixes a record date for a distribution to all holders of Preferred Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Common Stock, but including any dividenddividend payable in stock other than Common Stock), or subscription rights 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 before such record date by a fraction, the numerator of which shall be the current market price per share of Common Stock (as determined pursuant to Section 11(d)) on such record date, less the fair market value (as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the cash, assets, or evidences of indebtedness to be distributed or of such subscription rights or warrants applicable to a share of Common Stock and the denominator of which shall be such current market price per share of Common Stock (as determined pursuant to Section 11(d)). Such adjustments shall be made successively whenever such a record date is fixed, and if such distribution is not so made, the Purchase Price shall be adjusted to be the Purchase Price that would have been in effect if such record date had not been fixed.
(id) For the purpose of any computation hereunderunder this Agreement, other than computations made pursuant to Section 11(a)(iii) hereof), the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 30 consecutive Trading Days (as hereinafter defined immediately before such term is hereinafter defined) immediately prior to such date, date and for purposes of computations made pursuant to Section 11(a)(iii) hereof), the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 ten consecutive Trading Days immediately following such date; provided, however, that in . If the event that the Current Market Price "current market price" per share of the Common Stock is determined determined, however, during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination combination, or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 combination, or reclassification, then, and in each such case, shall not have occurred before 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 commencement 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 requisite 30-Trading Day or admitted to trading on the NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 over10-the-counter market, as reported by the National Association of Securities Dealers Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchTrading Day
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by shares, or fractions thereof, purchasable upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Common Stock payable in shares of Preferred Common Stock, (B) subdivide or split the outstanding Preferred Common Stock, (C) combine or consolidate the outstanding Preferred Common Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Common Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Common Stock (or other capital stock, as the case may be, ,) issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Common Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date (whether or not such Right was then exercisable) and at a time when the Preferred Stock transfer books for the Common Stock (or other capital stock, as the case may be) of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination split, combination, consolidation or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event that:
(A) any Person, Person shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Eventsuch event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths shares of a share of Preferred Common Stock for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) EventEvent (whether or not such Right was then issued or exercisable), and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate Restated Certificate of incorporation Incorporation, as amended (the "Restated Certificated of Incorporation"), but which are not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are Rights, is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: Company, acting by resolution of the Board, shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, shares or units of shares, shares of preferred stock or other securities which the Board of Directors of the Company has deemed to have substantially essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalentsCommon Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any sucha
Appears in 1 contract
Samples: Rights Agreement (First Mid Illinois Bancshares Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred StockShares, (C) combine the outstanding Preferred Stock Shares into a smaller number of shares, Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Shares (including any such reclassification in connection with a consolidation consolidation, merger or merger statutory share exchange in which the Company is the continuing continuing, surviving or surviving acquiring corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock issuable on such datedate pursuant to the exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effecteffect (and any applicable transfer taxes), the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Shares transfer books of the Company were open, he such holder would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In Subject to Section 24 of this Agreement, in the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have shall become an Acquiring Person is (other than (A) pursuant to any Section 13 Event occurring after the Distribution Date or within 15 days prior thereto or (B) as a transaction set forth in Section 13(a) hereof, or is result of an acquisition of shares Common Shares of Common Stock the Company pursuant to a tender offer or an exchange offer for all outstanding shares Common Shares of Common Stock the Company at a price and on terms determined by the Board of Directors of the Company, at least a time when a majority of the members of the Board of directors then serving are Continuing Directors who are not officers of the Company, and after receiving advice from one or more investment banking firms, to be (x1) fair to stockholders shareholders (taking into account all factors which such members of the Board deem of Directors deems relevant) ), and (y2) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of shareholders and which the Board of Directors who are not officers determines to recommend to the shareholders of the Company), after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, proper provision shall be made so that each holder of a Right (except as provided below and in Right, subject to Section 7(e) hereof) 11(a)(iii), shall thereafter have the a right to receive, upon exercise thereof at by payment of the amount equal to the product of the number of one five-hundredths of a Preferred Share which would otherwise be issuable upon exercise of a Right and the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred StockShares, such number of shares of Common Stock Shares of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one onefive-thousandths hundredths of a share of Preferred Stock Share for which one a Right was is exercisable immediately prior to the first occurrence of a the Section 11(a)(ii) Event, Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority by 50% of the members then current per share market price of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument Common Shares (determined pursuant to which the Company is a party Section 11(d)) on the date of this Agreement (or, if the Board of Directors so determines, such occurrence. From and after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event or a Section 13 Event, any Rights that are beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) or were beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) after the Acquiring Person became an Acquiring Person shall become null and (y) the date on which the Company's right void without any further action and no holder of redemption such Rights shall thereafter have any rights to exercise such Rights or any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. No Right Certificate shall be issued pursuant to Section 23(a) expires (3 that represents Rights that would be void pursuant to the later preceding sentence; no Right Certificate shall be issued at any time upon the transfer of (x) any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate of such an Acquiring Person or to any nominee of such Acquiring Person, Associate or Affiliate; and (y) being referred any Right Certificate delivered to herein as the "Rights Agent for transfer to an Acquiring Person or any Associate or Affiliate of such Acquiring Person whose Rights would be void pursuant to the preceding sentence shall be canceled. The Company shall use all reasonable efforts to insure that the provisions of this Section 11(a)(ii) Trigger are complied with, but shall have no liability to any holder of a Right Certificate or other Person as a result of its failure in good faith to make any determinations with respect to an Acquiring Person or its Affiliates or Associates.
(iii) If, on the date of the occurrence of a Section 11(a)(ii) Event (the "Adjustment Date"), the Company does not have sufficient authorized, unissued and unreserved Common Shares available to permit the exercise in full of all Rights that are exercisable on the Adjustment Date for the number of Common Shares per Right provided for in Section 11(a)(ii), then the Exercise Price (as defined below) and the number of Common Shares to be delivered by the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be further adjusted as provided in this subparagraph (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iiiiii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by or other securities subject to purchase upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement Rights Dividend Declaration Date (A) declare a dividend on the outstanding shares of Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding shares of Preferred Stock, (C) combine the outstanding shares of Preferred Stock into a smaller number of shares, shares or (D) issue any otherwise reclassify the outstanding shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to Sections 23 and 24 of this Agreement, in the event that:
(A) any Person, Person shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is (1) a transaction set forth in Section 13(aFlip- Over Event or (2) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding Permitted Offer (PROVIDED that this clause (2) shall cease to apply if such Acquiring Person thereafter becomes the Beneficial Owner of any additional shares of Common Stock at other than pursuant to such Permitted Offer or a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Companytransaction set forth in Section 13(a) or 13(d) hereof), after receiving advice from one or more investment banking firms, to be then (x) fair the Purchase Price shall be adjusted to stockholders (taking into account all factors be the Purchase Price immediately prior to the first occurrence of a Flip-In Event multiplied by the number of Fractional Shares of Preferred Stock for which a Right was exercisable immediately prior to such members of the Board deem relevant) first occurrence and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below in Section 11(a)(iii) and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at a price equal to the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share shares of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying dividing the then current Purchase Price by 50% of the then Current Market Price per share of Common Stock on the date of such first occurrence (such number of one one-thousandths shares, the "Adjustment Shares"); PROVIDED that the Purchase Price and the number of a share Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement).
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which that are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: , to the extent permitted by applicable law and regulation, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (computed using the Current Market Price used to determine the number of Adjustment Shares) (the "Current Value") over (2) the Purchase Price (such excess being is herein referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon the exercise of the Rights and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which (including, without limitation, the Preferred Stock) that the Board of Directors of the Company has deemed determined to have substantially the same value as shares of Common Stock (such shares of preferred stock being are herein referred to herein as "common stock equivalentsCommon Stock Equivalents")), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; providedPROVIDED, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-In Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Flip-In Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Flip-In Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company or the Board of Directors determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Flip-In Trigger Date and the value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stockEquivalent Preferred Stock")) or securities convertible into Preferred Stock or equivalent preferred stock Equivalent Preferred Stock at a price per share of Preferred Stock or per share of equivalent preferred stock Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stockEquivalent Preferred Stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which that the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock 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 by delivery of consideration consideration, part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividenddividend payable in stock other than Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of Preferred Stock 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 and shall be binding on the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred Stock and the denominator of which shall be such Current Market Price per share of Preferred Stock. 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 be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock of a Person on any date shall be deemed to be the average of the daily closing prices Closing Prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices Closing Prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; providedPROVIDED, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than a regular quarterly cash dividend or the dividend of the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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, shall not have occurred prior to the commencement of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, then, and in each such case, the "Current Market Price" Price shall be properly adjusted to take into account ex-dividend trading. The closing price for each day If the Common Stock is not publicly held or not 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 last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid Rights Agent 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchshall be conclusive for all purposes.
Appears in 1 contract
Samples: Rights Agreement (American Residential Services Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares or other securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare and pay a dividend on the Preferred Stock shares which are subject to the Rights ("Subject Shares") payable in shares of Preferred Stockstock of the Company, (B) subdivide or split the outstanding Preferred StockSubject Shares, (C) combine or consolidate the outstanding Preferred Stock Subject Shares into a smaller number of shares, shares or effect a reverse stock split of the Subject Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Subject Shares (including any such reclassification reclassifica- tion in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, and in each such event, except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination split, reverse split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned received upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination split, reverse split, combination, consolidation or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In the event that:that at any time after the date of this Agreement
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless or any Associate or Affiliate of any Acquiring Person, directly or indirectly (1) shall merge into the event causing Company or any of its Subsidiaries or otherwise combine with the Company or any of its Subsidiaries and the Company or such Subsidiary shall be the continuing or surviving corporation of such merger or combination and the Common Stock shall remain outstanding and the outstanding shares thereof shall not be changed into or exchanged for stock or other securities of the Company or of any other Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereofor cash or any other property, or is an acquisition of shares of Common Stock pursuant to a tender offer (2) shall sell or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from otherwise transfer in one or more investment banking firmstransactions, assets to be (x) fair to stockholders (taking into account all factors which such members the Company or any of its Subsidiaries in exchange for 20 percent or more of the Board deem relevant) and (y) otherwise in the best interests shares of any class of capital stock of the Company or any of its Subsidiaries, and its stockholdersthe Common Stock shall remain outstanding and unchanged, or
(B) directly or indirectly, any Acquiring Person, or any Associate or Affiliate of any Acquiring Person, shall (1) at least a majority in one or more transactions, transfer any assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class of capital stock of the members Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class of capital stock of the Board Company or any of Directors who are not officers its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class of capital stock of the Company or any of its Subsidiaries or other securities exercisable for or convertible into shares of any class of capital stock of the Company or any of its Subsidiaries (other than as part of a PRO RATA distribution by the Company or such Subsidiary to all holders of Common Stock), (2) sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (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, (3) receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full-time employment as a regular employee, or fees for serving as director, at rates in accordance with the Company's (or its Subsidiaries') past practices, or (4) receive the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance provided by the Company or any of its Subsidiaries, 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, or
(C) during any 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, after reasonable inquiry and investigationor any merger or consolidation of the Company with any of its Subsidiaries or any other similar transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person or any Affiliate or Associate of such Acquiring Person) which has the effect, directly or indirectly, of increasing by more than one percent 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 owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, or
(D) any Person shall become an Acquiring Person otherwise than pursuant to a Qualified Offer, then, promptly following and in each such case, but subject to the first occurrence provisions of any Section 11(a)(ii) Event27, proper provision shall be made so that each holder of a Right (Right, except as provided below and in Section 7(e7(f), shall, on and after the later of (i) hereofthe date of the occurrence of an event described in clause (A), (B), (C) shall thereafter or (D) of this Section 11(a)(ii), or (ii) the date of the expiration of the period within which the Rights may be redeemed pursuant to Section 23 (as the same may have been amended as provided in Section 26), have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred StockPrice, such number of shares of Common Stock as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of Units for which a Right is then exercisable and dividing that product by (y) 50 percent of the current market price per share of Common Stock (determined in accordance with Section 11(d)) on the date of the occurrence of the relevant event listed above in clause (A), (B), (C) or (D) of this subparagraph (ii); PROVIDED, HOWEVER, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not consummate any such merger, combination, transfer or transaction referred to in any of such clauses (A), (B) and (C) unless prior thereto there shall be sufficient authorized but unissued Common Stock to permit the exercise in full of the Rights in accordance with the foregoing sentence, unless the Board of Directors has determined to issue Equivalent Stock in accordance with Section 7(a); PROVIDED, HOWEVER, that in no case may the Company consummate any such merger, combination, transfer or transaction if at the time of or immediately after such transaction there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights. In the event that the Company issues Equivalent Stock upon the exercise of any Rights pursuant to the immediately preceding paragraph, then, upon any such exercise, proper provision shall be made so that the holder of a Right (except as provided in Section 7(f)) shall have the right to receive, upon such exercise at the then current Purchase Price, such number of shares or other units of Equivalent Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock Units for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority 50 percent of the members current market price per share or other unit of the Company's Board of Directors who are not officers Equivalent Stock of the Company determine (determined on substantially the same basis as is prescribed by Section 11(d) with respect to the valuation of Common Stock) on the date of occurrence of the relevant event listed above in clause (A), (B), (C) or (D) of this subparagraph (ii). In the event that at any time the following is not permitted Company should be prohibited by the terms law, by any provision of its Certificate of Incorporation, or by any instrument or agreement or instrument to which the Company is a party on the date or by which it is bound, from issuing, or should be unable under its Certificate of this Agreement (orIncorporation to issue, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common sufficient Equivalent Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the all outstanding Rights in accordance with the foregoing subparagraph (ii) sentence, then, in lieu of this Section 11(a)issuing such Equivalent Stock upon such exercise, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise shall pay to each holder of a Right (the "Current Value"except as provided in Section 7(f)) over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment surrender of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, Right as provided herein but without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or an amount in cash have an aggregate value for each Right equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such datePurchase Price.
(b) In case the Company shall at any time after the Rights Record Date fix a record date for the issuance of rights, options rights or warrants to all holders of Preferred Common Stock or Subject Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred to subscribe for or purchase Common Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) Subject Shares or securities convertible into Preferred Common Stock or equivalent preferred stock Subject Shares at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stockCommon Stock) less than the Current Market Price current market price per share (as determined pursuant to in accordance with Section 11(d)) hereof) per share of Preferred Stock 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, of which the numerator of which shall be the total number of shares of Preferred Common Stock and Subject Shares outstanding on such record date, date plus the number of shares of Preferred Common Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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, current market price and of which the denominator of which shall be the total number of shares of Preferred Common Stock and Subject Shares outstanding on such record date, date plus the number of additional shares of Preferred Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription or purchase price may be paid by delivery of consideration part paid, in whole or all of which may be in part, 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 and shall be binding on the Rights Agent and the holders of the RightsAgent. Shares of Preferred Stock 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 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 at any time after the Rights Record Date fix a record date for the making of a distribution to all holders on the shares of Preferred Common Stock or the Subject Shares, whether by way of a dividend, distribution, reclassification of stock, recapitalization, reorganization or partial liquidation of the Company or otherwise (and including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) ), of subscription rights or warrants (excluding those referred to in Section 11(b)), evidences of indebtedness, cash (indebtedness or other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than (i) regular periodic cash dividends, (ii) a dividend payable in Preferred Common Stock or (iii) a distribution which is part of or is made in connection with a transaction to which Section 11(a)(ii) or Section 13 applies), 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, of which the numerator shall be the current market price per share of Common Stock (determined in accordance with Section 11(d)) on such record date, less the fair market value applicable to one share of Common Stock (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 such assets or evidences of indebtedness or of such subscription rights or warrants so to be distributed, and of which the denominator shall be such current market price per share of Common Stock. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, but including any dividendthe 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.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, howeverHOWEVER, that in the event that the Current Market Price current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current Market Price" current market price shall be properly appropriately adjusted to take into account reflect the current market price per share of Common Stock in connection with 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 NYSE New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the NYSENew 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 shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Dealers, Inc., Automated Quotation System ("NASDAQ") or such other system then in use, or, if ). If on any such date, date the shares of Common Stock are not quoted by any suchsuch organization, the fair market value of such shares on such date as determined in good faith by the Board of Directors of the issuer of such Common Stock shall be used. Any such determination of current market price shall be described in a statement filed with the Rights Agent. For the purpose of any computation hereunder, the "current market price" of a Unit shall be deemed to be equal to the current market price per share of Common Stock, and the "current market price" of a Subject Share shall be deemed to be equal to the current market price per share of Common Stock divided by the number of Subject Shares which comprise a Unit.
Appears in 1 contract
Samples: Rights Agreement (Talbert Medical Management Holdings Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares or other property covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Common Shares payable in shares of Preferred StockCommon Shares, (B) subdivide the outstanding Preferred StockCommon Shares, (C) combine the outstanding Preferred Stock Common Shares (by reverse stock split or otherwise) into a smaller number of sharesCommon Shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, in each such event, except as otherwise provided in this Section 11(a) and Section 7(e) hereofof this Agreement: (1) each of the Rights outstanding at the time of the record date for such dividend or the effective date of such subdivision, combination or reclassification shall be proportionately adjusted to that number of Rights (calculated to the nearest one ten-thousandth (1/10,000) of a Right) equal to a fraction (the "Exchange Ratio"), the numerator of which shall be the total number of Common Shares or shares of capital stock issued in such dividend, subdivision, combination or reclassification of the Common Shares outstanding immediately following such dividend, subdivision, combination or reclassification and the denominator of which shall be the total number of Common Shares outstanding immediately prior to such time, and the number of Rights that shall thereafter be issued with respect to each Common Share or share of such other capital stock that shall become outstanding thereafter prior to the Distribution Date shall be equal to the total number of outstanding Rights immediately after such event (as adjusted pursuant to this clause (1)) divided by the total number of outstanding Common Shares or shares of such other capital stock immediately after such event (subject to further adjustment pursuant to the provisions of this Agreement); (2) the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification shall be adjusted so that the Purchase Price thereafter shall equal the result obtained by dividing the Purchase Price in effect immediately prior to such time by the Exchange Ratio; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of such Right; and (3) the number of Preferred Shares or shares of such other capital stock issuable upon the exercise of each Right shall remain unchanged immediately after such event, but, in the event of a reclassification, and the number and kind of shares issuable upon the exercise of each Right immediately after such reclassification shall be adjusted to be the kind of shares of Preferred Stock or such other capital stockstock issued in such reclassification, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of rather than Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassificationShares. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereofof this Agreement, 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) hereofof this Agreement.
(ii) In Subject to Section 24 of this Agreement, in the event that:
(A) any Persona Triggering Event shall have occurred, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, then promptly following the first occurrence of any Section 11(a)(ii) such Triggering Event, proper provision shall be made so that each holder of a Right (Right, except as provided below and in Section 7(e) hereof) of this Agreement, shall thereafter have the right to receivereceive for each Right, upon exercise thereof at the then current Purchase Price in accordance with the terms of this AgreementAgreement and payment of the then-current Total Exercise Price, in lieu of a number of one one-thousandths of a share of Preferred StockShare, such number of shares of Common Stock Shares of the Company as shall equal the result obtained by (x) multiplying the then then-current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock Share for which one a Right was exercisable (or would have been exercisable if the Distribution Date had occurred) immediately prior to the first occurrence of a Section 11(a)(ii) Triggering Event, and (y) dividing that product by 50% of the current per share market price (which, following determined pursuant to Section 11(d) of this Agreement) for Common Shares on the date of occurrence of the Triggering Event (such first occurrence, shall thereafter be number of shares being hereinafter referred to as the "Purchase Price" for each Right and for all purposes of Adjustment Shares"). The Company shall notify the Rights Agent when this Agreement)Section 11(a)(ii) applies.
(iii) Unless at least a majority In lieu of the members issuing Common Shares in accordance with Section 11(a)(ii) of the Company's Board of Directors who are not officers of this Agreement, the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (ormay, if the Board of Directors so determinesdetermines that such action is necessary or appropriate and not contrary to the interest of holders of Rights (and, after the date of this Agreement), then in the event that the number of shares of Common Stock Shares which are authorized by the Company's articles or certificate Articles of incorporation Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with Rights, or if any necessary regulatory approval for such issuance has not been obtained by the foregoing subparagraph (ii) of this Section 11(a)Company, the Company shall: ): (A) determine the excess of (1) the value of the Adjustment Common Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as excess, the "Spread"), ) and (B) with respect to each Right, make adequate provision to substitute for the Adjustment such Common Shares, upon payment exercise of the applicable Purchase PriceRights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, shares or units of shares, shares of any series of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock Shares (such shares or units of preferred stock being referred to shares of Preferred Stock are herein as called "common stock equivalents")), except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, (5) other assets, assets or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors (which determination shall be described in a statement filed with the Rights Agent and shall be conclusive and binding on the Rights Agent, the holders of the CompanyRights and all other Persons); provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Triggering Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock Shares (to the extent available) ), except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock Shares could be authorized for issuance upon exercise in full of the RightsRights or that any necessary regulatory approval for such issuance will be obtained, the 30 thirty (30) day period set forth above may be extended to the extent necessarynecessary (with prompt written notice of such extension to the Rights Agent), but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereofof this Agreement, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares shares, to take any action to obtain any required regulatory approval and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating stating, and notify the Rights Agent in writing, that the exercisability of the Rights has been temporarily suspended, as well as a public announcement and written notification to the Rights Agent at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock Shares shall be the Current Market Price current per share market price (as determined pursuant to Section 11(d) hereofof this Agreement) per share of the Common Stock Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock Shares on such date.
(b) In case the Company shall shall, at any time after the date of this Agreement, fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock Common Shares or of any class or series of Equivalent Shares entitling them to subscribe for or purchase such holders (for a period expiring within 45 forty-five (45) calendar days after such record date) Preferred Stock (to subscribe for or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) purchase Common Shares or Equivalent Shares or securities convertible into Preferred Stock Common Shares or equivalent preferred stock Equivalent Shares at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock Common Shares or equivalent preferred stockEquivalent Shares) less than the Current Market Price then current per share market price (as determined pursuant to defined in Section 11(d) hereof) per share of Preferred Stock the Common Shares or Equivalent Shares on such record date, then, in each such case, 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 shares of Preferred Stock Common Shares and Equivalent Shares (if any) outstanding on such record date, plus the number of shares of Preferred Stock Common Shares or Equivalent Shares, as the case may be, which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock Common Shares or Equivalent Shares, as the case may be, 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 Pricecurrent per share market price, and the denominator of which shall be the number of shares of Preferred Stock Common Shares and Equivalent Shares (if any) outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock Common Shares or Equivalent Shares, as the case may be, to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid by delivery of in a consideration part or all of which may 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 CompanyDirectors, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive and binding on the Rights Agent and Agent, the holders of the RightsRights and all other Persons. Common Shares of Preferred Stock and Equivalent Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights 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 shall, at any time after the date of this Agreement, fix a record date for the making of a distribution to all holders of Preferred Stock the Common Shares or of any class or series of Equivalent Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash indebtedness or assets (other than a regular quarterly cash dividend out of the earnings dividend, if any, or retained earnings of the Company), assets (other than a dividend payable in Preferred StockCommon Shares) or subscription rights, but including any dividendoptions or warrants (excluding those referred to in Section 11(b) hereof), then, in each such case, 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 per share market price (as determined pursuant to Section 11(d) of this Agreement) of a Common Share or an Equivalent Share on such record date, less the fair market value (as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive and binding on the Rights Agent, the holders of the Rights and all other Persons) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a Common Share or Equivalent Share, as the case may be, and the denominator of which shall be such current per share market price of a Common Share or Equivalent Share on such record date. 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 be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereofof this Agreement, the "Current Market Price" current per share market price" of Common Stock any security (a "Security" for the purpose of this Section 11(d)) on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Security for the 30 thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereofof this Agreement, the "Current Market Price" current per share market price" of Common Stock any Security on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Security for the 10 ten (10) consecutive Trading Days immediately following prior to but not including such date; provided, however, that in the event that the Current Market Price current per share market price of the Common Stock Security is determined during a period following the announcement by the issuer of such Common Stock Security of (Ai) a dividend or distribution on Common Stock such Security payable in shares of Common Stock such Security or securities convertible into such shares of Common Stock (other than the Rights), or (Bii) any subdivision, combination or reclassification of such Common StockSecurity, and prior to the expiration of the requisite 30 thirty (30) Trading Day or 10 ten (10) 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" current per share 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchbe
Appears in 1 contract
Samples: Rights Agreement (N2h2 Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares, or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Preferred Common Stock payable in shares of Preferred Common Stock, (B) subdivide subdivides the outstanding Preferred Common Stock, (C) combine combines the outstanding Preferred Common Stock into a smaller number of shares, or (D) issue issues any shares of its capital stock in a reclassification of the Preferred Common Stock (including including, without limitation, 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) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Common Stock or other capital stock, as the case may be, issuable on such date, shall will be proportionately adjusted so that the holder of any Right exercised after such time shall will be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Common Stock or other capital stock, as the case may be, whichthat, if such Right had been exercised immediately prior to such date and at a time when the Preferred Common Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, or reclassification. If an event occurs which that would require an adjustment under both this Section 11(a)(i1 l(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall will be in addition to, and shall will be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) In the event that:
(A) that any Person, shallalone or together with its Affiliates and Associates, at any time after the Rights Dividend Declaration Date, be or become becomes an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, proper provision will be made so that each Right holder of a Right (except as provided below and in Section 7(e)) hereof) shall will thereafter have the right to receive, upon exercise thereof of such Right at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall Rights Shares equal to the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock Rights Shares for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product by 50% of the Current Market Price (whichdefined in Section 11(d)) per share of Common Stock on the date such Person became an Acquiring Person (such number of Rights Shares, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this AgreementAdjustment Shares").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which that are authorized by the Company's articles or certificate of incorporation but not outstanding issued, or reserved for issuance for purposes other than upon exercise of the Rights issued but not outstanding, are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a11(a)(ii), the Company shall: will, upon the exercise of a Right and payment of the applicable Purchase Price, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, Shares (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company stock), that a Requisite Majority has deemed to have substantially essentially the same value rights, privileges and preferences as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalentsCommon Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been conclusively determined by the Board of Directors of the Company a Requisite Majority based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Companya Requisite Majority; provided, however, that if the Company shall has not have made adequate provision to deliver value pursuant to clause (Bb) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date")Event, then the Company shall will be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or or cash have an aggregate value equal to the Spread. The term "Spread" means the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger DateTriggering Event, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such 30-day period, as it may be extended, being the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need is to be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x1) shall will provide, subject to Section 7(e) hereof), that such action shall will apply uniformly to all outstanding Rights, and (y2) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or required shareholder approval or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall will issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer remains in effect. For purposes of this Section 11(a)(iii), the value Current Value of a share of Common Stock shall each Adjustment Share will be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following on the announcement by effective date of the issuer Section 11(a)(ii) Event and the per share or per unit value of such any Common Stock Equivalent will be deemed to equal the Current Market Price per share of (A) a dividend or distribution on the Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such.
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF COMMON SHARES OR NUMBER OF RIGHTS.
(a) The Purchase Price, the number and kind of shares Common Shares or other securities covered by each Right Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement Record Date (A) declare a dividend on the Preferred Stock Common Shares payable in shares of Preferred StockCommon Shares, (B) subdivide the outstanding Preferred StockCommon Shares into a greater number of such shares, (C) combine the outstanding Preferred Stock Common Shares into a smaller number of such shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Common 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) hereof), the Purchase Price in effect for Rights at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receiveshall, upon payment of the Purchase Price then in effect, be entitled to receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Common Shares transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one such Right be less than the per share par value of the Common Shares. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In Subject to Section 24 of this Rights Agreement, in the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become Person becomes an Acquiring Person, unless then the Purchase Price for each Common Share issuable upon exercise of Rights shall be reduced to an amount equal to 50% of the current market price per share of such Common Share (determined pursuant to Section 11(d)) on the Shares Acquisition Date. Notwithstanding the above, if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and no adjustment shall be made pursuant to this Section 11 (a)(ii). From and after the occurrence of the event causing described above, any Rights that are or were acquired or beneficially owned by any Acquiring Person (or any Associate or Affiliate of such Person Acquiring Person) shall be void and any holder of such Rights shall thereafter have no right to have become exercise such Rights under any provision of this Rights Agreement. No Right Certificate shall be issued pursuant to Section 3 that represents Rights beneficially owned by an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock whose Rights would be void pursuant to a tender offer the preceding sentence or an exchange offer for all outstanding shares of Common Stock any Associate or Affiliate thereof; no Right Certificate shall be issued at a price and on terms determined by at least a majority of any time upon the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence transfer of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right Rights to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior or from an Acquiring Person whose Rights would be void pursuant to the first occurrence preceding sentence or any Associate or Affiliate thereof or to or from any nominee of a Section 11(a)(iisuch Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to or from an Acquiring Person (or any Associate, Affiliate or nominee of such Acquiring Person) Event, and (y) dividing that product (which, following such first occurrence, whose Rights would be void pursuant to the preceding sentence shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)canceled.
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of there shall not be sufficient Common Stock which are authorized by the Company's articles or certificate of incorporation Shares issued but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient authorized but unissued to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: , to the extent permitted by applicable law, take all such action as may be necessary to authorize additional Common Shares for issuance upon exercise of the Rights, including the calling of a meeting of shareholders; provided, however, if the Company is unable to cause the authorization of additional Common Shares then the Company, to the extent necessary and permitted by applicable law and any agreements or instruments in effect on the date hereof to which it is a party, shall, at its option (A) determine pay cash equal to twice the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the applicable Purchase Price (as adjusted pursuant to this Section 11) in lieu of issuing any such excess being referred to herein as the "Spread")Common Shares and requiring payment therefor, and or (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other issue equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate a value equal to the Current Valuemarket price of Common Shares which otherwise would have been issuable pursuant to the foregoing subparagraph (ii), where such aggregate which value has been shall be determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company whose determination shall be obligated to deliverdescribed in a statement filed with the Rights Agent, upon the surrender for exercise of or (C) distribute a Right and without requiring payment of the Purchase Price, shares combination of Common Stock (to the extent available) and thenShares, if necessary, cash, which shares cash and/or cash have an aggregate other equity securities having a value equal to the Spread. If the Board of Directors market price of the Company shall determine in good faith that it is likely that sufficient additional shares of the Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken Shares which are otherwise issuable pursuant to the first and/or second sentences of this Section 11(a)(iiiforegoing subparagraph (ii), determined in accordance with the Company preceding clause (x) shall provideB), subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability upon exercise of the Rights until the expiration of the Substitution 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 sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such daterelated Rights.
(b) In case the Company shall fix a record date for the issuance of rightsrights (other than the Rights), options or warrants to all holders of Preferred Stock Common Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (to subscribe for or shares having the same rightspurchase Common Shares, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock Common Shares at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stockCommon Shares) less than the Current Market Price then current per share market price (as determined pursuant to defined in Section 11(d)) hereof) per share of Preferred Stock the Common Shares 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 shares of Preferred Stock Common Shares outstanding on such record date, date plus the number of shares of Preferred Stock Common Shares which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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, current market price and the denominator of which shall be he the number of shares of Preferred Stock Common Shares outstanding on such record date, date plus the number of additional shares of Preferred Stock and/or equivalent preferred stock Common Shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the per share par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid by delivery of in consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the RightsAgent. Common Shares of Preferred Stock 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 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 Preferred Stock Common Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) ), of evidences of indebtedness, cash indebtedness or assets (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company)dividend, assets (other than a dividend payable in Preferred StockCommon Shares or other distribution referred to in Section 11(a) hereof) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), but including any dividendthe Purchase Price 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 then current per share market price of the Common Shares 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 and shall be binding on the Rights Agent) of the portion of such assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one Common Share and the denominator of which shall be such current per share market price of the Common Shares; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the per share par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" current per share market price" of a Common Stock Share on any date shall be deemed to be the average of the daily closing prices per share of such a Common Stock Share for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price current per share market price of the a Common Stock Share is determined during a period following the announcement by the issuer of such Common Stock Company of (A) a dividend or distribution on the Common Stock Shares, payable in shares of Common Stock Shares or securities convertible into shares of Common Stock (other than the Rights)Shares, or (B) any subdivision, combination or reclassification of such the Common StockShares, and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current Market Price" current per share market price shall be properly appropriately adjusted to take into account ex-dividend tradingreflect the current market price per share of a Common Share. 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 NYSE New York Stock Exchange or, if the shares of Common Stock Shares are not listed or admitted to trading on the NYSENew 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 shares of Common Stock Shares are listed or admitted to trading or, if the shares of Common Stock 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 Dealers, Inc. Automated Quotation Quotations System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of date Common Stock Shares are not quoted by any suchsuch organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in Common Shares, selected by the Board of Directors of the Company. If on any such date no market-maker is making a market in Common Shares, the fair value of Common Shares on such date as determined in good faith by the Board of Directors of the Company shall be used, whose determination shall be described in a statement filed with the Rights Agent. The term "Trading Day" shall mean a day on which the principal national securities exchange on which Common Shares are listed or admitted to trading is open for the transaction of business or, if Common Shares are not listed or admitted to trading on any national securities exchange, a Business Day. If Common Shares are not publicly held or so listed or traded, "current per share market price" shall mean the fair value per share as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent.
Appears in 1 contract
Samples: Shareholder Rights Agreement (Sensory Science Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred StockShares, (C) combine the outstanding Preferred Stock Shares into a smaller number of shares, Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing continuing, surviving or surviving acquiring corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock issuable on such datedate pursuant to the exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effecteffect (and any applicable transfer taxes), the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Shares transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In Subject to Section 24 of this Agreement, in the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or Person shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to proper provision shall be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, made so that each holder of a Right (except as provided below and in Right, subject to Section 7(e) hereof) 11(a)(iii), shall thereafter have the a right to receive, upon exercise thereof at by payment of the amount equal to the product of the number of one one-hundredths of a Preferred Share which would otherwise be issuable upon exercise of a Right and the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred StockShares, such number of shares of Common Stock Shares of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock Share for which one a Right was is exercisable immediately prior to the first occurrence of a the Section 11(a)(ii) Event, Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority by 50% of the members current per share market price of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument Common Shares (determined pursuant to which the Company is a party Section 11(d)) on the date of this Agreement (or, if the Board of Directors so determines, such occurrence. From and after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event or a Section 13 Event, any Rights that are beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) or were beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) after the Acquiring Person became an Acquiring Person shall become null and (y) the date on which the Company's right void without any further action and no holder of redemption such Rights shall thereafter have any rights to exercise such Rights or any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. No Right Certificate shall be issued pursuant to Section 23(a) expires (3 that represents Rights that would be void pursuant to the later preceding sentence; no Right Certificate shall be issued at any time upon the transfer of (x) any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or to any Associate or Affiliate of such an Acquiring Person or to any nominee of such Acquiring Person, Associate or Affiliate; and (y) being referred any Right Certificate delivered to herein as the "Rights Agent for transfer to an Acquiring Person or any Associate or Affiliate of such an Acquiring Person whose Rights would be void pursuant to the preceding sentence shall be canceled. The Company shall use all reasonable efforts to insure that the provisions of this Section 11(a)(ii) Trigger are complied with, but shall have no liability to any holder of a Right Certificate or other Person as a result of its failure in good faith to make any determinations with respect to an Acquiring Person or its Affiliates or Associates.
(iii) If, on the date of the occurrence of a Section 11 (a)(ii) Event (the "Adjustment Date"), the Company does not have sufficient issued but not outstanding or reserved or authorized, unissued and unreserved Common Shares available to permit the exercise in full of all Rights that are exercisable on the Adjustment Date for the number of Common Shares per Right provided for in Section 11(a)(ii), then the Exercise Price (as defined below) and the number of Common Shares to be delivered by the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be further adjusted as provided in this subparagraph (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iiiiii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other the number and kind of shares of capital stockstock issuable on such date, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the aggregate adjusted Purchase Price then in effecteffect necessary to exercise a Right in full, the aggregate number and kind of shares of Preferred Stock or other the number and kind of shares of capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person Subject to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price Sections 23 and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms 24 of this Agreement, in lieu the event that any Person (other than the Company, any Subsidiary of a number the Company, any employee benefit plan of one one-thousandths the Company or of any Subsidiary of the Company, or any Person or entity organized, appointed or established by the Company for or
(iii) The Company may at its option substitute for a share of Preferred Stock, such number of shares of Common Stock of the Company as shall issuable upon the exercise of Rights in accordance with the foregoing subparagraph (ii) such number or fractions of shares of Preferred Stock having an aggregate market value equal to the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths per share market price of a share of Preferred Common Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in . In the event that the number of shares of Common Stock of the Company which are is authorized by the Company's articles or certificate Amended and Restated Articles of incorporation Incorporation but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights are Rights, is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Board shall to the extent permitted by applicable law and by material agreements then in effect to which the Company shall: is a party, and subject to any limitations contained in Section 13.1-653 of the Virginia Stock Corporation Act, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment SharesIf, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date")Event, then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock of the Company could be authorized for issuance upon exercise in full of the Rights, then if the 30 Board so elects, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need is to be (and may be) taken pursuant to the first and/or second sentences preceding provisions of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such the first sentence of this Section 11(a)(iii) and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock of the Company shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock of the Company on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock of the Company on such - 18 - 22 date. The Board may, but shall not be required to, establish procedures to allocate the right to receive shares of Common Stock of the Company upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of "equivalent preferred stock stock" (or having a conversion price per shareshare of Preferred Stock, if a security convertible into Preferred Stock or equivalent preferred stockStock) less than the Current Market Price current per share market price of the Preferred Stock (as determined pursuant to defined in Section 11(d)) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 Pricecurrent market price, and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of in a consideration part or all of which may 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 CompanyBoard, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rightsconclusive for all purposes. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings Company in compliance with Section 13.1-653 of the CompanyVirginia Stock Corporation Act), assets (other than a dividend payable in Preferred Stock, but including any dividenddividend payable in stock other than Preferred Stock), or subscription rights 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
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of the Common Stock of the Company on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock of the Company for the 30 thirty (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) hereof, the "Current Market Pricecurrent market price" per share of Common Stock of the Company on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock of the Company for the 10 ten (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share current market price of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (Ai) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (Bii) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 thirty (30) Trading Day or 10 ten (10) 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 Pricecurrent market price" shall be properly appropriately 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 NYSE New York Stock Exchange or, if the shares of Common Stock of the Company are not listed or admitted to trading on the NYSENew 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 shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock of the Company 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchSecurities
Appears in 1 contract
Samples: Rights Agreement (BTG Inc /Va/)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by shares, or fractions thereof, purchasable upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Preference Stock payable in shares of Preferred Preference Stock, (B) subdivide or split the outstanding Preferred Preference Stock, (C) combine or consolidate the outstanding Preferred Preference Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Preference Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Preference Stock (or other capital stock, as the case may be, ,) issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Preference Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date (whether or not such Right was then exercisable) and at a time when the Preferred Stock transfer books for the Preference Stock (or other capital stock, as the case may be) of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination split, combination, consolidation or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event that:
(A) any Person, Person shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the CompanyCompany or any of its Subsidiaries and who are Continuing Directors, after receiving advice from one or more investment banking firms, to be (xa) at a price which is fair to the Company's stockholders and not inadequate (taking into account all factors which such members of the Board deem relevant, including, without limitation, prices which could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (yb) otherwise in the best interests of the Company and its stockholders, or
stockholders (B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation"Qualifying Offer"), then, promptly following the first occurrence of any Section 11(a)(ii) Eventsuch event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths hundredths of a share of Preferred Preference Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Preference Stock for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) EventEvent (whether or not such Right was then issued or exercisable), and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate Restated Articles of incorporation Incorporation, but which are not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are Rights, is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: Company, acting by resolution of the Board, shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of such Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, shares or units of sharesshares of preference stock, of preferred stock such as the Preference Stock, which the Board of Directors of the Company has deemed to have substantially essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Series A Preferred Stock payable in shares of Series A Preferred Stock, (B) subdivide the outstanding Series A Preferred Stock, (C) combine the outstanding Series A Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Series A Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Series A Preferred Stock or other the number and kind of shares of capital stockstock issuable on such date, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the aggregate adjusted Purchase Price then in effecteffect necessary to exercise a Right in full, the aggregate number and kind of shares of Series A Preferred Stock or other the number and kind of shares of capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Series A Preferred Stock (or other capital stock, as the case may be) transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to Sections 23 and 24 of this Agreement, in the event that:
(A) that any Person, alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is (x) a transaction set forth in Section 13(a13 Event or (y) hereof, or is an acquisition of shares of Common Stock pursuant to a cash tender offer or an exchange offer made pursuant to Section 14(d) of the Exchange Act for all outstanding shares of Common Stock (other than shares of Common Stock beneficially owned by the Person making the offer or by its Affiliates or Associates) at a price and on terms determined by at least a majority two-thirds of the members of the Board of Directors who are not officers of the CompanyBoard, after receiving advice from one or more investment banking firms, to be (xa) fair to stockholders (taking into account all factors which such members of the Board deem relevant, including, without limitation, prices which could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (yb) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority then promptly after the date of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any a Section 11(a)(ii) Event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at and payment of an amount equal to the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Series A Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Series A Preferred Stock for which one a Right was or would have been exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, whether or not such Right was then exercisable, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this AgreementAgreement except to the extent set forth in Section 13 thereof) by 50% of the current market price per share of Common Stock (determined pursuant to Section 11(d) hereof) on the date of such first occurrence (such number of shares, the "Adjustment Shares").
(iii) Unless The Company may at least its option substitute for a majority share of Common Stock issuable upon the members exercise of Rights in accordance with the Company's Board foregoing subparagraph (ii) such number or fractions of Directors who are not officers shares of Series A Preferred Stock having an aggregate market value equal to the Company determine that the following is not permitted by the terms current per share market price of any agreement or instrument to which the Company is a party on the date share of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in Common Stock. In the event that the number of shares of Common Stock which are is authorized by the Company's articles or certificate Articles of incorporation Incorporation, as amended from time to time, but not outstanding outstanding, or reserved for issuance for purposes other than upon exercise of the Rights are Rights, is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Board shall, to the extent permitted by applicable law and any material agreements or material instruments then in effect to which the Company shall: is a party, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as excess, the "Spread"), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the Adjustment Shares, upon exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock Series A Preferred Stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock Stock) (such shares of preferred stock equity securities being referred to herein as called "common stock equivalentsStock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized an investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, if the Company shall not have made adequate provision -------- ------- to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If If, upon the occurrence of a Section 11(a)(ii) Event, the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, then if the 30 Board so elects, the thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need is to be (and may be) taken pursuant to the first and/or second sentences preceding provisions of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such the first sentence of this Section 11(a)(iii) and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" Stock Equivalent shall be deemed to have the same value as the Common Stock on such date. The Board may, but shall not be required to, establish procedures to allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Series A Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Series A Preferred Stock (or shares having the same preferences, conversion or other rights, privileges voting powers, restrictions, limitations as to dividends, qualifications, and preferences terms or conditions or redemption as the shares of Series A Preferred Stock ("equivalent preferred stockEquivalent Preferred Stock")) or securities convertible into Series A Preferred Stock or equivalent preferred stock at a price per share of Series A Preferred Stock or per share of equivalent preferred stock Equivalent Preferred Stock (or having a conversion price per shareshare of Series A Preferred Stock, if a security convertible into Series A Preferred Stock or equivalent preferred stockStock) less than the Current Market Price current per share market price of the Series A Preferred Stock (as determined pursuant to defined in Section 11(d)) hereof) per share of Preferred Stock 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 shares of Series A Preferred Stock outstanding on such record date, plus the number of shares of Series A Preferred Stock which the aggregate offering price of the total number of shares of Series A Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock 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 Pricecurrent market price, and the denominator of which shall be the number of shares of Series A Preferred Stock outstanding on such record date, plus the number of additional shares of Series A Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock 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 by delivery of in a consideration part or all of which may 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 CompanyBoard, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rightsconclusive for all purposes. Shares of Series A Preferred Stock 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 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 a distribution to all holders of Series A Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Series A Preferred Stock, but including any dividenddividend payable in stock other than Series A Preferred Stock), or subscription rights 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 per share market price of the Series A Preferred Stock (as defined in Section 11(d)) on such record date, less the fair market value (as determined in good faith by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Series A Preferred Stock and the denominator of which shall be such current per share market price of the Series A Preferred Stock. Such adjustment 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.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of the Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 30 consecutive Trading Days (as such term is hereinafter defineddefined herein) immediately prior to but not including such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 ten (10) consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share current -------- ------- market price of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (Ai) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (Bii) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 thirty (30) Trading Day or 10 ten (10) 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 Pricecurrent market price" shall be properly appropriately 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 NYSE New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the NYSENew 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 shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Dealers, Inc. Automated Quotation Quotations System ("NASDAQ") or such other system then in use, or, if on any such date, date the shares of Common Stock are not quoted by any suchsuch organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the shares of Common Stock
Appears in 1 contract
Samples: Rights Agreement (HMC Merger Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred Stock, Shares or (C) combine the outstanding Preferred Stock Shares into a smaller number of shares, Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock 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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Shares transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In the event that:
(A) that any Person, shallalone or together with its Affiliates and Associates, at any time after the Rights Dividend Declaration Date, be or shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to then proper provision shall be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter shall, for a period of 60 days after the later of the occurrence of any such event or the effective date of an appropriate registration statement under the Act pursuant to Section 9 hereof, have the a right to receive, upon exercise thereof at a price equal to the then current Purchase Price Price, in accordance with the terms of this Agreement, in lieu of a such number of Common Shares (or, in the discretion of the Board of Directors, one one-thousandths hundredths of a share of Preferred Stock, such number of shares of Common Stock of the Company Share) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock Share for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product by 50% of the then current per share market price of the Company's Common Shares (which, following determined pursuant to Section 11(d) hereof) on the date of such first occurrence, shall thereafter be occurrence (such number of shares being referred to as the "Purchase Price" for each Right Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and for all purposes of no adjustment shall be made pursuant to this AgreementSection 11(a)(ii);
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of there shall not be sufficient treasury shares of or authorized but unissued (and unreserved) Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient Shares to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) and the Rights become so exercisable (and the Board has determined to make the Rights exercisable into fractions of a Preferred Share), notwithstanding any other provision of this Section 11(a)Agreement, to the Company shall: extent necessary and permitted by applicable law, each Right shall thereafter represent the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, (Ax) determine the excess a number of (1or fractions of) Common Shares (up to the value maximum number of the Adjustment Common Shares issuable upon the exercise which may permissibly be issued) and (y) one one-hundredth of a Right Preferred Share or a number of (the "Current Value"or fractions of) over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (includingor, without limitationin the discretion of the Board of Directors, shares, or units of shares, of preferred stock debt) which the Board of Directors of the Company has deemed determined to have substantially the same aggregate current market value (determined pursuant to Sections 11(d)(i) and (ii) hereof, to the extent applicable) as shares of one Common Stock Share (such shares number of, or fractions of, Preferred Shares (or other equity securities or debt of preferred stock the Company) being referred to herein as a "common capital stock equivalentsequivalent")), (4) debt securities of equal in the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board number of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyAdjustment Shares; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchif
Appears in 1 contract
Samples: Rights Agreement (Cigna Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares or other capital stock, (B) subdivide the outstanding Preferred StockShares, (C) combine the outstanding Preferred Stock Shares into a smaller number of shares, or (D) issue any shares share of its capital stock in a reclassification of the Preferred Stock 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) (ii) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock Shares or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock Shares or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Shares (or other capital stock, as the case may be) transfer books of the Company were open, he would have owned 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 this Section 11(a)(i11(a) (i) and Section 11(a)(ii11(a) (ii) hereof, the adjustment provided for in this Section 11(a)(i11(a) (i) shall be in addition to, and shall be made prior to, to any adjustment required pursuant to Section 11(a)(ii11(a) (ii) hereof.
(ii) In the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or Person shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof13 Event, or is an acquisition of shares of Common Stock Shares pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock Shares at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)the
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock Shares which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as excess, the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock Shares or other equity securities of the Company (including, without limitation, preferred shares, or units of preferred shares, of preferred stock which the Board of Directors of the Company has deemed to have be substantially economically equivalent to the same value as shares of Common Stock Shares (such shares of preferred stock being referred to herein as shares, "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.the
(b) In case the Company shall fix a record date for the issuance of rightsrights (other than the Rights), options or warrants to all holders of Preferred Stock Shares entitling them to subscribe for or purchase (for a period expiring within 45 forty-five (45) calendar days after such record date) Preferred Stock Shares, (or shares having the same rights, privileges and preferences as the shares of Preferred Stock Shares ("equivalent preferred stock")) or securities convertible into Preferred Stock Shares or equivalent preferred stock at a price per share of Preferred Stock Share or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock Shares or equivalent preferred stock) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock Share 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 shares of Preferred Stock Shares outstanding on such record date, plus the number of shares of Preferred Stock Shares which the aggregate offering price of the total number of shares of Preferred Stock Shares and/or equivalent preferred stock 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, current market price and the denominator of which shall be the number of shares of Preferred Stock Shares outstanding on such record date, plus the number of additional shares of Preferred Stock Shares and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Preferred Shares of Preferred Stock 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 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.Price
(c) In case the Company shall fix a record date for a distribution to all holders of Preferred Stock Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing con- tinuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend paid out of the earnings or retained earnings of the Company)) , assets (other than a dividend payable in Preferred StockShares, but including any dividenddividend payable in shares other than Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the current market price (as determined pursuant to Section 11(d) hereof) per Preferred Share 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 cash, assets or evidences of indebtedness to be distributed or of such subscription rights or warrants applicable to a share of Preferred Shares and the denominator of which shall be such current market price (as determined pursuant to Section 11(d) hereof) per share of preferred stock. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not made, the Purchase Price shall be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii11(a) (iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock Share on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Shares for the 30 thirty (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)(iii11(a) (iii) hereof, the "Current Market Price" current market prices per share of Common Stock Share on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Share for the 10 ten (10) consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price then current market price per share of the Common Stock Share is determined during a period following the announcement by the issuer of such Common Stock Shares of (Ai) a any dividend or distribution on such Common Stock Shares payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchCommon
Appears in 1 contract
Samples: Rights Agreement (Geon Co)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares or other property covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Common Shares payable in shares of Preferred StockCommon Shares, (B) subdivide the outstanding Preferred StockCommon Shares, (C) combine the outstanding Preferred Stock Common Shares (by reverse stock split or otherwise) into a smaller number of sharesCommon Shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, in each such event, except as otherwise provided in this Section 11(a) and Section 7(e) hereofof this Agreement: (1) each of the Rights outstanding at the time of the record date for such dividend or the effective date of such subdivision, combination or reclassification shall be proportionately adjusted to that number of Rights (calculated to the nearest one ten-thousandth (1/10,000) of a Right) equal to a fraction (the "Exchange Ratio"), the numerator of which shall be the total number of Common Shares or shares of capital stock issued in such dividend, subdivision, combination or reclassification of the Common Shares outstanding immediately following such dividend, subdivision, combination or reclassification and the denominator of which shall be the total number of Common Shares outstanding immediately prior to such time, and the number of Rights that shall thereafter be issued with respect to each Common Share or share of such other capital stock that shall become outstanding thereafter prior to the Distribution Date shall be equal to the total number of outstanding Rights immediately after such event (as adjusted pursuant to this clause (1)) divided by the total number of outstanding Common Shares or shares of such other capital stock immediately after such event (subject to further adjustment pursuant to the provisions of this Agreement); (2) the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification shall be adjusted so that the Purchase Price thereafter shall equal the result obtained by dividing the Purchase Price in effect immediately prior to such time by the Exchange Ratio; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of such Right; and (3) the number of Preferred Shares or shares of such other capital stock issuable upon the exercise of each Right shall remain unchanged immediately after such event, but, in the event of a reclassification, and the number and kind of shares issuable upon the exercise of each Right immediately after such reclassification shall be adjusted to be the kind of shares of Preferred Stock or such other capital stockstock issued in such reclassification, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of rather than Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassificationShares. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereofof this Agreement, 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) hereofof this Agreement.
(ii) In Subject to Section 24 of this Agreement, in the event that:
(A) any Persona Triggering Event shall have occurred, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, then promptly following the first occurrence of any Section 11(a)(ii) such Triggering Event, proper provision shall be made so that each holder of a Right (Right, except as provided below and in Section 7(e) hereof) of this Agreement, shall thereafter have the right to receivereceive for each Right, upon exercise thereof at the then current Purchase Price in accordance with the terms of this AgreementAgreement and payment of the then-current Total Exercise Price, in lieu of a number of one one-thousandths of a share of Preferred StockShare, such number of shares of Common Stock Shares of the Company as shall equal the result obtained by (x) multiplying the then then-current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock Share for which one a Right was exercisable (or would have been exercisable if the Distribution Date had occurred) immediately prior to the first occurrence of a Section 11(a)(ii) Triggering Event, and (y) dividing that product by 50% of the current per share market price (which, following determined pursuant to Section 11(d) of this Agreement) for Common Shares on the date of occurrence of the Triggering Event (such first occurrence, shall thereafter be number of shares being hereinafter referred to as the "Purchase Price" for each Right and for all purposes of this AgreementAdjustment Shares").
(iii) Unless at least a majority In lieu of the members issuing Common Shares in accordance with Section 11(a)(ii) of the Company's Board of Directors who are not officers of this Agreement, the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (ormay, if the Board of Directors so determinesdetermines that such action is necessary or appropriate and not contrary to the interest of holders of Rights (and, after the date of this Agreement), then in the event that the number of shares of Common Stock Shares which are authorized by the Company's articles or certificate Certificate of incorporation Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with Rights, or if any necessary regulatory approval for such issuance has not been obtained by the foregoing subparagraph (ii) of this Section 11(a)Company, the Company shall: ): (A) determine the excess of (1) the value of the Adjustment Common Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as excess, the "Spread"), ) and (B) with respect to each Right, make adequate provision to substitute for the Adjustment such Common Shares, upon payment exercise of the applicable Purchase PriceRights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, shares or units of shares, shares of preferred stock any series of Preferred Stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock Shares (such shares or units of preferred stock being referred to shares of Preferred Stock are herein as called "common stock equivalents")), except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, (5) other assets, assets or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyDirectors; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Triggering Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock Shares (to the extent available) ), except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock Shares could be authorized for issuance upon exercise in full of the RightsRights or that any necessary regulatory approval for such issuance will be obtained, the 30 thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereofof this Agreement, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares shares, to take any action to obtain any required regulatory approval and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock Shares shall be the Current Market Price current per share market price (as determined pursuant to Section 11(d) hereofof this Agreement) per share of the Common Stock Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock Shares on such date.
(b) In case the Company shall shall, at any time after the date of this Agreement, fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock Common Shares or of any class or series of Equivalent Shares entitling them to subscribe for or purchase such holders (for a period expiring within 45 forty-five (45) calendar days after such record date) Preferred Stock (to subscribe for or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) purchase Common Shares or Equivalent Shares or securities convertible into Preferred Stock Common Shares or equivalent preferred stock Equivalent Shares at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock Common Shares or equivalent preferred stockEquivalent Shares) less than the Current Market Price then current per share market price of the Common Shares or Equivalent Shares (as determined pursuant to defined in Section 11(d)) hereof) per share of Preferred Stock on such record date, then, in each such case, 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 shares of Preferred Stock Common Shares and Equivalent Shares (if any) outstanding on such record date, plus the number of shares of Preferred Stock Common Shares or Equivalent Shares, as the case may be, which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock Common Shares or Equivalent Shares, as the case may be, 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 Pricecurrent market price, and the denominator of which shall be the number of shares of Preferred Stock Common Shares and Equivalent Shares (if any) outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock Common Shares or Equivalent Shares, as the case may be, to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid by delivery of in a consideration part or all of which may 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 CompanyDirectors, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Common Shares of Preferred Stock and Equivalent Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights 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 shall, at any time after the date of this Agreement, fix a record date for the making of a distribution to all holders of Preferred Stock the Common Shares or of any class or series of Equivalent Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash indebtedness or assets (other than a regular quarterly cash dividend out of the earnings dividend, if any, or retained earnings of the Company), assets (other than a dividend payable in Preferred StockCommon Shares) or subscription rights, but including any dividendoptions or warrants (excluding those referred to in Section 11(b)), then, in each such case, 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 (as determined pursuant to Section 11(d) of this Agreement) of a Common Share or an Equivalent Share on such record date, less the fair market value (as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a Common Share or Equivalent Share, as the case may be, and the denominator of which shall be such current market price (as determined pursuant to Section 11(d) of this Agreement) of a Common Share or Equivalent Share on such record date. 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 be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereofof this Agreement, the "Current Market Price" current per share market price" of Common Stock any security (a "Security" for the purpose of this Section 11(d)) on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Security for the 30 thirty (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) hereofof this Agreement, the "Current Market Price" current per share market price" of Common Stock any Security on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Security for the 10 ten (10) consecutive Trading Days immediately following prior to such date; provided, however, that in the event that the Current Market Price current per share market price of the Common Stock Security is determined during a period following the announcement by the issuer of such Common Stock Security of (Ai) a dividend or distribution on Common Stock such Security payable in shares of Common Stock such Security or securities convertible into such shares of Common Stock (other than the Rights), or (Bii) any subdivision, combination or reclassification of such Common StockSecurity, and prior to the expiration of the requisite 30 thirty (30) Trading Day or 10 ten (10) 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" current per share market price shall be properly appropriately adjusted to take into account ex-dividend tradingreflect the current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchasked
Appears in 1 contract
Samples: Preferred Shares Rights Agreement (Celebrate Express, Inc.)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF CLASS A RIGHTS. The Purchase Price, the number and kind of shares covered by each Class A Right and the number of Class A Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Series A Preferred Stock Shares payable in shares of Series A Preferred StockShares, (B) subdivide the outstanding Series A Preferred StockShares, (C) combine the outstanding Series A Preferred Stock Shares into a smaller number of shares, Series A Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Series A Preferred Stock Shares (including any such reclassification in connection with a consolidation consolidation, merger or merger statutory share exchange in which the Company is the continuing continuing, surviving or surviving acquiring corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock issuable on such datedate pursuant to the exercise of the Class A Rights, shall be proportionately adjusted so that the holder of any Class A Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effecteffect (and any applicable transfer taxes), the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Class A Right had been exercised immediately prior to such date and at a time when the Series A Preferred Stock Shares transfer books of the Company were open, he such holder would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In Subject to Section 24 of this Agreement, in the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have shall become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock (other than pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event13 Event occurring after the Distribution Date or within 15 days prior thereto), proper provision shall be made so that each holder of a Right (except as provided below and in Class A Right, subject to Section 7(e) hereof) 11(a)(iii), shall thereafter have the a right to receive, upon exercise thereof at by payment of the amount equal to the product of the number of one one-hundredths of a Series A Preferred Share which would otherwise be issuable upon exercise of a Class A Right and the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Series A Preferred StockShares, such number of shares of Common Stock Class A Shares of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Series A Preferred Stock Share for which one a Class A Right was is exercisable immediately prior to the occurrence of the Section 11(a)(ii) Event and (y) dividing that product by 50% of the then current per share market price of the Company's Class A Shares (determined pursuant to Section 11(d) hereof) on the date of such occurrence. From and after the first occurrence of a Section 11(a)(ii) Event or a Section 13 Event, any Class A Rights that are beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) or were beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) after the Acquiring Person became an Acquiring Person shall become null and (y) dividing that product (which, following void without any further action and no holder of such first occurrence, Class A Rights shall thereafter be referred have any rights to as the "Purchase Price" for each Right and for all purposes exercise such Class A Rights or any other rights whatsoever with respect to such Class A Rights, whether under any provision of this Agreement)Agreement or otherwise. No Class A Right Certificate shall be issued pursuant to Section 3 that represents Class A Rights that would be void pursuant to the preceding sentence; no Class A Right Certificate shall be issued at any time upon the transfer of any Class A Rights to or from an Acquiring Person whose Class A Rights would be void pursuant to the preceding sentence or any Associate or Affiliate of such an Acquiring Person or any nominee of such Acquiring Person, Associate or Affiliate; and any Class A Right Certificate delivered to the Rights Agent for transfer to or from an Acquiring Person or any Associate or Affiliate of such Acquiring Person whose Class A Rights would be void pursuant to the preceding sentence shall be canceled. The Company shall use all reasonable efforts to insure that the provisions of this Section 11(a)(ii) are complied with, but shall have no liability to any holder of a Class A Right Certificate or other Person as a result of its failure in good faith to make any determinations with respect to an Acquiring Person or its Affiliates or Associates.
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party (A) If, on the date of this Agreement the occurrence of a Section 11(a)(ii) Event (or, if the Board of Directors so determines, after the date of this Agreement"Adjustment Date"), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but Company does not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not have sufficient authorized, unissued and unreserved Class A Shares available to permit the exercise in full of all Class A Rights that are exercisable on the Rights Adjustment Date for the number of Class A Shares per Class A Right provided for in accordance with the foregoing subparagraph (ii) of this Section 11(a11(a)(ii), the Company shall: then, in lieu of issuing Class A Shares (Ain whole or in part) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (Class A Rights, the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment SharesCompany may issue, upon payment the exercise of the applicable Purchase PriceClass A Rights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units or fractions of shares, of Class B Shares or preferred stock stock) which the Board of Directors of the Company has deemed determined to have substantially the same value value, voting rights and other rights as shares of Common Stock Class A Shares (such shares of preferred stock being referred to equity securities are herein as called "common stock Class A share equivalents")), . To the extent that such Class A share equivalents (4or fractions thereof) debt securities are substituted for Class A Shares upon exercise of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days Class A Rights following the later of (x) the first occurrence of a Section 11(a)(ii) Event and Event, they shall be substituted on a pro-rata basis with respect to all Class A Rights (yother than Class A Rights that are beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) or were beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) after the date on which the Company's right of redemption Acquiring Person became an Acquiring Person that shall have become void pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"hereof), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Samples: Class a Share Rights Agreement (Rural Cellular Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall shall, at any time after the date of this Agreement Agreement, (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred StockShares into a greater number of shares, (C) combine the outstanding Preferred Stock Shares into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock 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 in Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of Preferred Shares or shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of Preferred Shares or shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company for the Preferred Shares were open, he would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to Sections 11(a)(iii) and 25 hereof, in the event that:
(A) that any Person, shall, at any time after the Rights Dividend Declaration Date, be or Person shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to then proper provision shall be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, made so that each holder of a Right (Right, except as provided below and in Section 7(e) hereof) , shall thereafter have the a right to receive, upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement, Agreement and in lieu of a number of one one-thousandths of a share of Preferred StockShares, such number of shares of Common Stock of the Company Shares as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock Share for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product by 50% of the current market price (which, following determined pursuant to Section 11(d)(i) hereof) per Common Share on the date such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)Person became an Acquiring Person.
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument Subject to which the Company is a party on the date of this Agreement (orSection 25 hereof, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock Shares which are authorized by the Company's articles or certificate Certificate of incorporation Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise Rights shall not be exercisable for Common Shares, but proper provision shall be made so that each holder of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction except as provided in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.Section
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock Shares (or shares having the same rights, privileges and preferences as the shares of Preferred Stock Shares ("equivalent preferred stockshares")) or securities convertible into Preferred Stock Shares or equivalent preferred stock shares at a price per share of Preferred Stock Share or per share of equivalent preferred stock share (or having a conversion price per share, if a security convertible into Preferred Stock Shares or equivalent preferred stockshares) less than the Current Market Price current market price (as determined pursuant to Section 11(d11(d)(ii) hereof) per share of Preferred Stock Share 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 shares of Preferred Stock Shares outstanding on such record date, plus the number of shares of Preferred Stock Shares which the aggregate offering price of the total number of shares of Preferred Stock Shares so to be offered and/or equivalent preferred stock 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, current market price and the denominator of which shall be the number of shares of Preferred Stock Shares outstanding on such record date, plus the number of additional shares of Preferred Stock Shares and/or equivalent preferred stock 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 by delivery of in a consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rightsconclusive for all purposes. Preferred Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Companydividend), assets assets, stock (other than a dividend payable in Preferred StockShares) or subscription rights, but including any dividendoptions or warrants (excluding those referred to in or excluded pursuant to Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the current market price (as determined pursuant to Section 11(d)(ii) hereof) per one one-hundredth of a Preferred Share 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 and shall be conclusive for all purposes) of the portion of the cash, assets, stock or evidences of indebtedness so to be distributed or of such subscription rights, options or warrants applicable to one one-hundredth of a Preferred Share and the denominator of which shall be such current market price (as determined pursuant to Section 11(d)(ii) hereof) per one one-hundredth of a Preferred 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.
(i) For the purpose purposes of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock Share on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Share for the 30 consecutive Trading Days (as such term is hereinafter defineddefined below) immediately prior to such date; PROVIDED, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, howeverHOWEVER, that in the event that the Current Market Price current market price per share of the Common Stock Share is determined during a period following the announcement by the issuer of such Common Stock Shares of (A) a dividend or distribution on such Common Stock Shares payable in shares of such Common Stock Shares or securities convertible into shares of such Common Stock Shares (other than the Rights), ) or (B) any subdivision, combination or reclassification of such Common Stock, Shares and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current Market Pricecurrent market price" shall be properly appropriately 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 NYSE New York Stock Exchange or, if the shares of Common Stock Shares are not listed or admitted to trading on the NYSENew 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 shares of Common Stock Shares are listed or admitted to trading or, if the shares of Common Stock Shares are not listed or admitted to trading on any national securities exchange, the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the NASDAQ NMS or, if the Common Shares are not listed or admitted to trading on the NASDAQ NMS, 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 Automated Quotation System ("NASDAQ") NASDAQ or such other system then in use, or, if on any such date, date the shares of Common Stock Shares are not quoted by any suchsuch 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 and shall be conclusive for all purposes. 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. If the Common Shares are not publicly held or not 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.
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares or other securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare and pay a dividend on the Preferred Stock shares which are subject to the Rights ("Subject Shares") payable in shares of Preferred Stockstock of the Company, (B) subdivide or split the outstanding Preferred StockSubject Shares, (C) combine or consolidate the outstanding Preferred Stock Subject Shares into a smaller number of shares, shares or effect a reverse stock split of the Subject Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Subject Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, and in each such event, except as otherwise provided in this Section 11(a) and Section 7(e) hereof), 13 17 the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination split, reverse split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned received upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination split, reverse split, combination, consolidation or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In the event that:that at any time after the date of this Agreement
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless or any Associate or Affiliate of any Acquiring Person, directly or indirectly (1) shall merge into the event causing Company or any of its Subsidiaries or otherwise combine with the Company or any of its Subsidiaries and the Company or such Subsidiary shall be the continuing or surviving corporation of such merger or combination and the Common Stock shall remain outstanding and the outstanding shares thereof shall not be changed into or exchanged for stock or other securities of the Company or of any other Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereofor cash or any other property, or is an acquisition of shares of Common Stock pursuant to a tender offer (2) shall sell or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from otherwise transfer in one or more investment banking firmstransactions, assets to be (x) fair to stockholders (taking into account all factors which such members the Company or any of its Subsidiaries in exchange for 25 percent or more of the Board deem relevant) and (y) otherwise in the best interests shares of any class of capital stock of the Company or any of its Subsidiaries, and its stockholdersthe Common Stock shall remain outstanding and unchanged, or
(B) directly or indirectly, any Acquiring Person, or any Associate or Affiliate of any Acquiring Person, shall (1) at least a majority in one or more transactions, transfer any assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class of capital stock of the members Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any 14 18 class of capital stock of the Board Company or any of Directors who are not officers its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class of capital stock of the Company or any of its Subsidiaries or other securities exercisable for or convertible into shares of any class of capital stock of the Company or any of its Subsidiaries (other than as part of a PRO RATA distribution by the Company or such Subsidiary to all holders of Common Stock), (2) sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (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, (3) receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full-time employment as a regular employee, or fees for serving as director, at rates in accordance with the Company's (or its Subsidiaries') past practices, or (4) receive the benefit, directly or indirectly (except proportionately as a shareholder), of any loans, advances, guarantees, pledges or other financial assistance provided by the Company or any of its Subsidiaries, 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, or
(C) during any 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, after reasonable inquiry and investigationor any merger or consolidation of the Company with any of its Subsidiaries or any other similar transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person or any Affiliate or Associate of such Acquiring Person) which has the effect, directly or indirectly, of increasing by more than one percent 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 owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, or
(D) any Person shall become an Acquiring Person otherwise than pursuant to a Qualified Offer, then, promptly following and in each such case, but subject to the first occurrence provisions of any Section 11(a)(ii) Event27, proper provision shall be made so that each holder of a Right (Right, except as provided below and in Section 7(e7(f), shall, on and after the later of (I) hereofthe date of the occurrence of an event described in clause (A), (B), (C) shall thereafter or (D) of this Section 11(a)(ii), or (II) the date of the expiration of the period within which the Rights may be redeemed pursuant to Section 23 (as the same 15 19 may have been amended as provided in Section 26), have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred StockPrice, such number of shares of Common Stock as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of Units for which a Right is then exercisable and dividing that product by (y) 50 percent of the current market price per share of Common Stock (determined in accordance with Section 11(d)) on the date of the occurrence of the relevant event listed above in clause (A), (B), (C) or (D) of this subparagraph (ii); PROVIDED, HOWEVER, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not consummate any such merger, combination, transfer or transaction referred to in any of such clauses (A), (B) and (C) unless prior thereto there shall be sufficient authorized but unissued Common Stock to permit the exercise in full of the Rights in accordance with the foregoing sentence, unless the Board of Directors has determined to issue Equivalent Stock in accordance with Section 7(a); PROVIDED, HOWEVER, that in no case may the Company consummate any such merger, combination, transfer or transaction if at the time of or immediately after such transaction there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights. In the event that the Company issues Equivalent Stock upon the exercise of any Rights pursuant to the immediately preceding paragraph, then, upon any such exercise, proper provision shall be made so that the holder of a Right (except as provided in Section 7(f)) shall have the right to receive, upon such exercise at the then current Purchase Price, such number of shares or other units of Equivalent Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock Units for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority 50 percent of the members current market price per share or other unit of the Company's Board of Directors who are not officers Equivalent Stock of the Company determine (determined on substantially the same basis as is prescribed by Section 11(d) with respect to the valuation of Common Stock) on the date of occurrence of the relevant event listed above in clause (A), (B), (C) or (D) of this subparagraph (ii). In the event that at any time the following is not permitted Company should be prohibited by the terms law, by any provision of its Articles of Incorporation, or by any instrument or agreement or instrument to which the Company is a party on the date or by which it is bound, from issuing, or should be unable under its Articles of this Agreement (orIncorporation to issue, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common sufficient Equivalent Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the all outstanding Rights in accordance with the foregoing subparagraph (ii) sentence, then, in lieu of this Section 11(a)issuing such Equivalent Stock upon such exercise, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise shall pay to each holder of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein except as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction provided in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock"7(f)) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchupon
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.:
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(ithis
(a) (i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event that:
(A) any Person, shallalone or together with its Affiliates and Associates, at any time after the Rights Dividend Declaration Date, be or shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to then proper provision shall be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall, for a period of 60 days after the later of (i) the occurrence of any such event or (ii) the effective date of an appropriate registration statement under the Act pursuant to Section 9 hereof, have a right to receive, upon exercise thereof at a price equal to the then current Purchase Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company (or, in the discretion of the Board of Directors, one two-hundredths of a share of Preferred Stock) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one two-hundredths of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and (y) dividing that product by 50% of the then current per share market price of the Company's Common Stock (determined pursuant to Section 11(d) hereof) on the date of such first occurrence (such number of shares being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that there shall not be sufficient treasury shares or authorized but unissued (and unreserved) shares of Common Stock to permit the exercise in full of the Rights in accordance with the foregoing Section 11(a)(ii) and the Rights become so exercisable (and the Board has determined to make the Rights exercisable into fractions of a share of preferred stock), notwithstanding any other provision of this Agreement, to the extent necessary and permitted by applicable law, each Right shall thereafter have represent the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of (A) a number of one one-thousandths shares (or fractions of a share of Preferred Stock, such number of shares shares) of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior up to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the maximum number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (iimay permissibly be issued) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment a number of the applicable Purchase Price, (1) cash, (2) one two-hundredths of a reduction in the Purchase Price, (3) Common share of Preferred Stock or a number of (or fractions of) other equity securities of the Company (includingor, without limitationin the discretion of the Board, shares, or units of shares, of preferred stock debt securities) which the Board of Directors of the Company has deemed determined to have substantially the same aggregate current market value (determined pursuant to Sections 11(d)(i) and 11(d)(ii) hereof, to the extent applicable) as shares one share of Common Stock (such number of shares (or fractions of preferred stock being referred to herein as "common stock equivalents")), shares) of Preferred Stock (4) or other equity securities or debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred capital stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Samples: Shareholder Rights Agreement (El Paso Energy Corp/De)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event that the Company shall at any time after the date of this Agreement Record Date (A) declare declares a dividend on the Series C Preferred Stock payable in shares of Series C Preferred Stock, (B) subdivide subdivides the outstanding Series C Preferred Stock, (C) combine combines the outstanding Series C Preferred Stock into a smaller number of shares, or (D) issue issues any shares of its capital stock in a reclassification of the Series C Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Series C Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Series C Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Series C Preferred Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof. In no event shall adjustments under this Section 11(a)(i) be made to the extent that such adjustments result in the consideration payable in respect of the exercise of one Right being less than the aggregate par value of the shares of capital stock of the Company issuable upon the exercise of that Right.
(ii) In the event that:
that (A) any Person, shall, at any time after the Rights Dividend Declaration Date, be a Stock Acquisition Date occurs; or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a(B) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, declares any Person to be (x) fair to stockholders (taking into account all factors which an Adverse Person; then, in each such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, thencase, promptly following the first occurrence of any Section 11(a)(ii) Eventsuch event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Series C Preferred Stock, such number of shares of Company Common Stock of the Company as shall equal the result obtained by dividing (x) multiplying the product of (1) the then current Purchase Price by times (2) the then number of one one-thousandths hundredths of a share of Series C Preferred Stock for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and Event (y) dividing that product (whichsuch product, following such first occurrence, shall thereafter be referred to as the "Purchase PricePURCHASE PRICE" for each Right and for all purposes of this Agreement) by (y) the greater of (1) 50% of the Current Market Price per share of Company Common Stock on the date of such first occurrence and (2) the par value per share of Company Common Stock (such number of shares, the "ADJUSTMENT SHARES").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that (x) the total number of shares of Company Common Stock that are issued but not outstanding plus the total number of shares of Company Common Stock that are authorized but unissued (less the number of shares of Company Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes pursuant to specific terms of any indenture, option plan or other agreement other than upon exercise of the Rights are this Agreement) is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and hereof; or (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Company Common Stock and/or equivalent preferred stock so to be offered (and/or the aggregate initial conversion price available for exercise of the convertible securities so Rights in accordance with Section 11(a)(ii) hereof is sufficient to be offered) would purchase at permit such Current Market Price, and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may be exercise in a form other than cash, the value of such consideration shall be as determined in good faith by full but the Board of Directors determines that such exercise of the Company, whose determination shall be described in a statement filed with Rights will not afford adequate protection to the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock owned by or held for the account shareholders 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchshareholders
Appears in 1 contract
Samples: Rights Agreement (Corecomm LTD /De/)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares Series A Preferred 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.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Series A Preferred Stock Shares payable in shares of Series A Preferred StockShares, (B) subdivide the outstanding Series A Preferred StockShares, (C) combine the outstanding Series A Preferred Stock Shares into a smaller number of shares, Series A Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Series A Preferred Stock 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) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Series A Preferred Stock Shares transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to the following paragraph of this subparagraph (ii) and to Section 24 of this Agreement, in the event that:
(A) any Person (other than an Exempt Person), shallalone or together with its Affiliates and Associates, at any becomes an Acquiring Person (other than through an acquisition described in subparagraph (iii) of this paragraph (a)) or (B) during such time after the Rights Dividend Declaration Date, be or become as there is an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereofthere shall be any reclassification of securities (including any reverse stock split), or is an acquisition recapitalization or reorganization of shares the Company which has the effect, directly or indirectly, of Common Stock pursuant to a tender offer or an exchange offer for all increasing by more than 1% the proportionate share of the outstanding shares of Common Stock at a price and on terms determined by at least a majority any class of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests equity securities of the Company and or any of its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of Subsidiaries beneficially owned by any Section 11(a)(ii) EventAcquiring Person or any Affiliate or Associate thereof, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the a right to receive, upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one- hundredths of a Series A Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement, Agreement and in lieu of a number of one one-thousandths of a share of Series A Preferred StockShares, such number of shares of Common Stock Shares of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Series A Preferred Stock Share for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product by
(y) dividing 50% of the then current per share market price of the Company's Common Shares (determined pursuant to Section 11(d) hereof) on the date such Person became an Acquiring Person. From and after the occurrence of the earlier of the events described in clauses (A) and (B) above, any Rights that product are or were acquired or beneficially owned by such Acquiring Person (which, following or any Associate or Affiliate of such first occurrence, Acquiring Person) shall be void without any further action and any holder of such Rights shall thereafter be referred have no right to as the "Purchase Price" for each Right and for all purposes exercise such Rights under any provision of this Agreement)Agreement and no rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. No Rights Certificate shall be issued pursuant to Section 3 that represents Rights beneficially owned by an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof; no Rights Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and any Rights Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof shall be canceled.
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers The right to purchase Common Shares of the Company determine that the following is pursuant to subparagraph (ii) of this paragraph (a) shall not permitted by the terms arise as a result of any agreement Person becoming an Acquiring Person through an acquisition of Common Shares pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (A) such tender offer shall provide for the acquisition of all the outstanding Common Shares held by any Person other than such Person and its Affiliates for cash and (B) such acquisition shall cause such Person, together with all Affiliates and Associates of such Person, to be the Beneficial Owner of 90% or instrument to which more of the Company is a party on the date of this Agreement Common Shares then outstanding.
(or, if the Board of Directors so determines, after the date of this Agreement), then in iv) In the event that the number of shares of there shall not be sufficient Common Stock which are authorized by the Company's articles or certificate of incorporation Shares issued but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient authorized but unissued to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment shall take all such action as may be necessary to authorize additional Common Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any the Company shall, after good faith effort, be unable to take all such suspensionaction as my be necessary to authorize such additional Common Shares, the Company shall issue substitute, for each Common Share that would otherwise be issuable upon exercise of a public announcement stating Right, a number of Series A Preferred Shares or fraction thereof such that the exercisability current per share market price of one Series A Preferred Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes date of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options such Series A Preferred Shares or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 fixedfraction thereof.
(c) In case the Company shall fix a record date for a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Samples: Rights Agreement (Provant Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and of Preferred Shares (or number or kind of other shares of capital stock, as the case may be) covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement Date (A) declare a or pay any dividend on any series of the outstanding Preferred Stock Shares payable in shares Preferred Shares of Preferred Stockthe same series, (B) subdivide any series of the outstanding Preferred StockShares, (C) combine any series of the outstanding Preferred Stock Shares into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the outstanding Preferred Stock 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 in Section 7(e) hereof), the Purchase Price relating to the series of Preferred Shares at issue in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any associated Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares Preferred Shares of Preferred Stock the affected series or other capital stocksecurities, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Shares transfer books of the Company were open, he such holder would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In Subject to Section 24(c), in the event that:
(A) any Person, shallalone or together with its Affiliates and Associates, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have shall become an Acquiring Person is (a transaction set forth in "Section 13(a11 Event") hereof, or is an acquisition of shares of Common Stock (except pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock Shares at a price for each series of Common Shares and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one Company and are not Acquiring Persons or more investment banking firms, Affiliates or Associates thereof to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
shareholders (Bother than the Person or an Affiliate or Associate thereof on whose behalf the offer is being made) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation"Permitted Offer")), then, promptly following the first occurrence of any such a Section 11(a)(ii) 11 Event, proper provision shall be made so that each holder of a Right (Right, except as provided below and in Section 7(e), shall, for a period of sixty (60) hereof) shall thereafter days after the later of the occurrence of any such Section 11 Event or the effective date of an appropriate registration statement pursuant to Section 9, have the a right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number fractional interests in Preferred Shares and subject to the provisions of one one-thousandths of a share of Preferred StockSection 11(a)(iii), such number of shares of Common Stock Oncology Division Stock, in the case of an Oncology Right, and Agouron Stock, in the Company case an Agouron Right, as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-ten thousandths of a share of Preferred Stock Share for which one a Right was exercisable immediately prior to the first date of the occurrence of the Section 11 Event at issue (with the foregoing yielding a Section 11(a)(ii) Eventproduct determined separately, as the case may be, for the Oncology Rights and the Agouron Rights), and dividing such products by (y) dividing that product fifty percent (which50%) of the then current per share market price of the Oncology Division Stock or the Agouron Stock in the case of an Oncology Right or an Agouron Right, following respectively (determined pursuant to Section 11(d)), on the date of the occurrence of the Section 11 Event at issue (such first occurrence, shall thereafter be number of shares being referred to herein, respectively, as the "Purchase PriceOncology Adjustment Shares" for each Right and for all purposes the "Agouron Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this AgreementSection 11(a)(ii); and provided, further, that such sixty (60) day period shall not be deemed to run during any period in which the exercise of any of the Rights or the fulfillment by the Company or the Rights Agent of its or their obligations under this Agreement shall be enjoined or otherwise prohibited in full or in part by any court or other governmental agency or body.
(iii) Unless at least a majority In lieu of the members of the Company's Board of Directors who are not officers of issuing Oncology Adjustment Shares and/or Agouron Adjustment Shares in accordance with Section 11(a)(ii), the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (ormay, if the Board determines that such action is necessary or appropriate and not contrary to the interests of Directors so determinesholders of Rights, after the date of this Agreement)elect to (and, then in the event that the number of shares of Common Stock which are authorized by Board has not exercised the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights exchange right contained in Section 24(c) and there are not sufficient authorized but unissued shares of Oncology Division Stock or Agouron Stock, as the case may be, to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable take all such action as may be necessary to authorize, issue or pay, upon the exercise of a Right the Rights, cash (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment including by way of the applicable Purchase Price, (1) cash, (2) a reduction in of the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), property, Common Shares, other securities (4) whether equity or debt securities of the Company, (5) other assetsany subsidiary of the Company, or (6otherwise) or any combination of the foregoing thereof having an aggregate value equal to the Current Valuevalue of the Oncology Adjustment Shares and/or the Agouron Adjustment Shares, where such as the case may be, which otherwise would have been issuable pursuant to Section 11(a)(ii), which aggregate value has been shall be determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors Board. For purposes of the Company; providedpreceding sentence, howeverthe value of the Oncology Adjustment Shares and/or the Agouron Adjustment Shares, if as the Company case may be, shall not have made adequate provision to deliver value be determined pursuant to clause Section 11(d) and the value of any fractional interests in Preferred Shares or preference stock which the Board determines to be a "common share equivalent" shall be deemed to have the same value as the Oncology Adjustment Shares and/or the Agouron Adjustment Shares, as the case may be. Any such election by the Board must be made and publicly announced within sixty (B60) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right Section 11 Event at issue shall have occurred. Following the occurrence of redemption pursuant to such Section 23(a) expires (11 Event, the later of (x) and (y) being referred to herein as Board may suspend the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment exercisability of the Purchase Price, shares Rights for a period of Common Stock up to sixty (60) days following the date on which such Section 11 Event shall have occurred to the extent available) and then, if necessary, cash, which shares and/or cash that such Directors have an aggregate value equal not determined whether to the Spreadexercise their rights of election under this Section 11(a)(iii). If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock Oncology Adjustment Shares and/or Agouron Adjustment Shares, as the case may be, could be authorized for issuance upon exercise in full of the Rights, the 30 sixty (60) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after following the occurrence of the Section 11(a)(ii) Trigger Date11 Event at issue, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case If the Company shall fix a record date for the issuance of rights, options or warrants to all holders of any series of Preferred Stock Shares entitling them to subscribe for or purchase (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Preferred Stock Shares of such series (or shares having the same or more favorable rights, privileges and preferences as the shares Preferred Shares of Preferred Stock such series ("equivalent preferred stockshares")) or securities convertible into Preferred Stock Shares of such series or equivalent preferred stock shares at a price per share Preferred Share of Preferred Stock such series or per share of equivalent preferred stock share (or having a conversion price per share, if a security convertible into Preferred Stock Shares of such series or equivalent preferred stockshares) less than the Current Market Price then current market price (as determined pursuant to defined in Section 11(d) hereof)) per share Preferred Share of Preferred Stock such series 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 shares Preferred Shares of Preferred Stock such series outstanding on such record date, date plus the number of shares Preferred Shares of Preferred Stock such series which the aggregate offering price of the total number of shares Preferred Shares of Preferred Stock such series and/or equivalent preferred stock 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, current market price and the denominator of which shall be the number of shares Preferred Shares of Preferred Stock such series outstanding on such record date, date plus the number of additional shares Preferred Shares of Preferred Stock such series and/or equivalent preferred stock shares so 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 by delivery of in a consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in reasonably and with good faith to the holders of Rights by the Board of Directors of the CompanyBoard, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rightsconclusive for all purposes. Preferred Shares of Preferred Stock 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 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 If the Company shall fix a record date for the making of a distribution to all holders of any series of Preferred Stock Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred StockShares of such series, but including any dividenddividend payable in stock other than Preferred Shares of such series) or subscription rights 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 then current market price (as defined in Section 11(d)) per Preferred Share of such series on such record date, less the fair market value (as determined reasonably and with good faith to the holders of Rights by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and conclusive for all purposes) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants distributable in respect of one Preferred Share of such series and the denominator of which shall be the then current market price (as defined in Section 11(d)) per Preferred Share of such series. 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 be in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to as provided in Section 11(a)(iii) hereof), the "Current Market Pricecurrent market price" per share of the Common Stock Shares on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Shares for the 30 thirty (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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price current per share market price of the Common Stock Shares is determined during a period following the announcement by the issuer of such Common Stock Shares of (A) a dividend or distribution on such Common Stock Shares payable in shares of such Common Stock Shares or securities convertible into shares of such Common Stock (other than the Rights), Shares or (B) any subdivision, combination or reclassification of such Common StockShares, and prior to the expiration of the requisite 30 thirty (30) Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current Market Pricecurrent 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 NYSE New York Stock Exchange or, if the shares of Common Stock Shares are not listed or admitted to trading on the NYSENew 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 shares of Common Stock Shares are listed or admitted to trading or, if the shares of Common Stock 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 Dealers, Inc. Automated Quotation System ("NASDAQNasdaq") or such other system then in use, or, if on any such date, date the shares of Common Stock Shares are not quoted by any suchsuch 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. If on any such date no market maker is making a market in the Common Shares at issue, the fair value of such shares on such date as determined reasonably and with good faith by the Board shall be used and shall be binding on the Rights Agent and conclusive for all purposes. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the Common Shares at issue are listed or admitted to trading is open for the transaction of business or, if the Common Shares at issue are not listed or admitted to trading on any national securities exchange, a Business Day. If the Common Shares at issue are not publicly held or not so listed or traded, "current market price" per share shall mean the fair value per share determined reasonably and with good faith to the holders of Rights by the Board, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and conclusive for all purposes.
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In Subject to Section 23(a) and Section 24, in the event that:
any Person (A) any other than an Exempt Person), alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, be become the Beneficial Owner of 15% or become an Acquiring Personmore of the shares of Common Stock then outstanding, unless the event causing such Person the 15% threshold to have become an Acquiring Person be crossed is a transaction set forth in Section 13(a) hereof), or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company and who are not representatives, nominees, Affiliates or Associates of an Acquiring Person/the Board of Directors of the Company acting by Special Vote and by at least a majority of the Continuing Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (xa) at a price which is fair to stockholders of the Company (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchBoard
Appears in 1 contract
Samples: Rights Agreement (Quidel Corp /De/)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred StockShares, (C) combine the outstanding Preferred Stock Shares into a smaller number of shares, Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Shares (including any such reclassification in connection with a consolidation consolidation, merger or merger statutory share exchange in which the Company is the continuing continuing, surviving or surviving acquiring corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock issuable on such datedate pursuant to the exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effecteffect (and any applicable transfer taxes), the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Shares transfer books of the Company were open, he such holder would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In Subject to Section 24 of this Agreement, in the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have shall become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock (other than pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event13 Event occurring on or after the Distribution Date or within 15 days prior thereto), proper provision shall be made so that each holder of a Right (except as provided below and in Right, subject to Section 7(e) hereof) 11(a)(iii), shall thereafter have the a right to receive, upon exercise thereof at by payment of the amount equal to the product of the number of one one-hundredths of a Preferred Share which would otherwise be issuable upon exercise of a Right and the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred StockShares, such number of shares of Common Stock Shares of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock Share for which one a Right was is exercisable immediately prior to the first occurrence of a the Section 11(a)(ii) Event, Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority by 50% of the members then current per share market price of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument Common Shares (determined pursuant to which the Company is a party Section 11(d)) on the date of this Agreement (or, if the Board of Directors so determines, such occurrence. From and after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event or a Section 13 Event, any Rights that are beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) or were beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) after the Acquiring Person became an Acquiring Person shall become null and (y) the date on which the Company's right void without any further action and no holder of redemption such Rights shall thereafter have any rights to exercise such Rights or any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. No Right Certificate shall be issued pursuant to Section 23(a) expires (3 that represents Rights that would be void pursuant to the later preceding sentence; no Right Certificate shall be issued at any time upon the transfer of (x) any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate of such an Acquiring Person or to any nominee of such Acquiring Person, Associate or Affiliate; and (y) being referred any Right Certificate delivered to herein as the "Rights Agent for transfer to an Acquiring Person or any Associate or Affiliate of such Acquiring Person whose Rights would be void pursuant to the preceding sentence shall be canceled. The Company shall use all reasonable efforts to insure that the provisions of this Section 11(a)(ii) Trigger are complied with, but shall have no liability to any holder of a Right Certificate or other Person as a result of its failure in good faith to make any determinations with respect to an Acquiring Person or its Affiliates or Associates.
(iii) If, on the date of the occurrence of a Section 11(a)(ii) Event (the "Adjustment Date"), the Company does not have sufficient authorized, unissued and unreserved Common Shares available to permit the exercise in full of all Rights that are exercisable on the Adjustment Date for the number of Common Shares per Right provided for in Section 11(a)(ii), then the Exercise Price (as defined below) and the number of Common Shares to be delivered by the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be further adjusted as provided in this subparagraph (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iiiiii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Samples: Rights Agreement (Minntech Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares -12- covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of on the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof).
(ii) In the event that: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, (1) shall merge 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 Stock of the Company shall remain outstanding and not changed into or exchanged for stock or other securities of any other Person or the Company or cash or any other property, (2) shall, in one or more transactions, other than in connection with the exercise of Rights or in connection with the exercise or conversion of securities exchangeable or convertible into capital stock of the Company or any of -13- its subsidiaries, transfer any assets to the Company or any of its subsidiaries in exchange (in whole or in part) for shares of any class of capital stock of the Company or any of its subsidiaries or for securities exercisable for or convertible into shares of any class of capital stock 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 capital stock of the Company or any of its subsidiaries or securities exercisable for or convertible into shares of any class of capital stock of the Company or any of its subsidiaries (other than as part of a pro rata distribution to all holders of such shares of capital stock of the Company or any of its subsidiaries), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one or more transactions), to, from or with, as the case may be, the Company or any of its subsidiaries, assets, including securities, on terms and conditions less favorable to the Company than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third party, (4) shall receive any compensation from the Company or any of the Company's subsidiaries other than compensation for full-time employment as a regular employee at rates in accordance with the Company's (or its subsidiaries') past practices, or (5) shall 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
(B) 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 involving the Company or any subsidiaries of the Company (whether or not with or into or otherwise involving an Acquiring Person) which has the effect, directly or indirectly, of increasing by more than 1% of 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 owned by any Acquiring -14- Person or any Associate or Affiliate of any Acquiring Person, or
(C) Any Acquiring Person, alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Datedate of this Agreement, be become the Beneficial Owner of 30% or become an Acquiring Personmore of the Common Stock then outstanding, unless the event causing such Person the 30% threshold to have become an Acquiring Person be crossed is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer made pursuant to Schedule 14D-1 (or any successor form) filed with the Securities and Exchange Commission for all outstanding shares of Common Stock (other than shares of Common Stock held by the Person making the offer, or any Affiliate or Associate of such Person) at a price and on terms determined in good faith by at least a majority of the members of the Board of Disinterested Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, Company to be (xa) at a price which is fair to stockholders shareholders (taking into account all factors which such members of the Board deem relevantrelevant including, without limitation, prices which could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (yb) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigationshareholders, then, promptly following the first occurrence of any Section 11(a)(ii) Eventand in each such case, proper provision shall be made so that each holder of a Right Rights Certificate (except as provided below and in Section 7(e) hereof) ), shall thereafter have the a right to receive, upon exercise thereof at the then then- current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share shares of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then then-current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock for which one Right was a Rights Certificate is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) dividing that product 50% of the current per share market price of the Common Stock (whichdetermined pursuant to Section 11(d)) on the fifth day (or if such day is not a business day, following the first business day after the fifth day) after the earlier of the date of the occurrence or the date of the first public announcement of any one of the events listed above in this subparagraph (ii) (such first occurrence, shall thereafter be number of shares being referred to as the "Purchase Price" for each Right Adjustment Shares"), PROVIDED, HOWEVER, that if the adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and for all purposes no adjustment shall be made pursuant to this Section 11(a)(ii). Notwithstanding the foregoing, upon the occurrence of any of the events listed above in this paragraph (ii), any Rights that are or were on or after the earlier of the -15- Distribution Date or Stock Acquisition Date beneficially owned by the Acquiring Person or any Associate or Affiliate of the Acquiring Person shall become void and any holder of such Rights shall thereafter have no right to exercise such Rights under any provision of this Agreement). The Company shall not enter into any transaction of the kind listed in this subparagraph (ii) if at the time of such transaction there are any rights, warrants, instruments or securities outstanding or any agreements in effect which, as a result of the consummation of such transaction, would eliminate or substantially diminish the benefits intended to be afforded by the Rights. Any Rights Certificate issued pursuant to Section 3 hereof that represents Rights beneficially owned by an Acquiring Person or any Associate or Affiliate thereof and any Rights Certificate issued at any time upon the transfer of any Rights to an Acquiring Person or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate, and any Rights Certificate issued pursuant to Section 6 or this Section 11 upon transfer, exchange, replacement or adjustment of any other Rights Certificate referred to in this sentence, shall contain the legend set forth in Section 4(b) hereof.
(iii) Unless at least a majority In lieu of issuing shares of Common Stock in accordance with Section 11(a)(ii) hereof, the Company may, if two-thirds of the members of the Company's Board of Disinterested Directors who are not officers of the Company determine that such action is necessary or appropriate and not contrary to the following is not permitted by the terms interest of any agreement or instrument to which the Company is a party on the date holders of this Agreement Rights (orand, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: ): (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") ), over (2) the Purchase Price (such excess being referred to herein as excess, the "Spread"), ) and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as stock, "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause of
(Bc) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance making of rights, options or warrants a distribution to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) the Preferred Stock (including any such distribution made in connection with a consolidation or shares having merger in which the same rights, privileges and preferences as Company is the shares continuing or surviving corporation) of evidences of indebtedness or assets (other than a regular periodic cash dividend at a rate not in excess of 125% of the rate of the last regular periodic cash dividend theretofore paid or a dividend payable in Preferred Stock ("equivalent preferred stock")-18- Stock) or securities convertible into Preferred Stock subscription rights or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock warrants (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant excluding those referred to in Section 11(d11(b) hereof) per share of Preferred Stock 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 current per share market price of shares of the Preferred Stock outstanding (as defined in Section 11(d)) on such record date, plus less the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock so to be offered fair market value (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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders Agent) of the Rights. Shares portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one share of Preferred Stock owned by or held for and the account denominator of which shall be such current per share market price of the Company shall not be deemed outstanding for the purpose of any such computationPreferred Stock (as defined in Section 11(d)). Such adjustment adjustments shall be made successively whenever such a record date is fixed, ; and in the event that such rights or warrants are distribution is not so issuedmade, 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.
(c) In case the Company shall fix a record date for a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" current per share market price" of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 30 thirty (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) hereof, the "Current Market Price" current per share market price" of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 ten (10) consecutive Trading Days (as such term is hereinafter defined) immediately following such date; providedPROVIDED, howeverHOWEVER, that in the event that the Current Market Price current per share market price of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), Rights which are the subject of this Agreement) or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 thirty (30) Trading Day Days or 10 ten (10) Trading Day periodDays, 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 Pricecurrent per share market price" shall be properly appropriately adjusted to take into account ex-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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchsale
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. RIGHTS The Purchase Price, the number and kind of Preferred Shares or shares of capital stock covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement Record Date (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred StockShares, (C) combine the outstanding Preferred Stock Shares into a smaller number of shares, Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock 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 or Section 7(e7(f) hereof, the Purchase Price in effect for the Rights at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of Preferred Shares or shares of Preferred Stock or other capital stock, as the case may be, stock issuable on such datedate upon exercise of the Right, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receiveshall, upon payment of the Purchase Price then in effect, be entitled to receive the aggregate number and kind of Preferred Shares or shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Shares transfer books of the Company were open, he such Holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one (1) such Right be less than the per share par value of the shares of capital stock issuable upon the exercise of such Right. If an event occurs which would require an adjustment under both this Section Sections 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to the provisions of Section 24 hereof, in the event that:
(A) any Person, shall, Person becomes an Acquiring Person at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, Record Date then, promptly following the first occurrence of any Section 11(a)(ii) Eventsuch event, proper provision shall be made so that each holder of a Right (except other than as provided below and or in Section 7(e7(f) hereof) shall thereafter have the a right to receive, upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one-hundredths of a Preferred Share for which a Right is then exercisable in accordance with the terms of this Agreement, Agreement and in lieu of a number of one one-thousandths of a share of Preferred StockShares, such number of shares of Common Stock Shares of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock Share for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product by 50% of the then current per share market price of the Company's Common Shares (whichdetermined pursuant to Section 11(d) hereof) on the Shares Acquisition Date. Notwithstanding the above, following such first occurrenceif the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall thereafter apply and no adjustment shall be referred made pursuant to as the "Purchase Price" for each Right and for all purposes of this AgreementSection 11(a)(ii).
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which are Shares authorized by the Company's articles or certificate Restated Certificate of incorporation Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are shall not be sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine , to the excess of (1) the value extent permitted by applicable law, take all such action as may be necessary to authorize additional Common Shares for issuance upon exercise of the Adjustment Shares issuable upon Rights including the exercise calling of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment meeting of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyStockholders; provided, however, if the Company shall not have made adequate provision is unable to deliver value cause the authorization of additional Common Shares then the Company, to the extent necessary and permitted by applicable law and any agreements or instruments in effect on the date hereof to which it is a party, shall, at its option (A) pay cash equal to twice the applicable Purchase Price (as adjusted pursuant to clause this Section 11) in lieu of issuing any such Common Shares and requiring payment therefor, (B) above within 30 days following the later of (x) the first occurrence of issue equity securities having a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If market price of Common Shares which otherwise would have been issuable pursuant to the Board foregoing subparagraph (ii), which value shall be determined by the Board, whose determination shall be described in a statement filed with the Rights Agent, (C) distribute a combination of Directors Common Shares, cash and/or other equity securities having a value equal to the market price of the shares of the Common Shares which are otherwise issuable pursuant to the foregoing subparagraph (ii), determined in accordance with the preceding clause (B), upon exercise of the related Rights, or (D) the Company shall determine in good faith substitute, for each Common Share that it is likely that sufficient additional shares of Common Stock could would otherwise be authorized for issuance issuable upon exercise in full of a Right, a number of Preferred Shares or fraction thereof such that the current per share market price of one Preferred Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization date of issuance of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value Preferred Shares or fraction thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rightsrights (other than Rights), options or warrants to all holders of Preferred Stock Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Stock Shares (or shares having substantially the same rights, privileges and preferences as the shares of Preferred Stock Shares ("equivalent preferred stockshares")) or securities convertible into Preferred Stock Shares or equivalent preferred stock shares at a price per share of Preferred Stock Share or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchequivalent
Appears in 1 contract
Samples: Rights Agreement (Drug Emporium Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred StockStock into a greater number of shares, (C) combine the outstanding Preferred Stock into a smaller number of sharesshare, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, stock as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to Section 24 of this Agreement, in the event that:
(A) any Person, shallalone or together with its Affiliates and Associates, at any time after the Rights Dividend Declaration Date, be or shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first date of the occurrence of any Section 11(a)(ii) Eventsuch event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a the number of one one-thousandths hundredths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths one hundredths of a share of Preferred Stock for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the current market price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (iii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being shall be referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being shall be referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, shall be referred to herein as the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security is convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 Pricecurrent market price, and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock owned by or held for the account of the Company or a Subsidiary 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividenddividend payable in stock other than Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred Stock and the denominator of which shall be such current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock. 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 be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 Pricecurrent market price" shall be properly adjusted to take into account ex-ex- dividend trading. The closing price for each day shall be the last sale reported sales price as reported by the New York Stock Exchange, Inc. ("NYSE"), or if the shares of Common Stock are not listed or traded on the NYSE, the closing price for each day shall be the last reported sales 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, date the shares of Common Stock are not quoted by any suchthe
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Securities or Number of Rights. The Purchase Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In To preserve the event actual or potential economic value of the Company shall Rights, if at any time after the date of this Rights Agreement (A) declare a dividend on there shall be any change in the Common Stock or the Preferred Stock, whether by reason of stock dividends, stock splits, recapitalizations, mergers, consolidations, combinations or other similar changes in capitalization, any distribution or issuance of cash, assets, evidences of indebtedness or subscription rights, options or warrants to holders of Common Stock payable or Preferred Stock, as the case may be (other than distribution of the Rights or regular cash dividends) or otherwise, then, in each such event the Board shall make such appropriate adjustments in the number of shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-division, combination or reclassification, and the number and kind of shares other securities) issuable upon exercise of Preferred Stock or other capital stockeach Right, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then and Redemption Price in effect, effect at such time and the aggregate number and kind of shares Rights outstanding at such time (including the number of Preferred Stock Rights or other capital stock, as fractional Rights associated with each share of Common Stock) such that following such adjustment such event shall not have had the case may be, which, if such Right had been exercised immediately prior to such date and at a time when effect of reducing or limiting the Preferred Stock transfer books benefits the holders of the Company were open, he Rights would have owned upon had absent such exercise and been entitled to receive event. The adjustments provided for in this Section 11(a)(i) shall be made successively whenever such an adjustment is required by virtue of such dividend, subdivision, combination or reclassificationthis Section 11(a)(i). If an event occurs which would will require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(iiiii) In the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, that there shall not be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of sufficient shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation issued but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient authorized but unissued to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company covenants and agrees that it will take all such action as may be necessary to authorize additional shares of Preferred Stock for issuance upon the exercise of Rights; provided, however, that if the Company is unable to cause the authorization of additional shares of Preferred Stock, then the Company shall: , or in lieu of seeking any such authorization, the Company may, to the extent necessary and permitted by applicable law and any agreements, indentures or instruments in effect prior to the Distribution Date to which it is a party, (A) determine upon surrender of a Right, pay cash equal to the excess Purchase Price in lieu of issuing shares of Preferred Stock and requiring payment therefor, (1B) upon due exercise of a Right and payment of the Purchase Price for each share of Preferred Stock as to which such Right is exercised, issue equity securities having a value equal to the value of the Adjustment Shares shares of Preferred Stock which otherwise would have been issuable pursuant to the foregoing subparagraph (ii), which value shall be determined by an investment banking firm selected by the Board, or (C) upon the due exercise of a Right (the "Current Value") over (2) and payment of the Purchase Price (for each share of Preferred Stock as to which such excess being referred to herein as the "Spread")Right is exercised, and (B) with respect to each Rightdistribute Preferred Stock, make adequate provision to substitute for the Adjustment SharesCommon Stock, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (includingsecurities, without limitation, shares, cash or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing thereof) having an aggregate value equal to the Current Valuevalue of the shares of Preferred Stock which otherwise would have been issuable pursuant to the foregoing subparagraph (ii), where such aggregate which value has been shall be determined by the Board of Directors of the Company based upon the advice of a nationally recognized an investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional sharesBoard. To the extent that any legal or contractual restrictions (pursuant to agreements or instruments in effect prior to the Distribution Date to which it is party) prevent the Company determines that some action need be (and may be) taken pursuant to from paying the first and/or second sentences of this Section 11(a)(iii), full amount payable in accordance with the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspensionforegoing sentence, the Company shall issue a public announcement stating that the exercisability pay to holders of the Rights has been temporarily suspended, as well as a public announcement at to which such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to payments are being made all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 amounts which shall be the number of shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which would then be restricted on a pro rata basis as such payments become permissible under such legal or contractual restrictions until such payments have been paid in effect if such record date had not been fixedfull.
(c) In case the Company shall fix a record date for a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices Closing Prices (as hereinafter defined) per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in if the event that the Current Market Price current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities exercisable for or convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 Pricecurrent market price" shall be properly adjusted to take into account ex-dividend trading. The closing price "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 NYSE New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the NYSENew York Stock Exchange, as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") NASDAQ or such other system then in use, use or, if on any such date, date the shares of Common Stock are not quoted by any suchsuch organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the Common Stock, 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. If the Common Stock is not publicly held or not so listed or traded, the "current market price" per share means the fair value per share as determined in good faith by the Board of Directors of the Company, or, if at the time of such determination there is an Acquiring Person, by a majority of the Continuing Directors then in office, or if there are no Continuing Directors, by an investment banking firm selected by the Board of Directors, which determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the "current market price" of the Preferred Stock shall be determined in the same manner as set forth above for the Common Stock in Section 11(b)(i). If the current market price for the Preferred Stock cannot be determined in the manner provided above, the "current market price" of the Preferred Stock shall be conclusively deemed to be the current market price of the Common Stock (appropriately adjusted to reflect any stock split, stock dividend, or similar transaction occurring after the date hereof), multiplied by one thousand. For the purpose of any computation hereunder, the value of any securities or assets other than the Preferred Stock or Common Stock of the Company shall be the fair value as determined in good faith by the Board of Directors of the Company, and, if at the time of such determination there is an Acquiring Person, by a majority of the Continuing Directors then in office, or, if there are no Continuing Directors, by an investment banking firm selected by the Board of Directors, which determination shall be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
(c) Except as hereinafter provided, no adjustment in the Purchase Price shall be required unless such adjustment would require an increase or decrease of at least 1% in the Purchase Price; provided, however, that any adjustments which by reason of this Section 11(c) are not required to be made shall be carried forward and taken into account in any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest cent or to the nearest one one-hundred thousandth (1/100,000th) of a share of Preferred Stock. Notwithstanding the first sentence of this Section 11(c), any adjustment required by this Section 11 shall be made no later than the earlier of (i) one year from the date of the transaction which mandates such adjustment or (ii) the Expiration Date.
(d) If, as a result of an adjustment made pursuant to Section 11(a), the holder of any Right thereafter exercised shall become entitled to receive any securities other than shares of Preferred Stock, thereafter the number of such securities 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 of Section 11(a) through (c), inclusive and the provisions of Sections 7, 9, 10, 13 and 14 with respect to the Preferred Stock shall apply, as nearly as reasonably may be, on like terms to any such other securities.
(e) All Rights originally issued by the Company subsequent to any adjustment made to the number of shares of Preferred Stock or other securities relating to a right shall evidence the right to purchase, for the Purchase Price, the adjusted number and kind of securities purchasable from time to time hereunder upon exercise of the Rights, all subject to further adjustment as provided herein.
(f) Irrespective of any adjustment or change in the Purchase Price or the number of shares of Preferred Stock or number or kind of other securities issuable upon the exercise of the Rights, the Right Certificates theretofore and thereafter issued may continue to express the terms which were expressed in the initial Right Certificates issued hereunder.
(g) Before taking any action that would cause an adjustment reducing the Purchase Price per whole share of Preferred Stock upon exercise below the then par value, if any, of the shares of Preferred 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 shares of Preferred Stock at such adjusted Purchase Price.
(h) In any case in which this Section 11 shall require that an adjustment 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 issuance to the holder of any Right exercised after such record date the number of shares of Preferred Stock (or other securities) issuable upon such exercise over and above the number of shares of Preferred Stock (or other securities) issuable before giving effect to such adjustment; provided, however, that the Company shall deliver to such holder a due bill xx other appropriate instrument evidencing such holder's right to receive such additional shares or securities upon the occurrence of the event requiring such adjustment.
(i) The Company covenants and agrees that it will not at any time after the Distribution Date (i) consolidate with, (ii) merge with or into, or (iii) sell or otherwise transfer (and/or permit any of its Subsidiaries to sell or otherwise transfer), in one transaction or a series of related transactions, assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries taken as a whole, to any other Person or Persons if (x) at the time of or immediately after such consolidation, merger or sale there are any rights, warrants or other instruments or securities outstanding or any agreements or arrangements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights or (y) prior to, simultaneously with or immediately after such consolidation, merger or sale, the stockholders of a Person who constitutes, or would constitute, the "Principal Party" for the purposes of Section 13 shall have received a distribution of Rights previously owned by such Person or any of its Affiliates and Associates.
(j) The Company covenants and agrees that after the Distribution Date, it will not, except as permitted by Section 23, Section 24 or Section 27 take (or permit any Subsidiary to take) any action if at the time such action is taken it is reasonably foreseeable that such action will substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights.
Appears in 1 contract
Samples: Rights Agreement (Iteq Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Common Stock or the Preferred Stock payable in shares (or fractional shares) of Common Stock or Preferred Stock, (B) subdivide the outstanding Common Stock or Preferred Stock, (C) combine the outstanding Common Stock or Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Common Stock or the Preferred Stock (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) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares Units (or the number and kind of Preferred Stock or other capital stocksecurities, as the case may be), issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock Units (or such other capital stocksecurities, as the case may be), which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were opendate, he such holder would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this this
Section 11(a)(i11(a) (i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) In the event thatevent:
(A) any Person shall become an Acquiring Person, shallother than pursuant to any transaction which constitutes a Section 13 Event; or
(B) a majority of the Continuing Directors shall declare by resolution any Person to be an Adverse Person, upon a determination that such Person, alone or together with its Affiliates and Associates, has, at any time after this Agreement has been filed with the Securities and Exchange Commission as an exhibit to a filing under the Exchange Act, become the Beneficial Owner of a number of shares of Company Common Stock which the Continuing Directors determine to be substantial (which number of shares shall in no event represent less than 10% of the outstanding shares of Company Common Stock) and a determination by the Continuing Directors, after reasonable inquiry and investigation, including consultation with such persons as such directors shall deem appropriate and consideration of such factors selected by such directors as are permitted by applicable law, that (a) such Beneficial Ownership by such Person is intended to cause the Company to repurchase the shares of Common Stock beneficially owned by such Person or to cause pressure on the Company to take action or enter into a transaction or series of transactions intended to provide such Person with short-term financial gain under circumstances where the Continuing Directors determine that the best long-term interests of the Company would not be served by taking such action or entering into such transaction or series of transactions at that time, or (b) such Beneficial Ownership is causing or reasonably likely to cause a material adverse impact (including, but not limited to, impairment of relationships with customers or impairment of the Company's ability to maintain its competitive position) on the business or prospects of the Company, on the Company's employees, customers or suppliers or on the communities in which the Company operates or is located; or
(C) any Acquiring Person (for purposes of this Section 11(a)(ii)(C) and of Section 11(a)(ii)(D), the term "Acquiring Person" shall be deemed to include an Adverse Person) or any Associate or Affiliate of any Acquiring Person, at any time after the Rights Dividend Declaration Datedate of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or become surviving corporation of such merger or combination and Company Common Stock shall remain outstanding and unchanged, (2) shall, in one transaction or a series of transactions, transfer any assets to the Company or to any of its Subsidiaries in exchange (in whole or in part) for shares of Company Common Stock, for other equity securities of the Company or any such Subsidiary, or for securities exercisable for or convertible into shares of equity securities of the Company or any of its Subsidiaries (whether Company Common Stock or otherwise) or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of such equity securities or securities exercisable for or convertible into such equity securities (other than pursuant to a PRO RATA distribution to all holders of Company Common Stock), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one transaction or a series of transactions, to, from or with the Company or any of its Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such a plan acting in such capacity, assets (including securities) on terms and conditions less favorable to the Company or such Subsidiary or plan than those that could have been obtained in arm's-length negotiations with an Acquiring Personunaffiliated third party, unless other than pursuant to a transaction described in Section 13(a), (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one transaction or a series of transactions, to, from or with the event causing Company or any of the Company's Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such Person to have become an a plan acting in such capacity (other than transactions, if any, consistent with those engaged in, as of the date hereof, by the Company and such Acquiring Person is or such Associate or Affiliate), assets (including securities) having an aggregate fair market value of more than $10,000,000, other than pursuant to a transaction set forth in Section 13(a), (5) hereofshall sell, purchase, lease, exchange, mortgage, pledge, transfer or is an acquisition otherwise acquire or dispose of, in one transaction or a series of shares transactions, to, from or with the Company or any of Common Stock its Subsidiaries or any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such a plan acting in such capacity, any material trademark or material service mark, other than pursuant to a tender offer transaction set forth xx Section 13(a), (6) shall receive, or an exchange offer any designee, agent or representative of such Acquiring Person or any Affiliate or Associate of such Acquiring Person shall receive, any compensation from the Company or any of its Subsidiaries other than compensation for all outstanding shares full-time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices, or (7) shall receive the benefit, directly or indirectly (except proportionately as a holder of Company Common Stock at or as required by law or governmental regulation), 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 any employee benefit plan maintained by the Company or any of its Subsidiaries or any trustee or fiduciary with respect to such a price and on terms determined by at least a majority plan acting in such capacity; or
(D) during such time as there is an Acquiring Person, there shall be any reclassification of the members of the Board of Directors who are not officers securities (including any reverse stock split), or recapitalization of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests any merger or consolidation of the Company and with any of its stockholdersSubsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries, or
other than a transaction or transactions to which the provisions of Section 13(a) apply (B) (whether or not with or into or otherwise involving an Acquiring Person), which has the effect, directly or indirectly, of increasing by more than 1) at least a majority % the proportionate share of the members outstanding shares of any class of equity securities of the Board Company or any of Directors who are not officers its Subsidiaries that is directly or indirectly beneficially owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person; THEN, immediately upon the date of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any an event described in Section 11(a)(ii11(a)(ii)(A)-(D) Eventhereof (a "SECTION 11(A)(II) EVENT"), proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof)) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a the number of one one-thousandths Units for which a Right was exercisable immediately prior to the first occurrence of a share of Preferred StockSection 11(a)(ii) Event, such number of shares of Common Stock of the Company Units as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock Units for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) EventEvent (such product thereafter being, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)13, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchPurchase
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS; EXCHANGE OF RIGHTS FOR SHARES OF COMMON STOCK. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Common Stock payable in shares of Preferred Common Stock, (B) subdivide the outstanding Preferred shares of Common Stock, (C) combine the outstanding Preferred Common Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Common Stock (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 or Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock issuable on such date, shall be appropriately and proportionately adjusted (including applicable adjustments under paragraph (p) of this Section 11) so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of any Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of such Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such any Person to have shall become an Acquiring Person is (such event being referred to herein as a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any "Section 11(a)(ii) Event"), then, subject to Sections 11(r) and 23(a) and except as otherwise provided in this Section 11, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-thousandths of a share of Preferred StockShare for which the Right is then exercisable, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock Share for which one a Right was exercisable immediately prior to the first occurrence of a the Section 11(a)(ii) Event, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority 50% of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock owned by or held for the account of the Company shall not be deemed outstanding for on 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share occurrence of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights11(a)(ii), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Samples: Rights Agreement (Ameripath Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number Number and kind Kind of shares covered by each Right and the number Shares or Number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11Rights.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare pay a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred StockStock into a greater number of shares, (C) combine the outstanding Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which involving the Company is the continuing or surviving corporationCompany), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of immediately prior to the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the each holder of any a Right exercised after such time shall (except as otherwise provided herein, including Section 5(e)) thereafter be entitled to receive, upon payment exercise of such Right at the Purchase Price then in effecteffect immediately prior to such date, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock applicable transfer books of the Company were open, he such holder would have owned been entitled to receive upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require requires an adjustment under both this Section 11(a)(i8(a)(i) and Section 11(a)(ii) hereof8(a)(ii), the adjustment provided for in this Section 11(a)(i8(a)(i) shall be in addition to, and shall be made prior to, to and in addition to any adjustment required pursuant to Section 11(a)(ii) hereof8(a)(ii).
(ii) In the event that:
(A) If any Person, alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Datedate of this Agreement, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is (a transaction set forth in "Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii8(a)(ii) Event"), then each holder of a Right shall (except as otherwise provided below and in herein, including Section 7(e5(e)) hereof) shall thereafter have the right be entitled to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable effect immediately prior to the first occurrence of a Section 11(a)(ii8(a)(ii) Event, and (y) dividing that product (whichin lieu of Preferred Stock, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of duly authorized, validly issued, fully paid and nonassessable shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess shares being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1") cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined result obtained by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchdividing
Appears in 1 contract
Samples: Rights Agreement (Laboratory Corp of America Holdings)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event that the Company shall shall, at any time after the date of this Agreement Agreement, (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred StockShares, (C) combine the outstanding Preferred Stock Shares into a smaller number of shares, Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock 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) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of Preferred Shares or other shares of Preferred Stock or other capital stock, as the case may be, issuable on such datedate upon exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of Preferred Shares or other shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Shares (or following the occurrence of a Triggering Event, other securities of the Company) transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to the provisions of Section 24 hereof, in the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or Person shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Eventsuch event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the a right to receive, upon exercise thereof at a price equal to the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a the number of one one-thousandths hundredths of a share Preferred Share for which a Right was exercisable immediately prior to the occurrence of Preferred Stocksuch event, such number of shares of Common Stock Shares of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock Share for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, such event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the then current market price of the Common Shares of the Company (determined pursuant to Section 11(d) hereof) per share on the date of such occurrence (such number of shares referred to herein as the "Adjustment Shares").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock Shares which are authorized by the Company's articles or certificate Certificate of incorporation Incorporation, as then amended and restated, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to is herein as called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment the exercise of the applicable Purchase PriceRights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock Shares or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock Shares (such shares or units of shares of preferred stock being are referred to herein as "common stock equivalentsCommon Share Equivalents")), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii11(a)(iii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock Share (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock Shares could be authorized for issuance upon exercise in full of the Rights, the 30 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such 30-day period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need should be (and may be) taken pursuant to the first and/or second third sentences of this Section 11(a)(iii), the Company (x1) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y2) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any such stockholder approval for such authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock Shares shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) current market price per share of the Common Stock Share on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" Common Share Equivalent shall be deemed to have the same value as the Common Stock Shares on such date.
(b) In case the event the Company shall shall, at any time after the date of this Agreement, fix a record date for the issuance of rightsrights (other than the Rights), options or warrants to all holders of Preferred Stock Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock Shares (or shares having substantially the same rights, privileges and preferences as the shares of Preferred Stock Shares ("equivalent preferred stockEquivalent Preferred Shares")) or securities convertible into Preferred Stock Shares or equivalent preferred stock Equivalent Preferred Shares at a price per share of Preferred Stock Share or per share of equivalent preferred stock Equivalent Preferred Share (or having a conversion price per share, if a security convertible into Preferred Stock Shares or equivalent preferred stockEquivalent Preferred Shares) less than the Current Market Price current market price (as determined pursuant to Section Schedule 11(d) hereof) per share of the Preferred Stock Shares or Equivalent Preferred Shares 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 sum of the number of shares of Preferred Stock Shares outstanding on such record date, date plus the number of shares of Preferred Stock Shares which the aggregate offering price of the total number of shares of Preferred Stock Shares and/or equivalent preferred stock Equivalent Preferred Shares so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Pricecurrent market price, and the denominator of which shall be the number of shares of Preferred Stock Shares and/or Equivalent Preferred Shares outstanding on such record date, date plus the number of additional shares of Preferred Stock Shares and/or equivalent preferred stock Equivalent Preferred Shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case the event such subscription price may be paid by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Preferred Shares of Preferred Stock owned by or held for the account of the Company or any Subsidiary 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 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 event that the Company shall shall, at any time after the date of this Agreement, fix a record date for a distribution to all holders of Preferred Stock Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, Shares but including any dividenddividend payable in stock other than Preferred Shares) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the current market price (as determined pursuant to Section 11(d) hereof) per share of the Preferred Shares on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agreement and the holders of the Rights) of the cash, assets or evidences of indebtedness to be distributed or of such subscription rights or warrants applicable to one Preferred Share, and the denominator of which shall be such current market price (as determined pursuant to Section 11(d) hereof) per share of the Preferred Shares; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed, and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock any security (a "Security" for purposes of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such dateto, and for purposes of computations made pursuant to Section 11(a)(iii) hereofbut not including, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price current market price per share of the Common Stock Security is determined during a period following the announcement by the issuer of such Common Stock Security of (A) a dividend or distribution on Common Stock such Security payable in shares of Common Stock such Security or securities convertible into shares of Common Stock (other than the Rights), such Securities or (B) any subdivisionsubsidivision, combination or reclassification of such Common Stock, Security and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for of such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current Market Price" current market price shall be properly adjusted to take into account ex-dividend tradingsuch event. 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 case, as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the NYSE New York Stock Exchange or, if the shares of Common Stock are Security is not listed or admitted to trading on the NYSENew 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 shares of Common Stock are Security is listed or admitted to trading or, if the shares of Common Stock are Security is not listed or admitted to trading on any national securities exchange, the last quoted price 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 Automated Quotation System ("NASDAQ") Nasdaq or such other system then in use, or, if on any such date, date the shares of Common Stock are Security is not quoted by any suchsuch organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in such 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.
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Junior Preferred Stock payable in shares of the Junior Preferred Stock, (B) subdivide the outstanding Junior Preferred Stock, (C) combine the outstanding Junior Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Junior Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Junior Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, receive upon payment of the Purchase Price then in effect, effect the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Junior Preferred Stock (or Common Stock and/or other securities) transfer books of the Company were open, he would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In Subject to Section 23 of this Agreement, in the event that:
(A) any Person, shallalone or together with its Affiliates and Associates, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become becomes an Acquiring Person is (a transaction set forth in "Section 13(a11(a)(ii) hereofEvent"), or is an acquisition then, prior to the later of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair the date on which the Company's rights of redemption pursuant to stockholders (taking into account all factors which such members of the Board deem relevantSection 22(a) and expire, or (y) otherwise in five (5) days after the best interests date of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any a Section 11(a)(ii) Event, each proper provision shall be made so that
(A) Each holder of a Right (Class A Right, except as provided below and in Section 7(e) hereof) , shall thereafter have the a right to receive, upon exercise thereof at the then current Purchase Price for the number of one one-thousandths of a share of Junior Preferred Stock for which such Class A Right is then exercisable in accordance with the terms of this Agreement, in lieu of a number shares of one one-thousandths of a share of Junior Preferred Stock, such number of shares of the Class A Common Stock of the Company (subject to Section 3(a) hereof) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one thousandths of a share of Junior Preferred Stock for which a Class A Right is then exercisable and dividing that product by (y) fifty percent (50%) of the Current Market Price per share of the Class A Common Stock of the Company (determined pursuant to Section 11(d)) on the date of the occurrence of the event listed above in this subparagraph (ii) (such number of shares are hereinafter referred to as the "Class A Adjustment Shares") provided that the Purchase Price and the number of Class A Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of such first occurrence; and
(B) Each holder of a Class B Right, except as provided in Section 7(e) hereof, shall thereafter have a right to receive, upon exercise thereof at the then current Purchase Price for the number of one one-thousandths of a share of Junior Preferred Stock for which such Class B Right is then exercisable in accordance with the terms of this Agreement, in lieu of shares of Junior Preferred Stock, such number of shares of the Class B Common Stock of the Company (subject to Section 3(a) hereof) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one Right was exercisable immediately prior to the first occurrence one thousandths of a Section 11(a)(ii) Event, share of Junior Preferred Stock for which a Class B Right is then exercisable and dividing that product by (y) dividing that product fifty percent (which, following 50%) of the Current Market Price per share of the Class B Common Stock of the Company (determined pursuant to Section 11(d)) on the date of the occurrence of the event listed above in this subparagraph (ii) (such first occurrence, shall thereafter be number of shares are hereinafter referred to as the "Class B Adjustment Shares") (together with the Class A Adjustment Shares, the "Adjustment Shares") provided that the Purchase Price" for each Right Price and for all purposes the number of Class B Adjustment Shares shall be further adjusted as provided in this Agreement)Agreement to reflect any events occurring after the date of such first occurrence.
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate Restated Certificate of incorporation Incorporation, as amended, but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as excess, the "Spread"), ) and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of the Rights and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (subject to Section 3(a) hereof) (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as stock, "common stock equivalentsCommon Stock Equivalents")), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right rights of redemption pursuant to Section 23(a22(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (subject to Section 3(a) hereof) (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. Only Class A Common Stock shall be issued with respect to Class A Rights and only Class B Common Stock shall be issued with respect to Class B Rights. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement and shall give simultaneous written notice to the Rights Agent stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement and notice to the Rights Agent at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date. The Company shall give the Rights Agent notice of the selection of any Common Stock Equivalent under this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Junior Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 forty-five (45) calendar days after such record date) to subscribe for or purchase Junior Preferred Stock (or shares securities having substantially the same rights, privileges and preferences as the shares of Junior Preferred Stock ("equivalent preferred stockEquivalent Junior Preferred Stock")) or securities convertible into the Junior Preferred Stock or equivalent preferred stock Equivalent Junior Preferred Stock) at a price per share of the Junior Preferred Stock or per share of equivalent preferred stock Equivalent Junior Preferred Stock (or having a conversion price per share, if a security convertible into the Junior Preferred Stock or equivalent preferred stockEquivalent Junior Preferred Stock) less than the Current Market Price (as determined pursuant to defined in Section 11(d) hereof) per share of the Junior Preferred Stock or Equivalent Junior Preferred Stock, as the case may be) 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, of which the numerator of which shall be the number of shares of Junior Preferred Stock outstanding on such record date, date plus the number of shares of Junior Preferred Stock or Equivalent Junior Preferred Stock which the aggregate offering price of the total number of shares of Junior Preferred Stock and/or equivalent preferred stock or Equivalent Junior Preferred Stock 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, Price and of which the denominator of which shall be the number of shares of Junior Preferred Stock outstanding on such record date, date plus the number of additional shares of Junior Preferred Stock and/or equivalent preferred stock Equivalent Junior Preferred Stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the RightsAgent. Shares of Junior Preferred Stock 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 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 Junior Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash indebtedness or assets (other than a regular quarterly periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Junior Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)), but including any dividendthe 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, of which the numerator shall be the Current Market Price per share of Junior Preferred Stock (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 or of such subscription rights or warrants applicable to one share of Junior Preferred Stock and of which the denominator shall be such Current Market Price per share of Junior Preferred Stock. 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.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof), the "Current Market Price" per share of Class A Common Stock or Class B Common Stock, as the case may be, on any date shall be deemed to be the average of the daily closing prices per share of such the Class A Common Stock or the Class B Common Stock, as the case may be, for the 30 thirty (30) consecutive Trading Days (as such term is hereinafter defineddefined in this paragraph (d)) immediately prior to but not including such date, date and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Class A Common Stock or Class B Common Stock, as the case may be, on any date shall be deemed to be the average of the daily closing prices per share of such the Class A Common Stock or the Class B Common Stock, as the case may be, for the 10 ten (10) consecutive Trading Days immediately following but not including such date; provided, however, that in the event that the Current Market Price per share of the Class A Common Stock or Class B Common Stock, as the case may be, is determined during a the period following the announcement by the issuer of such Class A Common Stock or Class B Common Stock, as the case may be, of (A) a dividend or distribution on such Class A Common Stock or Class B Common Stock, as the case may be, payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchof
Appears in 1 contract
Samples: Rights Agreement (Sequa Corp /De/)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. RIGHTS The Purchase Price, the number and kind of shares Preferred Stock covered by each Right and each Second Right and the number of Rights and Second 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 Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, Preferred Stock or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (Stock, including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), and except as otherwise provided in this Section 11(a) and in Section 7(e7(f) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock issuable on such date, shall be proportionately adjusted so that the holder of any Right and any Second Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right or Second Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he the holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right or one Second Right, as the case may be, be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right or one Second Right, as the case may be. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, to any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) Subject to Section 24 of this Agreement, at the close of business on the tenth (10th) day after the Stock Acquisition Date, or such later date as may be provided by the Board of Directors under the terms of Section 23(a), ("Flip-In Event"), proper provision shall be made so that each holder of a Right and/or a Second Right, except as provided in Section 7(f) hereof, 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 shares of Preferred Stock, such number of shares of Common Stock of the Company, such number of shares being referred to herein as the "Adjustment Stock", as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-hundredth of a share of Preferred Stock for which a Right or a Second Right, as the case may be, is then exercisable and dividing that product by (y) 50% of the current per share market price, determined pursuant to Section 11(d) hereof, of Common Stock on the date on which the first of the events listed above in this subparagraph (ii) occurs. In the event that:
(A) that any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have shall become an Acquiring Person is and the Rights or the Second Rights shall then be outstanding, the Company shall not take any action which would eliminate or diminish the benefits intended to be afforded by the Rights and/or the Second Rights.
(iii) The right to buy Common Stock of the Company pursuant to subparagraph (ii) of this paragraph (a) shall not arise as a transaction set forth in Section 13(a) hereof, or is result of any Person becoming an acquisition of shares Acquiring Person through a purchase of Common Stock pursuant to a tender offer or an exchange made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that such tender offer shall provide for the acquisition of all of the outstanding shares of Common Stock held by any Person other than such Person and its Affiliates or Associates at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the CompanyCompany and who are not representatives, nominees, Affiliates or Associates of an Acquiring Person, after receiving advice from one or more investment banking firmsor financial advisers, to be (xA) fair to stockholders (from a financial perspective, taking into account all factors which such members of the Board deem relevant) and relevant including, without limitation, prices which could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value, or (yB) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Companyemployees, after reasonable inquiry customers and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and communities in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement does business.
(or, if the Board of Directors so determines, after the date of this Agreement), then in iv) In the event that the number of shares of there shall not be sufficient Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient unissued to permit the exercise in full of the Rights and/or Second Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: ; (A) determine the excess of (1) the value of the Adjustment Shares Stock issuable upon the exercise of a Right or a Second Right, as the case may be, (the "Current Value") ), over (2) the Purchase Price (Price, such excess being hereinafter referred to herein as the "Spread"), and (B) with respect to each RightRight or each Second Right as the case may be, make adequate provision to substitute for the such unavailable Adjustment SharesStock, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (includingCompany, including without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents"))Preferred Stock, (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having foregoing, having, together with the Adjustment Stock issued upon exercise of such Right or such Second Right, as the case may be, an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if if, within 30 days following the date of the Flip-In Event, the Company shall have not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date")above, then the Company shall be obligated to deliver, upon the surrender for exercise of a Right or a Second Right and without requiring payment of the Purchase Price, shares of Common Stock (Stock, to the extent such shares are available) , and then, if necessary, cash, which shares and/or or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights and/or the Second Rights, the 30 30-day period set forth above may be extended to the extent necessary, but not more than 90 120 days after following the Section 11(a)(ii) Trigger Datedate of the occurrence of the Flip-In Event, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (shares; such period, as it may be extended, hereinafter referred to as the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. ." To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or or second sentences of this Section 11(a)(iii11(a)(iv), the Company (xA) shall provide, subject to Section 7(e11(a)(ii) hereof, that such action shall apply uniformly to all outstanding Rights and Second Rights, and (yB) may suspend the that exercisability of the Rights and Second Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights and the Second Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred StockShares, (C) combine the outstanding Preferred Stock Shares into a smaller number of shares, Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Shares (including any such reclassification in connection with a consolidation consolidation, merger or merger statutory share exchange in which the Company is the continuing continuing, surviving or surviving acquiring corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock issuable on such datedate pursuant to the exercise of the Rights, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effecteffect (and any applicable transfer taxes), the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Shares transfer books of the Company were open, he such holder would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In Subject to Section 24 of this Agreement, in the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have shall become an Acquiring Person is (other than (A) pursuant to any Section 13 Event occurring after the Distribution Date or within 15 days prior thereto or (B) as a transaction set forth in Section 13(a) hereof, or is result of an acquisition of shares Common Shares of Common Stock the Company pursuant to a tender offer or an exchange offer for all outstanding shares Common Shares of Common Stock the Company at a price and on terms determined by the Board of Directors of the Company, at least a time when a majority of the members of the Board of directors then serving are Continuing Directors who are not officers of the Company, and after receiving advice from one or more investment banking firms, to be (x1) fair to stockholders shareholders (taking into account all factors which such members of the Board deem of Directors deems relevant) ), and (y2) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of shareholders and which the Board of Directors who are not officers determines to recommend to the shareholders of the Company), after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, proper provision shall be made so that each holder of a Right (except as provided below and in Right, subject to Section 7(e) hereof) 11(a)(iii), shall thereafter have the a right to receive, upon exercise thereof at by payment of the amount equal to the product of the number of one one-hundredths of a Preferred Share which would otherwise be issuable upon exercise of a Right and the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred StockShares, such number of shares of Common Stock Shares of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock Share for which one a Right was is exercisable immediately prior to the first occurrence of a the Section 11(a)(ii) Event, Event and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority by 50% of the members current per share market price of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument Common Shares (determined pursuant to which the Company is a party Section 11(d) hereof) on the date of this Agreement (or, if the Board of Directors so determines, such occurrence. From and after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event or a Section 13 Event, any Rights that are beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) or were beneficially owned by any Acquiring Person (or any Associate or Affiliate thereof) after the Acquiring Person became an Acquiring Person shall become null and (y) the date on which the Company's right void without any further action and no holder of redemption such Rights shall thereafter have any rights to exercise such Rights or any other rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. No Right Certificate shall be issued pursuant to Section 23(a) expires (3 that represents Rights that would be void pursuant to the later preceding sentence; no Right Certificate shall be issued at any time upon the transfer of (x) any Rights to an Acquiring Person or any Associate or Affiliate of such Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate of such an Acquiring Person or to any nominee of such Acquiring Person, Associate or Affiliate; and (y) being referred any Right Certificate delivered to herein as the "Rights Agent for transfer to an Acquiring Person or any Associate or Affiliate of such an Acquiring Person whose Rights would be void pursuant to the preceding sentence shall be canceled. The Company shall use all reasonable efforts to insure that the provisions of this Section 11(a)(ii) Trigger are complied with, but shall have no liability to any holder of a Right Certificate or other Person as a result of its failure in good faith to make any determinations with respect to an Acquiring Person or its Affiliates or Associates.
(iii) If, on the date of the occurrence of a Section 11(a)(ii) Event (the "Adjustment Date"), the Company does not have sufficient authorized, unissued and unreserved Common Shares available to permit the exercise in full of all Rights that are exercisable on the Adjustment Date for the number of Common Shares per Right provided for in Section 11(a)(ii), then the Exercise Price (as defined below) and the number of Common Shares to be delivered by the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be further adjusted as provided in this subparagraph (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iiiiii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Samples: Share Rights Agreement (Tennant Co)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares one one-thousandths of a share of Preferred Stock covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare authorize a dividend on the Preferred Stock payable in shares of the Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, receive upon payment of the Purchase Price then in effect, effect the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock (or Common Stock) transfer books of the Company were open, he or she would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In Subject to Sections 23 and 24 of this Agreement, in the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become Person becomes an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the a right to receive, upon exercise thereof at a price equal to the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price multiplied by the then number of one one-thousandths of a share of Preferred Stock for which such Right is then exercisable, in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock, such number of shares of the Common Stock of the Company as shall equal the result obtained by (1) multiplying the then current Purchase Price by the number of one Right was exercisable immediately prior to the first occurrence one-thousandths of a Section 11(a)(ii) Event, share of Preferred Stock for which a Right is then exercisable and (y) dividing that product by (which, following 2) 50% of the then current per share market price of the Common Stock of the Company (determined pursuant to Section 11(d) hereof) on the date of the occurrence of such first occurrence, shall thereafter be event (such number of shares are hereinafter referred to as the "Purchase Price" for each Right Adjustment Shares"). From and for all purposes after the occurrence of such event, any Rights that are or were acquired or beneficially owned by any Acquiring Person (or any Associate or Affiliate of such Acquiring Person) shall be null and void, and any holder of such Rights shall thereafter have no right to exercise such Rights under any provision of this Agreement). No Right Certificate shall be issued pursuant to Section 3 hereof that represents Rights beneficially owned by an Acquiring Person whose rights would be null and void pursuant to the preceding sentence or any Associate or Affiliate thereof. No Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be null and void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate. Any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be null and void pursuant to the preceding sentence shall be canceled.
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation charter but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (shall take all such excess being referred action as may be necessary to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as authorize additional shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities for issuance upon exercise of the CompanyRights, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of and the Company based upon may, in the advice discretion of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, howeverand shall, if in the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then event the Company shall be obligated unable to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (take all such action as may be necessary to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient authorize such additional shares of Common Stock could be authorized Stock, substitute, for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a each share of Common Stock shall that would otherwise be issuable upon exercise of a Right, a number of shares of Preferred Stock or fraction thereof such that the Current Market Price (as determined pursuant to Section 11(d) hereof) current per share market price of one share of Preferred Stock multiplied by such number or fraction is equal to the current per share market price of one share of Common Stock as of the Common date of issuance of such share of Preferred Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such dateor fraction thereof.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares securities having substantially the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stockEquivalent Preferred Stock")) or securities convertible into Preferred Stock or equivalent preferred stock Equivalent Preferred Stock at a price per share of Preferred Stock or per share of equivalent preferred stock Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stockEquivalent Preferred Stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) then current per share market price of the Preferred Stock or Equivalent Preferred Stock, as the case may be, 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 shares of Preferred Stock outstanding on such record date, date plus the number of shares of Preferred Stock or Equivalent Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock 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, current market price and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, date plus the number of additional shares of Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash indebtedness or assets (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11 (b) hereof), but including any dividendthe 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 then current per share market price of the Preferred Stock 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 or of such subscription rights or warrants applicable to one share of Preferred Stock and the denominator of which shall be such current per share market price of the Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock to the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" current per share market price" of Common Stock any security (a "Security" for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Security for the 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(but not including) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price current per share market price of the Common Stock Security is determined during a the period following the announcement by the issuer of such Common Stock Security of (A) a dividend or distribution on Common Stock such Security payable in shares of Common Stock such Security or securities convertible into such shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common StockSecurity, and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, after the ex-dividend date for such dividend vidend 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Samples: Shareholder Rights Agreement (Mack Cali Realty Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Common Stock payable in shares of Preferred Common Stock, (B) subdivide the outstanding Preferred Common Stock, (C) combine the outstanding Preferred Common Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Common Stock (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 in Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Common Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Common Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Common Stock transfer books of the Company were open, he such holder would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, to any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) In the event that:
any Person (A) other than the Company, any PersonSubsidiary of the Company, shallany employee benefit plan of the Company or of any Subsidiary of the Company, at or any time after entity organized, appointed or established by the Rights Dividend Declaration DateCompany for or pursuant to the terms of any such plan), be alone or together with its Affiliates and Associates, shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) , the Purchase Price for each share of Common Stock, upon the exercise of each Right which has not theretofore been exercised, shall thereafter have the right be equal to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x1) multiplying the then current Purchase Price by the then number of one one-thousandths shares of a share of Preferred Common Stock for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y2) dividing that product by 50% of the current market price (whichdetermined pursuant to Section 11(d) hereof) per share of Common Stock as of the Stock Acquisition Date in question (unless such Purchase Price would be higher than the Purchase Price under Section 7(b), following such first occurrenceas adjusted without regard to this Section 11(a)(ii)); PROVIDED, HOWEVER, that if the transaction that would otherwise give rise to the foregoing adjustment also constitutes an event described in Section 13(a), then only the provisions of Section 13 shall thereafter apply and no adjustment shall be referred made pursuant to as the "Purchase Price" for each Right and for all purposes of this AgreementSection 11(a)(ii).
(iii) Unless at least a majority In lieu of the members issuing shares of Common Stock in accordance with Section 11(a)(ii) hereof, the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (ormay, if the Board of Directors so determines, after determines in its discretion (as evidenced by the date vote of this Agreement), a majority of the Directors then in office) that such action is necessary or appropriate and not contrary to the event that the number interests of shares holders of Common Stock which are authorized by the Company's articles Rights, elect to issue or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)pay, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right the Rights, cash (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in including an offset against the Purchase Price), (3) Common Stock or other equity securities of the Company (includingproperty, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents"))Stock, (4) debt other securities of the Company, (5) other assets, or (6) any combination of the foregoing thereof having an aggregate value equal to the Current Valuevalue of the shares of Common Stock which otherwise would have been issuable pursuant to Section 11(a)(ii), where such aggregate which value has been shall be determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Company's Board of Directors (as determined by the Board in its discretion by the vote of a majority of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"Directors then in office), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment . For purposes of the Purchase Pricepreceding sentence, shares the value of Common Stock (to the extent available) and then, if necessary, cash, any preferred stock which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors determines to be a "common stock equivalent" shall be deemed to have the same value as the Common Stock. Any such election by the Board of Directors must be made and publicly announced within 90 days of the Company shall determine relevant Stock Acquisition Date. Following the occurrence of an event described in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company Board of Directors may (xas determined in its discretion by the vote of a majority of the Directors then in office) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until for a period of up to 90 days following the expiration occurrence of such event to the Substitution Period in order extent that the Board of Directors has not determined whether to seek any authorization exercise its rights of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereofelection under this paragraph (a)(iii). In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Common Stock entitling them to subscribe for or purchase (for a period expiring within 45 forty-five (45) calendar days after such record date) Preferred Common Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock Common Stock) at a price per share of Preferred Common Stock or per share of equivalent preferred stock (or having a conversion price per shareshare of Common Stock, if a security convertible into Preferred Stock or equivalent preferred stockCommon Stock) less than the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of Preferred Common Stock 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 shares of Preferred Common Stock outstanding on such record date, plus the number of shares of Preferred Common Stock which the aggregate offering price of the total number of shares of Preferred Common Stock and/or equivalent preferred stock so to be offered for subscription or purchase (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price, current market price and the denominator of which shall be the number of shares of Preferred Common Stock outstanding on such record date, plus the number of additional shares of Preferred Common Stock and/or equivalent preferred stock 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 by delivery of in a consideration part or all of which may 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 (as evidenced by the vote of a majority of the Company, Directors then in office) whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the RightsAgent. Shares of Preferred Common Stock 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 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 a distribution to all holders of Preferred Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Common Stock, but including any dividenddividend payable in stock other than Common Stock) or subscription rights 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 (as determined pursuant to Section 11(d) hereof) per share of Common Stock on such record date, less the fair market value, as determined in good faith by the Board of Directors (as evidenced by the vote of a majority of the Directors then in office) whose determination shall be described in a statement filed with the Rights Agent, of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Common Stock and the denominator of which shall be such current market price (as determined pursuant to Section 11(d) hereof) per share of Common Stock. 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 be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 30 thirty (30) consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, howeverHOWEVER, that in the event that the Current Market Price current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 thirty (30) Trading Day or 10 Trading Day period, as set forth above, period after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current Market Pricecurrent 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 NYSE New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the NYSENew 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 shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock are not listed or admitted to trading on any national securities exchange, the last quoted sale 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 Dealers, Inc. Automated Quotation System ("NASDAQ") National Market or such other system then in use, or, if on any such date, date the shares of Common Stock are not quoted by any suchsuch organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Common Stock selected by the Board. If on any such date no market maker is making a market in the Common Stock, the fair value of such shares on such date, as determined in good faith by the
Appears in 1 contract
Samples: Rights Agreement (Norstan Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES SHARES, OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section SECTION 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide subdivides the outstanding Preferred Stock, (C) combine combines the outstanding Preferred Stock into a smaller number of shares, or (D) issue issues any shares of its capital stock in a reclassification of the Preferred Stock (including including, without limitation, 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 SECTION 11(a) and Section SECTION 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination combination, or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall will be proportionately adjusted so that the holder of any Right exercised after such time shall will be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, whichthat, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, or reclassification. If an event occurs which that would require an adjustment under both this Section SECTION 11(a)(i) and Section SECTION 11(a)(ii) hereof), the adjustment provided for in this Section SECTION 11(a)(i) shall will be in addition to, and shall will be made prior to, any adjustment required pursuant to Section SECTION 11(a)(ii) hereof).
(ii) In the event that:
(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, (1) merges from, with, or into the Company or otherwise combines with the Company and the Company is the continuing or surviving Person of such merger or combination and the Common Stock of the Company or other equity securities of the Company remain outstanding, (2) in one transaction or a series of transactions, transfers any assets to the Company or to any of the Company's Subsidiaries in exchange (in whole or in part) for Common Stock, for shares of other equity securities of the Company, or for securities exercisable for or convertible into shares of equity securities of the Company (Common Stock or otherwise) or otherwise obtains from the Company, with or without consideration, any additional shares of such equity securities or securities exercisable for or convertible into shares of such equity securities (other than pursuant to a pro rata distribution to all holders of Common Shares), (3) sells, purchases, leases, exchanges, mortgages, pledges, transfers, or otherwise acquires or disposes of assets in one transaction or a series of transactions, to, from, or with (as the case may be) the Company or any of the Company's Subsidiaries, on terms or conditions less favorable in any respect 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 Section 13 Event, (4) sells, purchases, leases, exchanges, mortgages, pledges, transfers, or otherwise acquires or disposes of assets or earning power aggregating more than 50% of the assets or earning power of the Company and its Subsidiaries (taken as a whole) in one transaction or a series of transactions to, from, or with (as the case may be) the Company or any of the Company's Subsidiaries (other than incidental to the lines of business, if any, engaged in as of the date of this Agreement between the Company or such Subsidiary, on the one hand, and such Acquiring Person or such Associate or Affiliate, on the other), other than pursuant to a Section 13 Event, (5) receives any compensation from the Company or any of the Company's Subsidiaries other than compensation for full-time employment as a regular employee at rates in accordance with the Company's (or such Subsidiaries') past practices, or (6) receives the benefits, directly or indirectly (except proportionately as a stockholder and as a result of any requirement of law or governmental regulation), 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 the Company's Subsidiaries;
(B) any Person, shallalone or together with its Affiliates or Associates, at any time after the Rights Dividend Declaration Date, be or become becomes an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a13 Event; or
(C) hereof, or during such time as there is an acquisition Acquiring Person, there is any reclassification of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers securities (including any reverse stock split), recapitalization of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests any merger or consolidation of the Company into, from, or with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries, other than a Section 13 Event, or series of such events (whether or not with or into or otherwise involving and its stockholdersAcquiring Person) that has the effect, or
(B) (directly or indirectly, of increasing by more than 1) at least a majority % the proportionate share of the members outstanding shares of any class of equity securities (or securities convertible into such equity securities) of the Board Company or any of Directors who are not officers its Subsidiaries that is directly or indirectly beneficially owned by an Acquiring Person or any Associate or Affiliate of the Company, after reasonable inquiry and investigation, any Acquiring Person. then, promptly following the first occurrence of any a Section 11(a)(ii) Event, proper provision will be made so that each holder of a Right (except as provided below in this SECTION 11(a)(ii) and in Section SECTION 7(e)) hereof) shall will thereafter have the right to receive, upon exercise thereof of such Right at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal equals the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall will thereafter be referred to as the "Purchase PricePURCHASE PRICE" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to SECTION 11(d)) per share of Common Stock on the date of such first occurrence (such number of shares, the "ADJUSTMENT SHARES").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which that are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(aSECTION 11(a)(ii), the Company shall: will (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "SpreadCURRENT VALUE"), and (B) with respect to each RightRight (subject to SECTION 7(e)), make adequate provision to substitute for the Adjustment Shares, upon the exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which stock, such as the Preferred Stock, that the Board of Directors of the Company has deemed to have substantially essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock securities being referred to herein as "common stock equivalentsCOMMON STOCK EQUIVALENTS")), (4) debt securities of the Company, (5) other assetsassets or property, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current ValueValue (less the amount of any reduction in the Purchase Price), where such aggregate value has been conclusively determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyDirectors; provided, however, that if the Company shall has not have made adequate provision to deliver value pursuant to clause CLAUSE (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section SECTION 23(a) expires (the later of (x) and (y) being referred to herein as the "Section SECTION 11(a)(ii) Trigger DateTRIGGER DATE"), then the Company shall will be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock Stock, (to the extent available) and then, if necessary, cash, which shares and/or or cash have an aggregate value equal to the Spread. For purposes of the preceding sentence, the term "SPREAD" means the excess of (i) the Current Value over (ii) the Purchase Price. If the Board of Directors of the Company shall determine determines in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such thirty (30) day period, as it may be extended, being the "Substitution PeriodSUBSTITUTION PERIOD"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need is to be (and may be) taken pursuant to the first and/or second or third sentences of this Section SECTION 11(a)(iii), the Company (x1) shall will provide, subject to Section SECTION 7(e) hereof), that such action shall will apply uniformly to all outstanding Rights, and (y2) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any such shareholder approval for such authorization of additional shares and/or or to decide determine the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereofof such distribution. In the event of any such suspension, the Company shall will issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section SECTION 11(a)(iii), the value of a share of Common Stock shall each Adjustment Share will be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock Stock, on the Section 11(a)(ii) Trigger Date and the per share or per unit value of any "common stock equivalent" shall Common Stock Equivalent will be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that equal the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such.
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares or other property covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Common Shares payable in shares of Preferred StockCommon Shares, (B) subdivide the outstanding Preferred StockCommon Shares, (C) combine the outstanding Preferred Stock Common Shares (by reverse stock split or otherwise) into a smaller number of sharesCommon Shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, in each such event, except as otherwise provided in this Section 11(a) and Section 7(e) hereof: (1) each of the Rights outstanding at the time of the record date for such dividend or the effective date of such subdivision, combination or reclassification shall be proportionately adjusted to that number of Rights (calculated to the nearest one ten-thousandth (1/10,000) of a Right) equal to a fraction (the "EXCHANGE RATIO"), the numerator of which shall be the total number of Common Shares or shares of capital stock issued in such reclassification of the Common Shares outstanding immediately following such time and the denominator of which shall be the total number of Common Shares outstanding immediately prior to such time, and the number of Rights that shall thereafter be issued with respect to each Common Share or share of such other capital stock that shall become outstanding thereafter prior to the Distribution Date shall be equal to the total number of outstanding Rights immediately after such event (as adjusted pursuant to this clause (1)) divided by the total number of outstanding Common Shares or shares of such other capital stock immediately after such event (subject to further adjustment pursuant to the provisions of this Agreement); (2) the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification shall be adjusted so that the Purchase Price thereafter shall equal the result obtained by dividing the Purchase Price in effect immediately prior to such time by the Exchange Ratio; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of such Right; and (3) the number of Preferred Shares or shares of such other capital stock issuable upon the exercise of each Right shall remain unchanged immediately after such event, but, in the event of a reclassification, and the number and kind of shares issuable upon the exercise of each Right immediately after such reclassification shall be adjusted to be the kind of shares of Preferred Stock or such other capital stockstock issued in such reclassification, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of rather than Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassificationShares. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to Section 24 of this Agreement, in the event that:
(A) any Persona Triggering Event shall have occurred, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, then promptly following the first occurrence of any Section 11(a)(ii) such Triggering Event, proper provision shall be made so that each holder of a Right (Right, except as provided below and in Section 7(e) hereof) , shall thereafter have the right to receivereceive for each Right, upon exercise thereof at the then current Purchase Price in accordance with the terms of this AgreementAgreement and payment of the then-current Total Exercise Price, in lieu of a number of one one-thousandths of a share of Preferred StockShare, such number of shares of Common Stock Shares of the Company Com- pany as shall equal the result obtained by (x) multiplying the then then-current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock Share for which one a Right was exercisable (or would have been exercisable if the Distribution Date had occurred) immediately prior to the first occurrence of a Section 11(a)(ii) Triggering Event, and (y) dividing that product by 50% of the current per share market price (which, following determined pursuant to Section 11(d) hereof) for Common Shares on the date of occurrence of the Triggering Event (such first occurrence, shall thereafter be number of shares being hereinafter referred to as the "Purchase Price" for each Right and for all purposes of this AgreementADJUSTMENT SHARES").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers The right to buy Common Shares of the Company determine that the following is pursuant to Section 11(a)(ii) hereof shall not permitted by the terms arise as a result of any agreement or instrument Person becoming an Acquiring Person through an acquisition of Common Shares pursuant to which a Permitted Offer.
(iv) In lieu of issuing Common Shares in accordance with Section 11(a)(ii) hereof, the Company is a party on the date of this Agreement (ormay, if the Board of Directors so determinesdetermines that such action is necessary or appropriate and not contrary to the interest of holders of Rights (and, after the date of this Agreement), then in the event that the number of shares of Common Stock Shares which are authorized by the Company's articles or certificate Articles of incorporation Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with Rights, or if any necessary regulatory approval for such issuance has not been obtained by the foregoing subparagraph (ii) of this Section 11(a)Company, the Company shall: ): (A) determine the excess of (1) the value of the Adjustment Common Shares issuable upon the exercise of a Right (the "Current ValueCURRENT VALUE") over (2) the Purchase Price (such excess being referred to herein as excess, the "SpreadSPREAD"), ) and (B) with respect to each Right, make adequate provision to substitute for the Adjustment such Common Shares, upon payment exercise of the applicable Purchase PriceRights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, shares or units of shares, shares of preferred stock any series of Preferred Stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock Shares (such shares or units of preferred stock being referred to shares of Preferred Stock are herein as called "common stock equivalentsCOMMON STOCK EQUIVALENTS")), except to the extent that the Company has not obtained any necessary stockholder or regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary stockholder or regulatory approval for such issuance, (5) other assets, assets or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; providedPROVIDED, howeverHOWEVER, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Triggering Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(iiSECTION 11(A)(II) Trigger DateTRIGGER DATE"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock Shares (to the extent available) ), except to the extent that the Company has not obtained any necessary stockholder or regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock Shares could be authorized for issuance upon exercise in full of the RightsRights or that any necessary regulatory approval for such issuance will be obtained, the 30 thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution PeriodSUBSTITUTION PERIOD"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii11(a)(iv), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares shares, to take any action to obtain any required regulatory approval and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii11(a)(iv), the value of a share of the Common Stock Shares shall be the Current Market Price current per share market price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalentCOMMON STOCK EQUIVALENT" shall be deemed to have the same value as the Common Stock Shares on such date.
(b) In case the Company shall shall, at any time after the date of this Agreement, fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock Common Shares or of any class or series of Equivalent Shares entitling them to subscribe for or purchase such holders (for a period expiring within 45 forty-five (45) calendar days after such record date) Preferred Stock (to subscribe for or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) purchase Common Shares or Equivalent Shares or securities convertible into Preferred Stock Common Shares or equivalent preferred stock Equivalent Shares at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock Common Shares or equivalent preferred stockEquivalent Shares) less than the Current Market Price then current per share market price of the Common Shares or Equivalent Shares (as determined pursuant to defined in Section 11(d)) hereof) per share of Preferred Stock on such record date, then, in each such case, 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 shares of Preferred Stock Common Shares and Equivalent Shares (if any) outstanding on such record date, plus the number of shares of Preferred Stock Common Shares or Equivalent Shares, as the case may be, which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock Common Shares or Equivalent Shares, as the case may be, 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 Pricecurrent market price, and the denominator of which shall be the number of shares of Preferred Stock Common Shares and Equivalent Shares (if any) outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock Common Shares or Equivalent Shares, as the case may be, to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid by delivery of in a consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Common Shares of Preferred Stock and Equivalent Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights 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 shall, at any time after the date of this Agreement, fix a record date for the making of a distribution to all holders of Preferred Stock the Common Shares or of any class or series of Equivalent Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash indebtedness or assets (other than a regular quarterly cash dividend out of the earnings dividend, if any, or retained earnings of the Company), assets (other than a dividend payable in Preferred StockCommon Shares) or subscription rights, but including any dividendoptions or warrants (excluding those referred to in Section 11(b)), then, in each such case, 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 (as determined pursuant to Section 11(d) hereof) of a Common Share or an Equivalent Share 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 cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a Common Share or Equivalent Share, as the case may be, and the denominator of which shall be such current market price (as determined pursuant to Section 11(d) hereof) of a Common Share or Equivalent Share on such record date. 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 be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii11(a)(iv) hereof, the "Current Market PriceCURRENT PER SHARE MARKET PRICE" per share of Common Stock any security (a "SECURITY" for the purpose of this Section 11(d)) on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Security for the 30 thirty (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)(iii11(a)(iv) hereof, the "Current Market PriceCURRENT PER SHARE MARKET PRICE" per share of Common Stock any Security on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Security for the 10 ten (10) consecutive Trading Days immediately following prior to such date; providedPROVIDED, howeverHOWEVER, that in the event that the Current Market Price current per share market price of the Common Stock Security is determined during a period following the announcement by the issuer of such Common Stock Security of (Ai) a dividend or distribution on Common Stock such Security payable in shares of Common Stock such Security or securities convertible into such shares of Common Stock (other than the Rights), or (Bii) any subdivision, combination or reclassification of such Common StockSecurity, and prior to the expiration of the requisite 30 thirty (30) Trading Day or 10 ten (10) 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" current per share market price shall be properly appropriately adjusted to take into account ex-dividend tradingreflect the current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the NYSE New York Stock Exchange or, if the shares of Common Stock are Security is not listed or admitted to trading on the NYSENew 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 shares of Common Stock are Security is listed or admitted to trading or, if the shares of Common Stock are Security is not listed or admitted to trading on any national securities exchange, the last quoted sale price or, if such last sale price is not so quotedreported, 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchprices
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares shares, or fractions thereof, covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred StockShares, (C) combine the outstanding Preferred Stock Shares into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock 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) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock Shares or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock Shares or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company for the Preferred Shares were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassificationclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof); PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of Rights be less than the aggregate par value of the capital stock of the Company issuable upon exercise of such Rights.
(ii) In the event that:
(A) Subject to Section 24 of this Agreement, if any Person, shallalone or together with his Affiliates and Associates, at any time after the Rights Dividend Declaration Date, be or shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to then proper provision shall be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, made so that each holder of a Right (Right, except as provided below and in Section 7(e) hereof) below, shall thereafter have the right to receive, upon exercise thereof at the then then-current Purchase Price in accordance with the terms of this Agreement, in lieu of a the number of one one-thousandths hundredths of a share of Preferred StockShare for which such Right was otherwise then exercisable, such number of shares of Common Stock of the Company Shares as shall equal the result obtained by (x) multiplying the then then-current Purchase Price by the then number of one one-thousandths one- hundredth of a share of Preferred Stock Share for which one a Right was then exercisable immediately prior to the first occurrence of a such Section 11(a)(ii) Event, and (y) dividing that product by 50% of the Current Market Price per Common Share (which, following determined pursuant to Section 11(d) hereof) on the date of such first occurrence, shall thereafter be occurrence (such number of shares being hereinafter referred to as the "Purchase Price" ADJUSTMENT SHARES"). Notwithstanding anything in this Agreement to the contrary, from and after the first occurrence of a Section 11(a)(ii) Event, any Rights Beneficially Owned by (i) an Acquiring Person, or an Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either (A) a transfer (whether or not for each Right and for all purposes consideration) from the Acquiring Person to holders of equity interests in such Acquiring Person or to any Person with whom the Acquiring Person has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer which the Board of Directors of the Company has determined is part of a plan, arrangement or understanding which has as a primary purpose or effect the avoidance of this AgreementSection 11(a)(ii), shall become null and void without any further action and no holder of such Rights shall have any rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. No Right Certificate shall be issued pursuant to Section 3 that represents Rights beneficially owned by an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof; no Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof shall be canceled. The Company shall use all reasonable efforts to insure that the provisions of this Section 11(a)(ii) and Section 4(b) 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 any of their respective Affiliates, Associates or transferees hereunder.
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that If the number of shares of Common Stock Shares which are authorized by the Company's articles or certificate Certificate of incorporation but Incorporation, as amended, and not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are Rights, is not sufficient to permit the exercise in full of the Rights in accordance with Section 11(a)(ii), or should the foregoing subparagraph (ii) Board of this Section 11(a)Directors so elect, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current ValueCURRENT VALUE") over (2) the Purchase Price attributable to a Right (such excess being referred to herein as excess, the "SpreadSPREAD"), ) and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, sharesPreferred Shares, or units of sharesPreferred Shares, of preferred stock which the Board of Directors of the Company has deemed determined to have substantially the same value as shares of Common Stock Shares (such shares of preferred stock being referred to herein as Preferred Shares, "common stock equivalentsCOMMON STOCK EQUIVALENTS")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by action of the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyDirectors; providedPROVIDED, howeverHOWEVER, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date")Event, then the Company shall be obligated to deliver, upon the surrender for exercise of a Right Certificate and without requiring payment of the Purchase Price, shares of Common Stock Shares (to the extent available) and thenand, if necessary, cash, which shares securities and/or cash have an assets that in the aggregate value are equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock Shares could be authorized for issuance upon exercise in full of the Rights, the 30 thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 one hundred twenty (120) days after the first occurrence of a Section 11(a)(ii) Trigger DateEvent, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, period as it may be extended, the "Substitution PeriodSUBSTITUTION PERIOD"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines as provided above that some action need is to be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof11(a)(ii), that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such the first sentence of this Section 11(a)(iii) and to determine the value thereof. In the event of any such suspension, the Company shall deliver notice to the Rights Agent and issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as deliver notice to the Rights Agent and issue a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock Shares shall be the Current Market Price per Common Share (as determined pursuant to Section 11(d11(d)(i)) hereof) per share on the date of the Common Stock on first occurrence of the event described in Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" Common Stock Equivalents shall be deemed to have the same value as the Common Stock Shares on such date.
(b) In case If the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) date to subscribe for or purchase Preferred Stock Shares (or shares having the same rights, privileges and or preferences as the shares of Preferred Stock Shares ("equivalent preferred stockEQUIVALENT PREFERRED STOCK")) or securities convertible into Preferred Stock Shares or equivalent preferred stock Equivalent Preferred Stock) at a price per share of Preferred Stock Share or per share of equivalent preferred stock Equivalent Preferred Stock (or having a conversion or exercise price per share, if a security convertible into or exercisable for Preferred Stock Shares or equivalent preferred stockEquivalent Preferred Stock) less than the Current Market Price per Preferred Share (as determined pursuant to Section 11(d11(d)(ii)) hereof) per share of Preferred Stock on such record date, the Purchase Price 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 Preferred Shares outstanding on such record date plus the number of Preferred Shares which the aggregate offering price of the total number of Preferred Shares and/or Equivalent Preferred Stock 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 Preferred Shares outstanding on such record date, plus the number of additional Preferred Shares and/or Equivalent Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of Rights be less than the aggregate par value of the capital stock of the Company issuable upon exercise of such Rights. 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, whose determination shall be described in a statement filed with the Rights Agent and shall be binding upon the Rights Agent. Preferred 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 if such rights 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) If the Company shall fix a record date for the making of a distribution to all holders of Preferred Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash or other assets (other than a regular quarterly cash dividend or a dividend payable in Preferred Shares, but including any dividend payable on stock other than Preferred Shares) or convertible securities, subscription rights 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 number of shares of Current Market Price per Preferred Stock outstanding Share (as determined pursuant to Section 11(d)(ii) hereof) on such record date, plus date less the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock so to be offered fair market value (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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 CompanyDirectors, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on upon the Rights Agent Agent), of the portion of such evidences of indebtedness, cash or other assets or convertible securities, subscription rights or warrants applicable to one Preferred Share, and the holders denominator of which shall be such Current Market Price per Preferred Share; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of Rights be less than the aggregate par value of the Rights. Shares of Preferred Stock owned by or held for the account capital stock of the Company shall not be deemed outstanding for the purpose issuable upon exercise of any such computationRights. Such adjustment shall be made successively whenever such a record date is fixed, ; and in the event that if such rights or warrants are distribution is not so issuedmade, 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.
(c) In case the Company shall fix a record date for a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" Price per share of Common Stock Share on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Share for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, howeverHOWEVER, that in the event that if the Current Market Price per share of the Common Stock Share is determined during a period following the announcement by the issuer of such Common Stock of Shares (Ax) a dividend or distribution on such Common Stock Shares payable in shares of Common Stock Shares or securities convertible into shares of such Common Stock (other than the Rights), Shares or (By) any subdivision, combination or reclassification of such Common Stock, Shares and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current Market Price" Price per Common Share shall be properly appropriately adjusted to take into account ex-dividend tradingreflect the Current Market Price per share equivalent of such Common Shares. 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Samples: Rights Agreement (Celadon Group Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall -18- be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event that:
(A) any Person, alone or together with its Affiliates and Associates, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to then proper provision shall be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d)(i) hereof) per share of Common Stock on the date of such first occurrence (such number of shares being referred to as the "Adjustment Shares").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate Certificate of incorporation Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: Company, acting by resolution of its Board of Directors shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, Right (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchmake adequate provision to
Appears in 1 contract
Samples: Rights Agreement (Loral Corp /Ny/)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Securities or Number of Rights. The Purchase Price, the number and kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In To preserve the event actual or potential economic value of the Company shall Rights, if at any time after the date of this Rights Agreement (A) declare a dividend on there shall be any change in the Common Stock or the Preferred Stock, whether by reason of stock dividends, stock splits, recapitalizations, mergers, consolidations, combinations or exchanges of securities, split-ups, split-offs, spin-offs, liquidations, other similar changes in capitalization, any distribution or issuance of cash, assets, evidences of indebtedness or subscription rights, options or warrants to holders of Common Stock payable or Preferred Stock, as the case may be (other than distribution of the Rights or regular cash dividends) or otherwise, then, in each such event the Board shall make such appropriate adjustments in the number of shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-division, combination or reclassification, and the number and kind of shares other securities) issuable upon exercise of Preferred Stock or other capital stockeach Right, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then and Redemption Price in effect, effect at such time and the aggregate number and kind of shares Rights outstanding at such time (including the number of Preferred Stock Rights or other capital stock, as fractional Rights associated with each share of Common Stock) such that following such adjustment such event shall not have had the case may be, which, if such Right had been exercised immediately prior to such date and at a time when effect of reducing or limiting the Preferred Stock transfer books benefits the holders of the Company were open, he Rights would have owned upon had absent such exercise and been entitled to receive event. The adjustments provided for in this Section 11(a)(i) shall be made successively whenever such an adjustment is required by virtue of such dividend, subdivision, combination or reclassificationthis Section 11(a)(i). If an event occurs which would will require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares ------------------------------------------------------- or Number of Rights. The Purchase Price, the number and kind of shares and ------------------- other securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on any security of the Preferred Stock Company payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred StockShares, (C) combine the outstanding Preferred Stock Shares into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock 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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock Shares or other capital stock, as the case may be, issuable on such date, shall be proportionately proportionately, adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the adjusted Purchase Price then in effectPrice, the aggregate number and kind of shares of Preferred Stock Shares or other capital stock, as the case may be, whichthat, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Share transfer books of the Company were open, he such holder would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event thatevent:
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, shall, at any time after the Rights Dividend Declaration Stock Acquisition Date, be directly or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Priceindirectly, (1) cash, (2) a reduction in shall merge into the Purchase Price, (3) 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 Stock Shares of the Company or other equity securities of the Company shall remain outstanding, (including2) shall, without limitationin one transaction or a series of transactions, shares, or units of shares, of preferred stock which the Board of Directors of transfer any assets to the Company has deemed or to have substantially the same value as any of its Subsidiaries in exchange (in whole or in part) for Common Shares, for shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt other equity securities of the Company, (5) other assets, or (6) any combination for securities exercisable for or convertible into shares of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors equity securities of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of (Common Shares or otherwise) or otherwise obtain from the Company; provided, howeverwith or without consideration, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient any additional shares of Common Stock could be authorized such equity securities or securities exercisable for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization or convertible into shares of such additional shares equity securities (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken other than pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a pro rata distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the CompanyCommon Shares), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Samples: Rights Agreement (Sei Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event If the Company shall at any time after the date of this Agreement (A) declare pay a dividend on the Preferred Stock payable in shares of Preferred Stock, (BStock,(B) subdivide the outstanding Preferred Stock, (CStock into a greater number of shares,(C) combine the outstanding Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (including any such reclassification in connection with a consolidation or merger in which involving the Company is the continuing or surviving corporationCompany), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of immediately prior to the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock issuable on such date, date shall be proportionately adjusted so that the each holder of any a Right exercised after such time shall (except as otherwise provided herein, including Section 7(d)) thereafter be entitled to receive, upon payment of exercise thereof at the Purchase Price then in effecteffect immediately prior to such date, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock applicable transfer books of the Company were open, he such holder would have owned been entitled to receive upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which would require requires an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he the holder of such Right would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, 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 to, Section 11(a)(ii) hereof.
(ii) In the event thatevent:
(A) any Person, Person shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereofFlip-Over Event, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be be
(xa) at a price which is fair to stockholders the Company's shareowners (taking into account all factors which such members of the Board deem relevantof Directors deems relevant including, without limitation, prices which could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (yb) otherwise in the best interests of the Company and its stockholdersshareowners (a "Qualified Offer"), or
(B) during such time as there is an Acquiring Person, there shall be any reclassification of securities (1) at least a majority of the members of the Board of Directors who are not officers including any reverse stock split), or recapitalization of the Company, after reasonable inquiry and investigationor any merger or consolidation of the Company with any of its Subsidiaries or any other transaction or series of transactions involving the Company or any of its Subsidiaries, other than a transaction or transactions to which the provisions of Section 13(a) apply (whether or not with or into or otherwise involving an Acquiring Person) 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 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, promptly following the first occurrence of any Section 11(a)(ii) such Flip-In Event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths six- hundredths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one onesix-thousandths hundredths of a share of Preferred Stock for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Flip-In Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the current market price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such first occurrence (such number of shares being referred to herein as the "Adjustment Shares").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate Certificate of incorporation Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: :
(A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and and
(B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, that if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) calendar days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-In Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Flip-In Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an in the aggregate value are equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 thirty (30) calendar day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) calendar days after following the Section 11(a)(ii) Flip-In Trigger Date, in order that the Company may seek stockholder shareowner approval for the authorization of such additional shares (such period, as it may be extended, extended being referred to herein as the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock shall be the Current Market Price current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Flip-In Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(iv) If the rules of the national securities exchange, registered as such pursuant to Section 11(a)(ii6 of the Exchange Act, or of the national securities association, registered as such pursuant to Section 15A of the Exchange Act, on which the Common Stock is principally traded would prohibit such exchange or association from listing or continuing to list, or from authorizing for or continuing quotation and/or transaction reporting through an inter-dealer quotation system, the Common Stock or other equity securities of the Company if the Rights were to be exercised for shares of Common Stock in accordance with subparagraph (ii) of this Section 11(a) because such issuance would nullify, restrict or disparately reduce the per share voting rights of holders of Common Stock, the Company shall:
(A) determine the Spread, and
(B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) equity securities of the Company, including, without limitation, "common stock equivalents," other than securities which would have the effect of nullifying, restricting or disparately reducing the per share voting rights of holders of Common Stock, (3) debt securities of the Company, (4) other assets, or (5) any combination of the foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within thirty (30) calendar days following the Flip-In Trigger Date, then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, cash having an aggregate value equal to the Spread. To the extent that the Company determines that some action need be taken pursuant to the first sentence of this Section 11(a)(iv), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights and (y) may suspend the exercisability of the Rights, but not longer than ninety (90) calendar days after the Flip-In Trigger Date, in order to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iv), the value of the Common Stock shall be the current market price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Flip-In Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 forty-five (45) calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchrecord
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.:
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event that:
(A) any Person, shallalone or together with its Affiliates and Associates, at any time after the Rights Dividend Declaration Date, be or shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to then proper provision shall be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall, for a period of 60 days after the later of (i) the occurrence of any such event or (ii) the effective date of an appropriate registration statement under the Act pursuant to Section 9 hereof, have a right to receive, upon exercise thereof at a price equal to the then current Purchase Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company (or, in the discretion of the Board of Directors, one two-hundredths of a share of Preferred Stock) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one two-hundredths of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and (y) dividing that product by 50% of the then current per share market price of the Company's Common Stock (determined pursuant to Section 11(d) hereof) on the date of such first occurrence (such number of shares being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that there shall not be sufficient treasury shares or authorized but unissued (and unreserved) shares of Common Stock to permit the exercise in full of the Rights in accordance with the foregoing Section 11(a)(ii) and the Rights become so exercisable (and the Board has determined to make the Rights exercisable into fractions of a share of preferred stock), notwithstanding any other provision of this Agreement, to the extent necessary and permitted by applicable law, each Right shall thereafter have represent the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of (A) a number of one one-thousandths shares (or fractions of a share of Preferred Stock, such number of shares shares) of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior up to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the maximum number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (iimay permissibly be issued) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment a number of the applicable Purchase Price, (1) cash, (2) one two-hundredths of a reduction in the Purchase Price, (3) Common share of Preferred Stock or a number of (or fractions of) other equity securities of the Company (includingor, without limitationin the discretion of the Board, shares, or units of shares, of preferred stock debt securities) which the Board of Directors of the Company has deemed determined to have substantially the same aggregate current market value (determined pursuant to Sections 11(d)(i) and 11(d)(ii) hereof, to the extent applicable) as shares one share of Common Stock (such number of shares (or fractions of preferred stock being referred to herein as "common stock equivalents")), shares) of Preferred Stock (4) or other equity securities or debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred capital stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Samples: Shareholder Rights Agreement (El Paso Energy Corp/De)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. .
(a) The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of the Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, receive upon payment of the Purchase Price then in effect, effect the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock (or Common Stock and/or other securities) transfer books of the Company were open, he or she would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, any this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this Section adjustment required pursuant to Section section 11(a)(ii) hereof).
(ii) In Subject to Section 24 of this Agreement, in the event that:
(A) any Person, shallalone or together with its Affiliates and Associates, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become becomes an Acquiring Person is except as the result of a transaction set forth in Section 13(a) hereof, or is an acquisition then, prior to the later of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair the date on which the Company's rights of redemption pursuant to stockholders (taking into account all factors which such members of the Board deem relevantSection 23(a) and expire, or (y) otherwise in five (5) days after the best interests date of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any a Section 11(a)(ii) Event, proper provision shall be made so that each holder of a Right (Right, except as provided below and in Section 7(e) hereof) , shall thereafter have the a right to receive, upon exercise thereof at the then current Purchase Price for the number of one one-hundredths of a share of Preferred Stock for which such Right is then exercisable in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share shares of Preferred Stock, such number of shares of the Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) dividing that product 50% of the Current Market Price per share of the Common Stock of the Company (which, following determined pursuant to Section 11(d)) on the date of the occurrence of the event listed above in this subparagraph (ii) (such first occurrence, shall thereafter be number of shares are hereinafter referred to as the "Adjustment Shares") provided that the Purchase Price" for each Right Price and for all purposes the number of Adjustment Shares shall be further adjusted as provided in this Agreement)Agreement to reflect any events occurring after the date of such first occurrence.
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate Amended and Restated Articles of incorporation Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as excess, the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon exercise of the Rights and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which a majority of the Independent Directors and the Board of Directors of the Company has have deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being are hereinafter sometimes referred to herein as "common stock equivalentsCommon Stock Equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by a majority of the Independent Directors and the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right rights of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement and shall give simultaneous written notice to the Rights Agent stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement and notice to the Rights Agent at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date. The Company shall give the Rights Agent notice of the selection of any Common Stock Equivalent under this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares securities having substantially the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stockEquivalent Preferred Stock")) or securities convertible into the Preferred Stock or equivalent preferred stock Equivalent Preferred Stock) at a price per share of the Preferred Stock or per share of equivalent preferred stock Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into the Preferred Stock or equivalent preferred stockEquivalent Preferred Stock) less than the Current Market Price (as determined pursuant to defined in Section 11(d) hereof)) per share of the Preferred Stock or Equivalent Preferred Stock, as the case may be, 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, of which the numerator of which shall be the number of shares of Preferred Stock outstanding on such record date, date plus the number of shares of Preferred Stock or Equivalent Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock or Equivalent Preferred Stock 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, Price and of which the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, date plus the number of additional shares of Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the RightsAgent. Shares of Preferred Stock 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 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 Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash indebtedness or assets (other than a regular quarterly periodic cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b)), but including any dividendthe 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, of which the numerator shall be the Current Market Price per share of Preferred Stock (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 or of such subscription rights or warrants applicable to one share of Preferred Stock and of which the denominator shall be such Current Market Price per share of Preferred Stock. 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.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii),
(i) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 30 thirty (30) consecutive Trading Days (as such term is hereinafter defineddefined in this paragraph (d)) immediately prior to such date, date and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchof
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event that:
(A) If any Person, shall, at any time after the Rights Dividend Declaration Date, be or become Person becomes an Acquiring Person, unless the event causing such Person the 15% threshold to have become an Acquiring Person be crossed is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, directors to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
stockholders (B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation"QUALIFYING OFFER"), then, promptly following the first occurrence of any Section 11(a)(ii) Eventsuch event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one a Right was exercisable immediately prior to the first occurrence of a the Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the current market price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such occurrence (such number of shares, the "ADJUSTMENT SHARES").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that If the number of shares of Common Stock which that are authorized by the Company's articles or certificate Certificate of incorporation Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current ValueCURRENT VALUE") over (2) the Purchase Price (such excess being referred to herein as excess, the "SpreadSPREAD"), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon exercise of the Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as stock, "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyDirectors; providedPROVIDED, however, if the Company shall not have made adequate provision to deliver value the Current Value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a the Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section SECTION 11(a)(ii) Trigger DateTRIGGER DATE"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution PeriodSUBSTITUTION PERIOD"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchthis
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he such holder would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event that:
(A) any Person, Person shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the CompanyCompany and who are not representatives, nominees, Affiliates or Associates of an Acquiring Person, after receiving advice from one or more investment banking firms, to be (xa) at a price which is fair to stockholders and not inadequate (taking into account all factors which such members of the Board deem relevant, including, without limitation, prices which could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (yb) otherwise in the best interests of the Company and its stockholders, or
stockholders (B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation"Qualified Offer"), then, promptly following the first occurrence of any Section 11(a)(ii) Eventsuch event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths hundredths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price (determined pursuant to Section 11(d) hereof) per share of Common Stock on the date of such first occurrence (such number of shares, the "Adjustment Shares").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation incorporation, but which are not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: shall (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each RightRight (subject to Section 7(e) hereof), make adequate provision to substitute for the Adjustment Shares, upon the exercise of a Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such,
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares or other securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare and pay a dividend on the Preferred Stock shares which are subject to the Rights ("Subject Shares") payable in shares of Preferred Stockstock of the Company, (B) subdivide or split the outstanding Preferred StockSubject Shares, (C) combine or consolidate the outstanding Preferred Stock Subject Shares into a smaller number of shares, shares or effect a reverse stock split of the Subject Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Subject Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, and in each such event, except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination split, reverse split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned received upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination split, reverse split, combination, consolidation or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In the event that:that at any time after the date of this Agreement
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless or any Associate or Affiliate of any Acquiring Person, directly or indirectly (1) shall merge into the event causing Company or any of its Subsidiaries or otherwise combine with the Company or any of its Subsidiaries and the Company or such Subsidiary shall be the continuing or surviving corporation of such merger or combination and the Common Stock shall remain outstanding and the outstanding shares thereof shall not be changed into or exchanged for stock or other securities of the Company or of any other Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereofor cash or any other property, or is an acquisition of shares of Common Stock pursuant to a tender offer (2) shall sell or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from otherwise transfer in one or more investment banking firmstransactions, assets to be (x) fair to stockholders (taking into account all factors which such members the Company or any of its Subsidiaries in exchange for 20 percent or more of the Board deem relevant) and (y) otherwise in the best interests shares of any class of capital stock of the Company or any of its Subsidiaries, and its stockholdersthe Common Stock shall remain outstanding and unchanged, or
(B) directly or indirectly, any Acquiring Person, or any Associate or Affiliate of any Acquiring Person, shall (1) at least a majority in one or more transactions, transfer any assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class of capital stock of the members Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class of capital stock of the Board Company or any of Directors who are not officers its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class of capital stock of the Company or any of its Subsidiaries or other securities exercisable for or convertible into shares of any class of capital stock of the Company or any of its Subsidiaries (other than as part of a PRO RATA distribution by the Company or such Subsidiary to all holders of Common Stock), (2) sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (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, (3) receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full-time employment as a regular employee, or fees for serving as director, at rates in accordance with the Company's (or its Subsidiaries') past practices, or (4) receive the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance provided by the Company or any of its Subsidiaries, 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, or
(C) during any 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, after reasonable inquiry and investigationor any merger or consolidation of the Company with any of its Subsidiaries or any other similar transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person or any Affiliate or Associate of such Acquiring Person) which has the effect, directly or indirectly, of increasing by more than one percent 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 owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, or
(D) any Person shall become an Acquiring Person otherwise than pursuant to a Qualified Offer, then, promptly following and in each such case, but subject to the first occurrence provisions of any Section 11(a)(ii) Event27, proper provision shall be made so that each holder of a Right (Right, except as provided below and in Section 7(e7(f), shall, on and after the later of (I) hereofthe date of the occurrence of an event described in clause (A), (B), (C) shall thereafter or (D) of this Section 11(a)(ii), or (II) the date of the expiration of the period within which the Rights may be redeemed pursuant to Section 23 (as the same may have been amended as provided in Section 26), have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred StockPrice, such number of shares of Common Stock as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of Units for which a Right is then exercisable and dividing that product by (y) 50 percent of the current market price per share of Common Stock (determined in accordance with Section 11(d)) on the date of the occurrence of the relevant event listed above in clause (A), (B), (C) or (D) of this subparagraph (ii); PROVIDED, HOWEVER, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not consummate any such merger, combination, transfer or transaction referred to in any of such clauses (A), (B) and (C) unless prior thereto there shall be sufficient authorized but unissued Common Stock to permit the exercise in full of the Rights in accordance with the foregoing sentence, unless the Board of Directors has determined to issue Equivalent Stock in accordance with Section 7(a); PROVIDED, HOWEVER, that in no case may the Company consummate any such merger, combination, transfer or transaction if at the time of or immediately after such transaction there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights. In the event that the Company issues Equivalent Stock upon the exercise of any Rights pursuant to the immediately preceding paragraph, then, upon any such exercise, proper provision shall be made so that the holder of a Right (except as provided in Section 7(f)) shall have the right to receive, upon such exercise at the then current Purchase Price, such number of shares or other units of Equivalent Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock Units for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority 50 percent of the members current market price per share or other unit of the Company's Board of Directors who are not officers Equivalent Stock of the Company determine (determined on substantially the same basis as is prescribed by Section 11(d) with respect to the valuation of Common Stock) on the date of occurrence of the relevant event listed above in clause (A), (B), (C) or (D) of this subparagraph (ii). In the event that at any time the following is not permitted Company should be prohibited by the terms law, by any provision of its Certificate of Incorporation, or by any instrument or agreement or instrument to which the Company is a party on the date or by which it is bound, from issuing, or should be unable under its Certificate of this Agreement (orIncorporation to issue, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common sufficient Equivalent Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the all outstanding Rights in accordance with the foregoing subparagraph (ii) sentence, then, in lieu of this Section 11(a)issuing such Equivalent Stock upon such exercise, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise shall pay to each holder of a Right (the "Current Value"except as provided in Section 7(f)) over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment surrender of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, Right as provided herein but without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or an amount in cash have an aggregate value for each Right equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such datePurchase Price.
(b) In case the Company shall at any time after the Rights Record Date fix a record date for the issuance of rights, options rights or warrants to all holders of Preferred Common Stock or Subject Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred to subscribe for or purchase Common Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) Subject Shares or securities convertible into Preferred Common Stock or equivalent preferred stock Subject Shares at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stockCommon Stock) less than the Current Market Price current market price per share (as determined pursuant to in accordance with Section 11(d)) hereof) per share of Preferred Stock 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, of which the numerator of which shall be the total number of shares of Preferred Common Stock and Subject Shares outstanding on such record date, date plus the number of shares of Preferred Common Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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, current market price and of which the denominator of which shall be the total number of shares of Preferred Common Stock and Subject Shares outstanding on such record date, date plus the number of additional shares of Preferred Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription or purchase price may be paid by delivery of consideration part paid, in whole or all of which may be in part, 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 and shall be binding on the Rights Agent and the holders of the RightsAgent. Shares of Preferred Stock 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 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 at any time after the Rights Record Date fix a record date for the making of a distribution to all holders on the shares of Preferred Common Stock or the Subject Shares, whether by way of a dividend, distribution, reclassification of stock, recapitalization, reorganization or partial liquidation of the Company or otherwise (and including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) ), of subscription rights or warrants (excluding those referred to in Section 11(b)), evidences of indebtedness, cash (indebtedness or other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than (i) regular periodic cash dividends, (ii) a dividend payable in Preferred Common Stock or (iii) a distribution which is part of or is made in connection with a transaction to which Section 11(a)(ii) or Section 13 applies), 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, of which the numerator shall be the current market price per share of Common Stock (determined in accordance with Section 11(d)) on such record date, less the fair market value applicable to one share of Common Stock (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 such assets or evidences of indebtedness or of such subscription rights or warrants so to be distributed, and of which the denominator shall be such current market price per share of Common Stock. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, but including any dividendthe 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.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, howeverHOWEVER, that in the event that the Current Market Price current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current Market Price" current market price shall be properly appropriately adjusted to take into account reflect the current market price per share of Common Stock in connection with 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 NYSE New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the NYSENew 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 shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Dealers, Inc., Automated Quotation System ("NASDAQ") or such other system then in use, or, if ). If on any such date, date the shares of Common Stock are not quoted by any suchsuch organization, the fair market value of such shares on such date as determined in good faith by the Board of Directors of the issuer of such Common Stock shall be used. Any such determination of current market price shall be described in a statement filed with the Rights Agent. For the purpose of any computation hereunder, the "current market price" of a Unit shall be deemed to be equal to the current market price per share of Common Stock, and the "current market price" of a Subject Share shall be deemed to be equal to the current market price per share of Common Stock divided by the number of Subject Shares which comprise a Unit.
Appears in 1 contract
Samples: Rights Agreement (Talbert Medical Management Holdings Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by or other securities subject to purchase upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement Rights Dividend Declaration Date (A) declare a dividend on the outstanding shares of $25 Preferred Stock payable in shares of $25 Preferred Stock, (B) subdivide the outstanding shares of $25 Preferred Stock, (C) combine the outstanding shares of $25 Preferred Stock into a smaller number of shares, shares or (D) issue any otherwise reclassify the outstanding shares of its capital stock in a reclassification of the $25 Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of $25 Preferred Stock or capital stock or other capital stocksecurities, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of $25 Preferred Stock or capital stock or other capital stocksecurities, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the $25 Preferred Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to Sections 23 and 24 of this Agreement, in the event that:
(A) any Person, Person shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is (1) a transaction set forth in Section 13(aFlip-Over Event or (2) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding Permitted Offer (provided that this clause (2) shall cease to apply if such Acquiring Person thereafter becomes the Beneficial Owner of any additional shares of Common Stock at other than pursuant to such Permitted Offer or a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Companytransaction set forth in Section 13(a) or 13(d) hereof), after receiving advice from one or more investment banking firmsthen, to be (x) fair the Purchase Price shall be adjusted to stockholders (taking into account all factors be the Purchase Price immediately prior to the first occurrence of a Flip-In Event multiplied by the number of Fractional Shares of $25 Preferred Stock for which a Right was exercisable immediately prior to such members of the Board deem relevant) first occurrence and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below in Section 11(a)(iii) and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at a price equal to the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number the shares of one one-thousandths of a share of $25 Preferred StockStock otherwise purchasable thereunder, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying dividing the then current Purchase Price by 50% of the then Current Market Price per share of Common Stock on the date of such first occurrence (such number of one one-thousandths shares, the "Adjustment Shares"); provided that the Purchase Price and the number of a share Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement).
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which that are authorized by the Company's articles or certificate Amended and Restated Articles of incorporation Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: , to the extent permitted by applicable law and regulation, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (computed using the Current Market Price used to determine the number of Adjustment Shares) (the "Current Value") over (2) the Purchase Price (such excess being is herein referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon the exercise of the Rights and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which (including, without limitation, the $25 Preferred Stock) that the Board of Directors of the Company has deemed determined to have substantially the same value as shares of Common Stock (such shares of preferred stock being are herein referred to herein as "common stock equivalentsCommon Stock Equivalents")), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-In Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Flip-In Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Flip-In Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company or the Board of Directors determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Flip-In Trigger Date and the value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of $25 Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) $25 Preferred Stock (or shares having substantially the same rights, privileges and preferences as the shares of $25 Preferred Stock ("equivalent preferred stockEquivalent $25 Preferred Stock")) or securities convertible into $25 Preferred Stock or equivalent preferred stock Equivalent $25 Preferred Stock at a price per share of $25 Preferred Stock or per share of equivalent preferred stock Equivalent $25 Preferred Stock (or having a conversion price per share, if a security convertible into $25 Preferred Stock or equivalent preferred stockEquivalent $25 Preferred Stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of $25 Preferred Stock 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 shares of $25 Preferred Stock outstanding on such record date, plus the number of shares of $25 Preferred Stock which that the aggregate offering price of the total number of shares of $25 Preferred Stock and/or equivalent preferred stock Equivalent $25 Preferred Stock 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 shares of $25 Preferred Stock outstanding on such record date, plus the number of additional shares of $25 Preferred Stock and/or equivalent preferred stock Equivalent $25 Preferred Stock 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 by delivery of consideration consideration, part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of $25 Preferred Stock 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 or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which that would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to all holders of $25 Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in $25 Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, dividend payable in stock other than computations made pursuant $25 Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(a)(iii11(b) hereof), the "Current Market Price" per share of Common Stock on any Purchase Price to be in effect after such record date shall be deemed to be determined by multiplying the average of the daily closing prices per share of such Common Stock for the 30 consecutive Trading Days (as such term is hereinafter defined) Purchase Price in effect immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereofrecord date by a fraction, the "Current Market Price" per share numerator of Common Stock on any date which shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of $25 Preferred Stock on such record date, less the Common Stock is fair market value (as determined during a period following the announcement in good faith by the issuer Board of Directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such Common subscription rights or warrants applicable to a share of $25 Preferred Stock and the denominator of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of which shall be such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 Price per share 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such$25
Appears in 1 contract
Samples: Rights Agreement (Cleco Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, . the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred StockShares, (Cc) combine the outstanding Preferred Stock Shares into a smaller number of shares, Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock 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 in Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company for the Preferred Shares were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof11 (a)(ii).
(ii) In Subject to Section 25 of this Agreement, in the event thatevent:
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, shall, at any time after the Rights Dividend Declaration Shares Acquisition Date, directly or indirectly;
(1) shall merge into the Company or otherwise combine with the Company and the Company shall be the continuing or become an Acquiring Person, unless surviving corporation of such merger or combination and the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests Shares of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company shall remain outstanding;
(including2) shall, without limitationin one transaction or a series of transactions, shares, or units of shares, of preferred stock which the Board of Directors of transfer any assets to the Company has deemed or to have substantially the same value as any of its Subsidiaries in exchange (in whole or in part) for Common Shares, for shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt other equity securities of the Company, (5) other assetsor for securities exercisable for or convertible into shares of equity, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors securities of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of (Common Shares or otherwise) or otherwise obtain from the Company; provided, howeverwith or without consideration, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient any additional shares of Common Stock could be authorized such equity securities or securities exercisable for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization or convertible into shares of such additional shares equity securities (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken other than pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a pro rata distribution to all holders of Preferred Stock Common Shares);
(including any such distribution made 3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of assets in connection one transaction or a series of transactions, to, from or with a consolidation or merger in which (as the case may be) the Company is or any of its Subsidiaries, on terms and conditions less favorable to the continuing corporationCompany than the Company would be able to obtain in arm's-length negotiation with an unaffiliated third party, other than pursuant to a Section 13 Event:
(4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise acquire or dispose of evidences assets having an aggregate fair market value of indebtednessmore than $5,000,000 in one transaction or a series of transactions, cash to, from or with (as the case may be) the Company or any of the Company's Subsidiaries (other than a regular quarterly cash dividend out incidental to the lines of business, if any, engaged in as of the earnings date hereof between the Company and such Acquiring Person or retained earnings Associate or Affiliate), other than pursuant to a Section 13 Event;
(5) shall receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full-time employment as a regular employee at rates in accordance with the Company's (or its Subsidiaries') past practices; or (6) shall receive the benefit, directly or indirectly (except proportionately as a stockholder and except if resulting from a requirement of law or governmental regulation), assets of any loans (other than a dividend payable in Preferred Stockthe ordinary course of business), but including advances, guarantees, pledges or other financial assistance or any dividendtax credits or other tax advantage provided by the Company or any of its Subsidiaries; or
(iB) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock Person (other than the RightsCompany, any Subsidiary of the Company, any employee benefit plan of the Company or any of its Subsidiaries or any entity holding securities of the Company organized, appointed or established by the Company or any of its Subsidiaries for or pursuant to the terms of any such plan), alone or (B) any subdivisiontogether with its Affiliates and Associates, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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, become an Acquiring Person; 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Samples: Rights Agreement (Xionics Document Technologies Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSSECTION 11. ADJUSTMENT OF PURCHASE PRICE; NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares shares, or fractions thereof, covered by each Right Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred StockStock into a greater number of shares, (C) combine or consolidate the outstanding Preferred Stock into a smaller number of shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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 Section 7(e) and this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In Upon the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Trigger Event, proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e) hereof) ), shall thereafter have the right to receive, upon exercise thereof following the Distribution Date at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths hundredths (1/100s) of a share of Preferred Stock, such number of shares of Common Stock Shares of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths (1/100s) of a share of Preferred Stock for which one such Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) such Trigger Event, whether or not such Right was then exercisable, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement) by 50% of the Current Market Price per share of the Common Shares of the Company (determined pursuant to Section 11(d) on the date of the occurrence of such Trigger Event (such number of shares being hereinafter referred to as the "Adjustment Shares"). The Company shall notify the Rights Agent as to any Persons who are deemed by the Company to be Acquiring Persons or Associates, Affiliates or transferees (as described in subparagraphs (B) and (C) of Section 7(e) of such Persons and shall identify any Rights pertaining thereto.
(iii) Unless at least a majority In lieu of the members issuing shares of the Company's Board of Directors who are not officers Common Stock of the Company determine that in accordance with Section 11(a)(ii) hereof, the following is not permitted Company, acting by the terms resolution of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the its Board of Directors so determinesDirectors, after the date of this Agreement)may (and, then in the event that the number of shares of Common Stock Shares which are authorized by the Company's articles or certificate Certificate of incorporation Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a11(a)(ii), the Company Company, acting by resolution of its Board of Directors, shall: ): (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current ValueCURRENT VALUE") ), over (2) the Purchase Price attributable to each Right (such excess being referred to herein as excess, the "SpreadSPREAD"), ) and (B) with respect to each RightRight (subject to Section 7(e)), make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock Shares or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares Common Shares of Common Stock the Company (such shares or units of preferred stock being referred to herein as hereinafter called "common stock equivalentsCOMMON STOCK EQUIVALENTS")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by action of the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyCompany which has theretofore performed no services for the Company or any Subsidiary of the Company in the past five years; provided, however, if the Company shall not have made adequate provision to deliver value equal to the Current Value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Trigger Event and (y) the first date on which that the Company's right of redemption to redeem the Rights pursuant to Section 23(a) expires 23 hereof, as such date may be amended pursuant to Section 27 hereof, shall expire (the later of (x) and or (y) being referred to herein as the "Section SECTION 11(a)(ii) Trigger DateTRIGGER DATE"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock Shares (to the extent available) and then, if necessary, cash, which shares securities and/or cash assets, that in the aggregate have an aggregate a value equal to the Spread. If If, after the occurrence of a Trigger Event, the number of Common Shares that are authorized by the Company's Certificate of Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit exercise in full of the Rights in accordance with Section 11(a)(ii) hereof and the Company, acting by resolution of its Board of Directors of the Company Directors, shall determine in good faith that it is likely that sufficient additional shares of Common Stock Shares could be authorized for issuance upon exercise in full of the Rights, the 30 thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, period as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need is to be (and may be) taken pursuant to the first and/or second sentences terms of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof), that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any such stockholder approval for the authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such the first sentence of this Section 11(a)(iii) and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock Shares shall be the Current Market Price per Common Shares (as determined pursuant to Section 11(d)) hereof) on the date of the first occurrence of the Trigger Event, and the per share or per unit value of any Common Stock Equivalents shall be deemed to equal the Current Market Price per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock Shares on such date.
(b) In case the event that the Company shall fix a record date for the issuance of rights, options or warrants to all holders of shares of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stockEQUIVALENT PREFERENCE STOCK")) or securities convertible into shares of Preferred Stock or equivalent preferred stock Equivalent Preference Stock at a price per share of Preferred Stock or per share of equivalent preferred stock Equivalent Preference Stock (or having a conversion price per share, if a security convertible into shares of Preferred Stock or equivalent preferred stockEquivalent Preference Stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Preferred Stock (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 shares of Preferred Stock outstanding on such record date, date plus the number of additional shares of Preferred Stock and/or Equivalent Preference Stock which the aggregate offering price of the total number of such shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, date plus the number of additional shares of Preferred Stock and/or equivalent preferred stock Equivalent Preference Stock 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 by delivery of in a consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the RightsAgent. Shares of Preferred Stock 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 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 Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtednessindebtedness or assets or subscription rights or warrants (excluding those referred to in Section 11(b)), cash 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 share of Preferred Stock (other than a regular quarterly cash dividend out as defined in Section 11(d)) on such record date, less the fair market value (as determined in good faith by the Board of the earnings or retained earnings Directors of the Company), whose determination shall be described in a statement filed with the Rights Agent) of the portion of the assets (other than a dividend payable in or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one share of Preferred Stock, but including any dividendand the denominator of which shall be such Current Market Price per share of Preferred Stock. 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.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market PriceCURRENT MARKET PRICE" per share of Common Stock Share on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock Share is determined during a period following the announcement by the issuer of such Common Stock Share of (Aa) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchShare payable in
Appears in 1 contract
Samples: Rights Agreement (Usf Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and of any kind of shares securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Common Shares payable in shares of Preferred StockCommon Shares, (B) subdivide the outstanding Preferred StockCommon Shares, (C) combine the outstanding Preferred Stock Common Shares into a smaller number of shares, Common Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Common 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) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, receive upon payment of the Purchase Price then in effect, effect the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Common Shares (or other capital stock, as the case may be) transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i11(a) (i) and Section 11(a)(ii11(a) hereof(ii), the adjustment provided for in this Section 11(a)(i11(a) (i) shall be in addition to, and shall be made prior to, any adjustment required pursuant to Section 11(a)(ii11 (a) hereof(ii).
(ii) In Subject to Section 24 and Section 7(e) of this Agreement, in the event that:
(A) any Person, shallalone or together with its Affiliates or Associates, at any time after the Rights Dividend Declaration Date, be is or become becomes an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is except as a result of a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation), then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (Right, except as provided below and in Section 7(e) hereof) ), shall thereafter have the a right to receive, upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of Common Shares for which a Right is then exercisable, in accordance with the terms of this Agreement, Agreement and in lieu of a number of one one-thousandths of a share of Preferred StockCommon Shares, such number of shares of Common Stock Shares of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock Common Shares for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) dividing that product 50% of the then current per share market price of the Company's Common Shares (which, following determined pursuant to Section 11(d) hereof) on the date of the occurrence of such first occurrence, shall thereafter be referred to as event (such number of shares is herein called the "Purchase Price" for each Right Adjustment Shares"). In the event that any Person shall become an Acquiring Person and for all purposes of this Agreement)the Rights shall then be outstanding, the Company shall not take any action which would eliminate or diminish the benefits intended to be afforded by the Rights.
(iii) Unless at least a majority of In the members of event that after the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (Distribution Date or, if in the Board case of Directors so determines, a Section 11(a) (ii) Event after the date of this Agreement)the occurrence of such Section 11(a) (ii) Event, then in the event that the number of shares of Common Stock Shares which are is authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a)Rights, the Company shall: (A) determine the excess of (1) the value of the Common Shares, or Adjustment Shares in accordance with Section 11 (a) (ii), as the case may be, issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to is herein as called the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Common Shares, or Adjustments Shares, as the case may be, upon exercise of the Rights and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock Shares of the same or different class or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same economic value as shares of Common Stock Shares (such shares or units of shares of preferred stock being are referred to herein as "common stock share equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the Distribution Date, or in the case of a Section 11(a) (ii) Event the later of (x) the first occurrence of a Section 11(a)(ii11(a) (ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) ), and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock Shares (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock Shares could be authorized for issuance upon exercise in full of the Rights, the 30 thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 one hundred twenty (120) days after the Distribution Date or the Section 11(a)(ii11(a) (ii) Trigger Date, as the case may be, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need should be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii1l(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares securities and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii11(a) (iii), the value of a share of the Common Stock Shares shall be the Current Market Price current per share market price per Common Share (as determined pursuant to defined in Section 11(d)) hereof) per share of the Common Stock on the Distribution Date or the Section 11(a)(ii11(a) (ii) Trigger Date Date, as the case may be, and the value of any "common stock share equivalent" shall be deemed to have the same value as the Common Stock Shares on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock Common Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock to subscribe for or purchase Common Shares (or shares having the same rights, privileges and preferences as the shares of Preferred Stock Common Shares ("equivalent preferred stockcommon shares")) or securities convertible into Preferred Stock Common Shares or equivalent preferred stock common shares at a price per Common Share or equivalent common share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock Common Shares or equivalent preferred stockcommon shares) less than the Current Market Price then current per share market price of the Common Shares (as determined pursuant to defined in Section 11(d)) hereof) per share of Preferred Stock 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 shares of Preferred Stock Common Shares outstanding on such record date, date plus the number of shares of Preferred Stock Common Shares which the aggregate offering price of the total number of shares of Preferred Stock Common Shares and/or equivalent preferred stock common 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, current market price and the denominator of which shall be the number of shares of Preferred Stock Common Shares outstanding on such record date, date plus the number of additional shares of Preferred Stock Common Shares and/or equivalent preferred stock common shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid by delivery of in a consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the RightsAgent. Common Shares of Preferred Stock 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 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 Preferred Stock the Common Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash indebtedness or assets (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred StockCommon Shares) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), but including any dividendthe 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 then current per share market price of the Common Shares 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 or of such subscription rights or warrants applicable to one Common Share and the denominator of which shall be such current per share market price of the Common Shares; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" current per share market price" of Common Stock any security (a "Security" for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Security for the 30 thirty (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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price current per share market price of the Common Stock Security is determined during a period following the announcement by the issuer of such Common Stock Security of (A) a dividend or distribution on Common Stock such Security payable in shares of Common Stock such Security or securities convertible into shares of Common Stock (other than the Rights)such shares, or (B) any subdivision, combination or reclassification of such Common Stock, Security and prior to the expiration of the requisite 30 thirty (30) Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Samples: Rights Agreement (SPSS Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares Preferred Shares or other securities or assets covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement Date (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide or split the outstanding Preferred StockShares, (C) combine or consolidate the outstanding Preferred Stock Shares into a smaller number of shares, Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Shares (including any such reclassification in connection with a share exchange, consolidation or merger in which the Company is the continuing or surviving corporationentity), except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, whichstock that, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Shares transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination split, combination, consolidation or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, to any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In Subject to Section 24 hereof, in the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become Person becomes an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the a right to receive, upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-thousandth of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement, Agreement and in lieu of a number of one one-thousandths of a share of Preferred StockShares, such number of shares of Common Stock of the Company Shares as shall equal the result obtained by (xA) multiplying the then current Purchase Price by the then number of one one-thousandths thousandth of a share of Preferred Stock Share for which one a Right was is then exercisable immediately and dividing that product by (B) 50% of the then current per share market price of the Common Shares (determined pursuant to Section 11(d) hereof) on the date such Person became an Acquiring Person; provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). In the event that any Person shall become an Acquiring Person and the Rights shall then be outstanding, the Company shall not take any action that would eliminate or diminish the benefits intended to be afforded by the Rights. Notwithstanding anything in this Agreement to the contrary, from and after the time any Person becomes an Acquiring Person, any Rights (x) beneficially owned by such Acquiring Person or an Associate or Affiliate of such Acquiring Person or (y) that were beneficially owned by such Acquiring Person or an Associate or Affiliate of such Acquiring Person and are beneficially owned by (A) a transferee of such Acquiring Person (or of any such Associate or Affiliate) who received such Rights after the earlier of the date the Acquiring Person became such and the Distribution Date or (B) a transferee of such Acquiring Person (or of any such Associate or Affiliate) who received such Rights prior to or on the first occurrence earlier of the date the Acquiring Person became such and the Distribution Date and pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring Person (or of any such Associate or Affiliate) to holders of equity interests in such transferring Person or to any Person with whom the Acquiring Person (or of any such Associate or Affiliate) has any continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a transfer that the Board has determined is part of a plan, arrangement or understanding that has as a primary purpose or effect the avoidance of this Section 11(a)(ii), shall become null and void without any further action and no holder of such Rights shall have any rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. The Company shall use all reasonable efforts to ensure that the provisions of this Section 11(a)(ii) Eventand 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 the Company’s failure to make any determinations hereunder with respect to an Acquiring Person or its Affiliates, Associates or transferees. The Company shall give the Rights Agent written notice of the identity of any such Person, Associate or Affiliate and the nominee of any of the foregoing promptly after it becomes aware of such identity, and (y) dividing that product (whichthe Rights Agent may rely conclusively on such notice in carrying out its duties under this Agreement. Until such written notice is received by the Rights Agent, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and Rights Agent may assume conclusively for all purposes of this Agreement)that no such Acquiring Person exists.
(iii) Unless at least a majority In lieu of the members of the Company's Board of Directors who are not officers of issuing Common Shares in accordance with Section 11(a)(ii) hereof, the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (ormay, if the Board determines that such action is necessary or appropriate and not contrary to the interests of Directors so determinesholders of Rights, after the date of this Agreement)elect to (and, then in the event that the number of shares of Common Stock which are authorized by Board has not exercised the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights exchange right contained in Section 24(c) hereof and there are not sufficient treasury shares and authorized but unissued Common Shares to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (iiSection 11(a)(ii) of this Section 11(a)hereof, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable take all such action as may be necessary to authorize, issue or pay, upon the exercise of a Right the Rights, cash (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment including by way of the applicable Purchase Price, (1) cash, (2) a reduction in of the Purchase Price), (3) Common Stock property, debt or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock stock, such as the Preferred Shares, which the Board of Directors of the Company has deemed to have substantially essentially the same value or economic rights as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4Shares) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing thereof having an aggregate value equal to the value of the Common Shares that otherwise would have been issuable pursuant to Section 11(a)(ii) hereof (the “Current Value”), where such which aggregate value has been shall be determined by the Board upon consideration of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyBoard; provided, however, if the Company shall not have made adequate provision to deliver value if required pursuant to clause the first parenthetical of this sentence within thirty (B30) above within 30 days following the later of (x) the first occurrence of a an event triggering the rights to purchase Common Shares described in Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "“Section 11(a)(ii) Trigger Date"”), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock Shares (to the extent available) and then, if necessary, cash, which shares and/or and cash have an aggregate value equal to the Spreadexcess of the Current Value over the Purchase Price. For purposes of the preceding sentence, Current Value shall be determined pursuant to Section 11(d) hereof. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock Shares could be authorized for issuance upon exercise in full of the Rights, the 30 thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "“Substitution Period"”); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need or should be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof and the last paragraph of Section 11(a)(ii) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence this Section 11(a)(iii) 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. The Company shall promptly notify the Rights Agent in writing upon the occurrence of such suspension, as well as a public announcement at and if such time as the suspension notification is no longer in effect. For purposes of this Section 11(a)(iii)given orally, the value of a share of Common Stock Company shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have confirm the same value as in writing on or prior to the Common Stock on Business Day next following. Until such datenotice is received by the Rights Agent, the Rights Agent may presume conclusively that no such suspension has occurred.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock Shares (or shares having the same designations and the powers, preferences and rights, privileges and preferences the qualifications, limitations and restrictions as the shares of Preferred Stock Shares ("equivalent preferred stock"“Equivalent Preferred Shares”)) or securities convertible into Preferred Stock Shares or equivalent preferred stock Equivalent Preferred Shares at a price per share of Preferred Stock Share or per share of equivalent preferred stock Equivalent Preferred Share (or having a conversion price per share, if a security convertible into Preferred Stock Shares or equivalent preferred stockEquivalent Preferred Shares) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) then current per share market price of the Preferred Stock Shares 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 shares of Preferred Stock Shares outstanding on such record date, date plus the number of shares of Preferred Stock which Shares that the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock Shares or Equivalent Preferred Shares so to be offered (and/or or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price, current market price and the denominator of which shall be the number of shares of Preferred Stock Shares outstanding on such record date, date plus the number of additional shares of Preferred Stock and/or equivalent preferred stock Shares or Equivalent Preferred Shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid by delivery of in a consideration part or all of which may 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 CompanyBoard, whose determination shall be described in a written statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the RightsAgent. Preferred Shares of Preferred Stock 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 rights, options or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which that 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 the Preferred Stock Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporationor surviving entity) of evidences of indebtedness, cash indebtedness or assets (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred StockShares) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), but including any dividendthe 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 then current per share market price of the Preferred Shares on such record date, less the fair market value (as determined in good faith by the Board, whose determination shall be described in a written statement filed with the Rights Agent) of the portion of the assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to one Preferred Share and the denominator of which shall be such current per share market price of the Preferred Shares; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price that would then be in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" “current per share market price” of Common Stock any security (a “Security” for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Security for the 30 consecutive Trading Days thirty (as such term is hereinafter defined30) immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following prior to, but not including, such date; provided, however, that in the event that the Current Market Price current per share market price of the Common Stock Security is determined during a period following the announcement by the issuer of such Common Stock Security of (A) a dividend or distribution on Common Stock such Security payable in shares of Common Stock such Security or securities convertible into shares of Common Stock (other than the Rights)such shares, or (B) any subdivision, combination or reclassification of such Common Stock, Security or securities convertible into such shares and prior to to, but not including, the expiration of the requisite 30 thirty (30) Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current Market Price" current per share market price shall be properly appropriately adjusted to take into account ex-dividend tradingreflect the current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the NYSE or, if the shares of Common The New York Stock are not listed Exchange or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchThe Nasdaq
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.:
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event that:
(A) any Person, shallalone or together with its Affiliates and Associates, at any time after the Rights Dividend Declaration Date, be or shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to then proper provision shall be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter shall, for a period of 60 days after the later of (i) the occurrence of any such event or (ii) the effective date of an appropriate registration statement under the Act pursuant to Section 9 hereof, have the a right to receive, upon exercise thereof at a price equal to the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a such number of shares of Common Stock of the Company (or, in the discretion of the Board of Directors, one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company ) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, Event and (y) dividing that product by 50% of the then current per share market price of the Company's Common Stock (which, following determined pursuant to Section 11(d) hereof) on the date of such first occurrence, shall thereafter be occurrence (such number of shares being referred to as the "Purchase Price" for each Right Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and for all purposes of no adjustment shall be made pursuant to this AgreementSection 11(a)(ii).
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of there shall not be sufficient treasury shares or authorized but unissued (and unreserved) shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph Section 11(a)(ii) and the Rights become so exercisable (ii) and the Board has determined to make the Rights exercisable into fractions of a share of preferred stock), notwithstanding any other provision of this Section 11(a)Agreement, to the Company shall: extent necessary and permitted by applicable law, each Right shall thereafter represent the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, (A) determine a number of shares (or fractions of shares) of Common Stock (up to the excess maximum number of (1shares of Common Stock which may permissibly be issued) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment a number of the applicable Purchase Price, (1) cash, (2) one one-thousandths of a reduction in the Purchase Price, (3) Common share of Preferred Stock or a number of (or fractions of) other equity securities of the Company (includingor, without limitationin the discretion of the Board, shares, or units of shares, of preferred stock debt securities) which the Board of Directors of the Company has deemed determined to have substantially the same aggregate current market value (determined pursuant to Sections 11(d)(i) and 11(d)(ii) hereof, to the extent applicable) as shares one share of Common Stock (such number of shares (or fractions of preferred stock being referred to herein as "common stock equivalents")), shares) of Preferred Stock (4) or other equity securities or debt securities of the Company) being referred to as a "capital stock equivalent"), (5) other assets, or (6) any combination of equal in the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board number of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyAdjustment Shares; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later sufficient shares of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date")Common Stock and/or capital stock equivalents are unavailable, then the Company shall be obligated to delivershall, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and thenpermitted by applicable law, if necessary, cash, which shares and/or cash have an aggregate value equal take all such action as may be necessary to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient authorize additional shares of Common Stock could or capital stock equivalents for issuance upon exercise of the Rights, including the calling of a meeting of shareholders; and provided, further, that if the Company is unable to cause sufficient shares of Common Stock and/or capital stock equivalents to be authorized available for issuance upon exercise in full of the Rights, then each Right shall thereafter represent the 30 day period set forth above may right to receive the Adjusted Number of Shares upon exercise at the Adjusted Purchase Price (as such terms are hereinafter defined). As used herein, the term "Adjusted Number of Shares" shall be extended equal to that number of shares (or fractions of shares) of Common Stock (and/or capital stock equivalents) equal to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization product of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, the number of Adjustment Shares and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 is the number of shares of Preferred Common Stock outstanding on such record date, plus the number (and/or shares or units of shares of Preferred Stock which the aggregate offering price common stock equivalents) available for issuance upon exercise of the total number of shares of Preferred Stock and/or equivalent preferred stock 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, Rights and the denominator of which shall be is the aggregate number of Adjustment Shares otherwise issuable upon exercise in full of all Rights (assuming there were a sufficient number of shares of Preferred Common Stock outstanding on available) (such record date, plus fraction being referred to as the number of additional shares of Preferred Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible"Proration Factor"). In case such subscription price may be paid by delivery The "Adjusted Purchase Price" shall mean the product of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by Purchase Price and the Proration Factor. The Board of Directors of the Companymay, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock owned by or held for the account of the Company but shall not be deemed outstanding for required to, establish procedures to allocate 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 or warrants are not so issued, the Purchase Price shall be adjusted right 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in receive shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration capital stock equivalents upon exercise of the requisite 30 Trading Day or 10 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 Rights among holders 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchRights.
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSRIGHTS (INCLUDING "FLIP-IN" PROVISION). The Purchase Price, the number and kind of shares or other securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare and pay a dividend on the Preferred Stock shares which are subject to the Rights ("Subject Shares") payable in shares of Preferred Stockstock of the Company, (B) subdivide or split the outstanding Preferred StockSubject Shares, (C) combine or consolidate the outstanding Preferred Stock Subject Shares into a smaller number of sharesshares or effect a reverse stock split of the Subject Shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Subject Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, and in each such event, except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination split, reverse split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned received upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassificationreceive. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In If at any time after the event that:date of this Agreement
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless or any Associate or Affiliate of any Acquiring Person, directly or indirectly (1) shall merge into the event causing Company or any of its Subsidiaries or otherwise combine with the Company or any of its Subsidiaries and the Company or such Subsidiary shall be the continuing or surviving corporation of such merger or combination and the Common Stock shall remain outstanding and the outstanding shares thereof shall not be changed into or exchanged for stock or other securities of the Company or of any other Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereofor cash or any other property, or is an acquisition of shares of Common Stock pursuant to a tender offer (2) shall sell or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from otherwise transfer in one or more investment banking firmstransactions, assets to be (x) fair to stockholders (taking into account all factors which such members the Company or any of its Subsidiaries in exchange for 15 percent or more of the Board deem relevant) and (y) otherwise in the best interests shares of any class of capital stock of the Company or any of its Subsidiaries, and its stockholdersthe Common Stock shall remain outstanding and unchanged, or
(B) directly or indirectly, any Acquiring Person, or any Associate or Affiliate of any Acquiring Person, shall (1) at least a majority in one or more transactions, transfer assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class of capital stock of the members Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class of capital stock of the Board Company or any of Directors who are not officers its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class of capital stock of the Company or any of its Subsidiaries or other securities exercisable for or convertible into shares of any class of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution by the Company or such Subsidiary to all holders of Common Stock), or (2) sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (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, or (3) receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full-time employment as a regular employee, or fees for serving as director, at rates in accordance with the Company's (or its Subsidiaries') past practices, or (4) receive the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance provided by the Company or any of its Subsidiaries, 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, or
(C) during any 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, after reasonable inquiry and investigationor any merger or consolidation of the Company with any of its Subsidiaries or any other similar transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person or any Affiliate or Associate of such Acquiring Person) which has the effect, directly or indirectly, of increasing by more than one percent 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 owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, or
(D) any Person shall become an Acquiring Person otherwise than pursuant to a Qualified Offer, then, promptly following the first occurrence and in each such case, but subject to Section 27 (covering exchange of any Section 11(a)(ii) EventRights for shares of Common Stock, without requiring exercise of Rights), proper provision shall be made so that each holder of a Right (except as provided below and in Section 7(e7(f)) hereofshall, on and after the later of (I) shall thereafter the date of the occurrence of an event described in clause (A), (B), (C) or (D) of this Section 11(a)(ii), or (II) the expiration of the period within which the Rights may be redeemed under Section 23 (as the same may have been amended under Section 26), have the right to receive, upon exercise thereof at the then current Purchase Price, the number of shares of Common Stock equal to the result obtained by (x) multiplying the then current Purchase Price by the then number of Units for which a Right is then exercisable and dividing that product by (y) 50 percent of the current market price per share of Common Stock (determined in accordance with Section 11(d)) on the date of the occurrence of the relevant event listed above in clause (A), (B), (C) or (D) of this subparagraph (ii); PROVIDED, HOWEVER, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13, then only the provisions of Section 13 ("flip-over" provisions) shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not consummate any such merger, combination, transfer or transaction referred to in any of such clauses (A), (B) and (C) unless prior thereto there shall be sufficient authorized but unissued Common Stock to permit the exercise in full of the Rights in accordance with the terms foregoing sentence, unless the Board of this AgreementDirectors has determined to issue Equivalent Stock in accordance with Section 7(a); PROVIDED, HOWEVER, that in lieu no case may the Company consummate any such merger, combination, transfer or transaction if at the time of or immediately after such transaction there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights. If the Company issues Equivalent Stock upon the exercise of any Rights pursuant to the immediately preceding paragraph, then, upon any such exercise, proper provision shall be made so that the holder of a number of one one-thousandths of a share of Preferred StockRight (except as provided in Section 7(f)) shall have the right to receive, upon such exercise at the then current Purchase Price, such number of shares or other units of Common Equivalent Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock Units for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority 50 percent of the members current market price per share or other unit of the Company's Board of Directors who are not officers Equivalent Stock of the Company determine that (determined on substantially the following same basis as is not permitted prescribed by Section 11(d) with respect to the terms valuation of Common Stock) on the date of occurrence of the relevant event listed above in clause (A), (B), (C) or (D) of this subparagraph (ii). If at any time the Company should be prohibited by law, by any provision of its articles of incorporation, or by any instrument or agreement or instrument to which the Company is a party on the date of this Agreement (oror by which it is bound, if the Board of Directors so determinesfrom issuing, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's or should be unable under its articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not to issue, sufficient Equivalent Stock to permit the exercise in full of the all outstanding Rights in accordance with the foregoing subparagraph (ii) sentence, then, in lieu of this Section 11(a)issuing such Equivalent Stock upon such exercise, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise shall pay to each holder of a Right (the "Current Value"except as provided in Section 7(f)) over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment surrender of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, Right as provided herein but without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or an amount in cash have an aggregate value for each Right equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such datePurchase Price.
(b) In case If after the Rights Record Date the Company shall fix sets a record date for the issuance of rights, options rights or warrants to all holders of Preferred Common Stock or Subject Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred to subscribe for or purchase Common Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) Subject Shares or securities convertible into Preferred Common Stock or equivalent preferred stock Subject Shares at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stockCommon Stock) less than the Current Market Price current market price per share (as determined pursuant to with Section 11(d)) hereof) per share of Preferred Stock 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 total number of shares of Preferred Common Stock and Subject Shares outstanding on such record date, date plus the number of shares of Preferred Common Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 Pricecurrent market price, and the denominator of which shall be the total number of shares of Preferred Common Stock and Subject Shares outstanding on such record date, date plus the number of additional shares of Preferred Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription or purchase price may be paid by delivery of consideration part paid, in whole or all of which may be in part, in a form other than cash, the value of such consideration shall be as determined in good faith by the Board board of Directors directors of the Company, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the RightsAgent. Shares of Preferred Stock 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 if such rights 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 fixedset.
(c) In case If the Company shall fix at any time after the Rights Record Date sets a record date for making a distribution to all holders on shares of Preferred Common Stock or the Subject Shares, whether by way of a dividend, distribution, reclassification of stock, recapitalization, reorganization or partial liquidation of the Company or otherwise (and including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) ), of subscription rights or warrants (excluding those referred to in Section 11(b)), evidences of indebtedness, cash (indebtedness or other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than (i) regular periodic cash dividends, (ii) a dividend payable in Preferred Common Stock or (iii) a distribution which is part of or is made in connection with a transaction to which Section 11(a)(ii) or Section 13 applies), then 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, of which the numerator shall be the current market price per share of Common Stock (determined with Section 11(d)) on such record date, less the fair market value applicable to one share of Common Stock (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 such assets or evidences of indebtedness or of such subscription rights or warrants so to be distributed, and of which the denominator shall be such current market price per share of Common Stock. Such adjustments shall be made successively whenever such a record date is fixed; and if such distribution is not so made, but including any dividendthe 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.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the The "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 30 consecutive Trading Days (as such term is hereinafter defineddefined below) immediately prior to such date, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in if the event that the Current Market Price current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current Market Price" current market price shall be properly appropriately adjusted to take into account reflect the current market price per share of Common Stock in connection with 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which market where the shares of Common Stock are listed or admitted to trading or, if trading. If the shares of Common Stock are not listed or admitted to trading on any national securities exchange, the last quoted then closing price or, if not so quoted, will be determined with reference to 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 Dealers, Inc., Automated Quotation System ("NASDAQ") or such other system then in use, or, if ). If on any such date, date the shares of Common Stock are not quoted by any suchsuch organization, the fair market value of such shares on such date as determined in good faith by the board of directors shall be used. Any such determination of current market price shall be described in a statement filed with the Rights Agent. For the purpose of any computation hereunder, the "current market price" of a Unit shall be deemed to be equal to the current market price per share of Common Stock, and the "current market price" of a Subject Share shall be deemed to be equal to the current market price per share of Common Stock divided by the number of Subject Shares which comprise a Unit.
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.:
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred outstanding Common Stock payable in shares of Preferred Common Stock, (B) subdivide the outstanding Preferred Common Stock, (C) combine the outstanding Preferred Common Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred outstanding Common Stock (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 in Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Common Stock transfer books of the Company were open, he such holder would have owned 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 this Section 11(a)(i) and under Section 11(a)(ii) hereof), 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) hereof).
(ii) In Subject to Section 24, in the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or Person shall become an Acquiring Person, unless the event causing such Person the 15% threshold to have become an Acquiring Person be crossed is a transaction set forth in Section 13(a) hereof, hereof or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors of the Company who are not officers of the CompanyCompany and who are not representatives, nominees, Affiliates or Associates of an Acquiring Person, after receiving advice from one or more investment banking firmsor financial advisers, to be (x) fair to stockholders shareholders (taking into account all factors which such members of the Board deem relevantof Directors deems relevant including, without limitation, prices which could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry its shareholders, employees, customers, suppliers and investigationcreditors, and the communities in which the Company does business, then, promptly following the first occurrence of any a Section 11(a)(ii) Event, proper provision shall be made so that each holder of a Right (except as otherwise provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then then-current Purchase Price in accordance with the terms of this Agreement, in lieu of a the number of one one-thousandths half shares of a share Common Stock for which such Right was exercisable immediately prior to the occurrence of Preferred Stocksuch Section 11(a)(ii) Event, such number of one-half shares of Common Stock of the Company as shall be equal to the result obtained by (x) multiplying the then then-current Purchase Price by the then number of one one-thousandths half shares of a share of Preferred Common Stock for which one such Right was exercisable immediately prior to the first occurrence of such Section 11(a)(ii) Event and (y) dividing that product by 50% of the current market price per one-half share of Common Stock on the date of occurrence of such Section 11(a)(ii) Event (determined pursuant to Section 11(d) hereof).
(iii) In the event that there shall not be sufficient authorized but unissued shares of Common Stock of the Company to permit the exercise in full of the Right in accordance with Section 11(a)(ii), the Company shall, except to the extent an election is made under Section 11(a)(iv), use its best efforts to have the shareholders of the Company take all such action as may be necessary to authorize additional shares of Common Stock of the Company for issuance upon exercise of the Rights.
(iv) In lieu of issuing shares of Common Stock upon the exercise of the Rights in accordance with Section 11(a)(ii), the Company may, if a majority of the Continuing Directors (or, if there are no Continuing Directors, the Board of Directors) determine that such action is necessary or appropriate and not contrary to the interests of holders of Rights, elect to issue or pay uniformly, subject to Section 7(e), with respect to all outstanding Rights, upon the exercise of the Rights, cash (including an offset against the Purchase Price), property, other securities or any combination thereof having an aggregate value per Right, as of the date immediately preceding the public announcement of such election, equal to the current market price as of such date of the one-half shares of Common Stock (determined pursuant to Section 11(d)) that otherwise would have been issuable pursuant to Section 11(a)(ii), which value shall be determined by a nationally recognized investment banking firm selected by a majority of the Continuing Directors (or the Board of Directors). For purposes of the preceding sentence, the value of any preferred stock which a majority of the Continuing Directors (or the Board of Directors) determines to be equivalent to the Common Stock shall be deemed to have the same value as the Common Stock without the necessity of a determination of value by an investment banking firm. Any such election by the Continuing Directors (or the Board of Directors) must be made and publicly announced within 90 days after the date on which the Section 11(a)(ii) Event occurs. Following the occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Continuing Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement (or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (yDirectors) may suspend the exercisability of the Rights until for a period of up to 90 days following the expiration occurrence of such Section 11(a)(ii) Event to the Substitution Period in order extent that the Continuing Directors (or the Board of Directors) have not determined whether to seek any authorization exercise the Company's right of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereofelection under this Section 11(a)(iv). In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In the case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Common Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred to subscribe for or purchase Common Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock Common Stock) at a price per share of Preferred Common Stock or per share of equivalent preferred stock (or having a conversion price per shareshare of Common Stock, if a security convertible into Preferred Stock or equivalent preferred stockCommon Stock) less than twice the Current Market Price current market price of one-half of one share of Common Stock on such record date (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Common Stock outstanding on such record date, plus the number of shares of Preferred Common Stock which the aggregate offering price of the total number of shares of Preferred Common Stock and/or equivalent preferred stock so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase purchase, at twice such Current Market Pricecurrent market price of one-half of one share of Common Stock, and the denominator of which shall be the number of shares of Preferred Common Stock outstanding on such record date, plus the number of additional shares of Preferred Common Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may shall be in a form other than cash, the value of such consideration shall be as determined in good faith by a majority of the Continuing Directors (or, if there are no Continuing Directors, the Board of Directors of the CompanyDirectors), whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the RightsAgent. Shares of Preferred Common Stock 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 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 a distribution to all holders of Preferred Common Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, indebtedness or cash (other than a regular quarterly or non-cash dividend out of the earnings or retained earnings of the Company), assets (other than (i) a regular periodic cash dividend or (ii) a dividend payable in Preferred Common Stock, but including any dividenddividend payable in stock other than Common Stock) or subscription rights 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 of one-half of one share of the Common Stock on such record date (as determined pursuant to Section 11(d)), less the fair market value (as determined in good faith by a majority of the Continuing Directors or, if there are no Continuing Directors, the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent) of the portion of the evidences of indebtedness or cash or non-cash assets so to be distributed on, or of such subscription rights or warrants applicable to, one-half of one share of the Common Stock, and the denominator of which shall be such current market price of one-half of one share of the Common Stock. 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.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per of one-half of one share of the Common Stock on any date shall be deemed to be one-half of the average of the daily closing prices per whole share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per current market price of one-half of one share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (Ai) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of such Common Stock (other than the Rights), or (Bii) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current Market Pricecurrent market price" per one-half of one share of such Common Stock shall be properly appropriately adjusted to take into account ex-dividend trading. The closing price for each 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchno
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares and Number of Rights. The Purchase Price, the number and kind of shares covered by of Series A Preferred Stock or other securities or property purchasable upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Series A Preferred Stock payable in shares of Series A Preferred Stock, (B) subdivide the outstanding shares of Series A Preferred Stock, (C) combine the outstanding shares of Series A Preferred Stock into a smaller number of shares, shares of Series A Preferred Stock or (D) issue any shares of its capital stock in a reclassification of the shares of Series A Preferred Stock (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) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, as the case may be, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Series A Preferred Stock transfer books of the Company were open, he the holder would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to Section 24 of this Rights Agreement and except as otherwise provided in this Section 11(a)(ii) and Section 11(a)(iii), in the event that:
(A) that any Person, shall, at any time after the Rights Dividend Declaration Date, be or become Person becomes an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at a price equal to the then then-current Purchase Price Price, in accordance with the terms of this Agreement, Rights Agreement and in lieu of a shares of Series A Preferred Stock, such number of shares of Common Stock (or at the option of the Company, such number of one one-thousandths of a share of Series A Preferred Stock, such number of shares of Common Stock of the Company ) as shall equal the result obtained by (x) multiplying the then then-current Purchase Price by the then number of one one-thousandths of a share of Series A Preferred Stock for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority 50% of the members then-current per share market price of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument ’s Common Stock (determined pursuant to which the Company is a party Section 11(d) hereof) on the date of this Agreement the occurrence of such event; provided, however, that the Purchase Price (or, if the Board of Directors as so determines, after the date of this Agreement), then in the event that adjusted) and the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than so receivable upon exercise of a Right shall thereafter be subject to further adjustment as appropriate in accordance with Section 11(f) hereof. Notwithstanding anything in this Rights Agreement to the contrary, however, from and after the time (the “invalidation time”) when any Person first becomes an Acquiring Person, any Rights that are beneficially owned by (x) any Acquiring Person (or any Affiliate or Associate of any Acquiring Person), (y) a transferee of any Acquiring Person (or any such Affiliate or Associate) who becomes a transferee after the invalidation time or (z) a transferee of any Acquiring Person (or any such Affiliate or Associate) who became a transferee prior to or concurrently with the invalidation time pursuant to either (I) a transfer from the Acquiring Person to holders of its equity securities or to any Person with whom it has any continuing agreement, arrangement or understanding, written or otherwise, regarding the transferred Rights or (II) a transfer that the Board of Directors has determined is part of a plan, arrangement or understanding, written or otherwise, which has the purpose or effect of avoiding the provisions of this paragraph, and subsequent transferees of such Persons, shall be null and void without any further action and any holder of such Rights shall thereafter have no rights whatsoever with respect to such Rights under any provision of this Rights Agreement. The Company shall use all reasonable efforts to ensure that the provisions of this Section 11(a)(ii) 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. From and after the invalidation time, no Right Certificate shall be issued pursuant to Section 3 or Section 6 hereof that represents Rights that are or have become null and void pursuant to the provisions of this paragraph, and any Right Certificate delivered to the Rights Agent that represents Rights that are or have become null and void pursuant to the provisions of this paragraph shall be cancelled. From and after the occurrence of an event specified in Section 13(a) hereof, any Rights that theretofore have not sufficient been exercised pursuant to this Section 11(a)(ii) shall thereafter be exercisable only in accordance with Section 13 and not pursuant to this Section 11(a)(ii). The Company shall give the Rights Agent written notice of the identity of any such Acquiring Person, Associate or Affiliate, or the nominee of any of the foregoing, and the Rights Agent may rely on such notice in carrying out its duties under this Agreement and shall be deemed not to have any knowledge of the identity of any such Acquiring Person, Associate or Affiliate, or the nominee of any of the foregoing unless and until it shall have received such notice.
(iii) The Company may at its option substitute for a share of Common Stock issuable upon the exercise of Rights in accordance with the foregoing subparagraph (ii) such number or fractions of shares of Series A Preferred Stock having an aggregate current market value equal to the current per share market price of a share of Common Stock. In the event that there shall be an insufficient number of Common Stock authorized but unissued (and unreserved) to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Board of Directors shall, with respect to such deficiency, to the extent permitted by applicable law and any material agreements then in effect to which the Company shall: is a party (A) determine the excess of (1x) the value of the Adjustment Shares shares of Common Stock issuable upon the exercise of a Right in accordance with the foregoing subparagraph (ii) (the "“Current Value"”) over (2y) the then-current Purchase Price multiplied by the number of one one-thousandths of shares of Series A Preferred Stock for which a Right was exercisable immediately prior to the time that the Acquiring Person became such (such excess being referred to herein as excess, the "“Spread"”), and (B) with respect to each RightRight (other than Rights which have become null and void pursuant to Section 11(a)(ii)), make adequate provision to substitute for the Adjustment Shares, shares of Common Stock issuable in accordance with subparagraph (ii) upon exercise of the Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the such Purchase Price, (3) Common shares of Series A Preferred Stock or other equity securities of the Company (including, without limitation, shares, shares or units fractions of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred which, by virtue of having dividend, voting and liquidation rights substantially comparable to herein as "common stock equivalents")), (4) debt securities those of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and thenStock, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be are deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 to have substantially the Company, whose determination shall be described in a statement filed with same value as the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchof
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right Right, and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event Except as otherwise provided in this Section 11(a) and in Section 7(e), if the Company shall at any time after the date of this Agreement (A) declare declares a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide subdivides the outstanding Preferred StockShares, (C) combine combines the outstanding Preferred Stock Shares into a smaller number of shares, or (D) issue issues any shares of its capital stock in a reclassification of the Preferred Stock 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) hereof, then the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination combination, or reclassification, as the case may be, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock issuable on such date, shall each will be proportionately adjusted so that the holder of any Right duly exercised after such applicable time shall will be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, whichstock that, if such Right had been exercised immediately prior to such date applicable time and at a time when the Preferred Stock Shares transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination combination, or reclassification; PROVIDED, HOWEVER, that in no event will the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall will be in addition to, and shall will be made prior to, any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) In the event that:
(A) Subject to Section 25 of this Agreement, if any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become becomes an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, and in each such case, proper provision will be made promptly so that, following the first occurrence of any Section 11(a)(ii) EventDistribution Date, each holder of a Right (Right, except as provided below and in Section 7(e) hereof) shall thereafter , will have the a right to receive, upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-hundredths of a Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement, Agreement and in lieu of a number of one one-thousandths of a share of Preferred StockShares, such number of shares of Common Stock Shares of the Company as shall is equal to the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Preferred Stock Share for which one a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, which following such first occurrence, shall occurrence will thereafter be referred to as the "Purchase PricePURCHASE PRICE" for each Right and for all purposes of this Agreement) by 50% of the then current per share market price of the Company's Common Shares (determined pursuant to Section 11(d) hereof) on the date of such first occurrence (such number of shares, the "ADJUSTMENT SHARES"); PROVIDED, HOWEVER, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof will apply and no adjustment will be made pursuant to this Section 11(a)(ii). If any Person shall become an Acquiring Person and the Rights shall then be outstanding, the Company shall not take any action which would eliminate or diminish the benefits intended to be afforded by the Rights.
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that If the number of shares of Common Stock which Shares that are authorized by the Company's articles or certificate of incorporation (as amended and in effect as of the relevant time) but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights Rights, are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment shall take all such action as may be necessary to authorize additional Common Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights. If the Company shall, the 30 day period set forth above after good faith effort, be unable to take all such action as may be extended necessary to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of authorize such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspensionCommon Shares, the Company shall issue then substitute, for each Common Share that would otherwise be issuable upon exercise of a public announcement stating Right, a number of Preferred Shares or fraction thereof such that the exercisability current per share market price of one Preferred Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as of the Rights has been temporarily suspended, as well as a public announcement at date of issuance of such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such datePreferred Shares or fraction thereof.
(b) In case If the Company shall fix fixes a record date for the issuance of rights, options options, or warrants to all holders of Preferred Stock Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Stock Shares (or shares having the same or more favorable rights, privileges privileges, and preferences as the shares of Preferred Stock Shares ("equivalent preferred stockshares")) or securities convertible into Preferred Stock Shares or equivalent preferred stock shares at a price per share of Preferred Stock Share or per share of equivalent preferred stock share (or having a conversion price per share, if a security convertible into Preferred Stock Shares or equivalent preferred stockshares) less than the Current Market Price then current per share market price of the Preferred Shares (as determined pursuant to defined in Section 11(d)) hereof) per share of Preferred Stock on such record date, the Purchase Price to be in effect after such record date shall will be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall will be the number of shares of Preferred Stock Shares outstanding on such record date, date plus the number of shares of Preferred Stock which Shares that the aggregate offering price of the total number of shares of Preferred Stock Shares and/or equivalent preferred stock 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, current market price and the denominator of which shall will be the number of shares of Preferred Stock Shares outstanding on such record date, date plus the number of additional shares of Preferred Stock Shares and/or equivalent preferred stock Preferred Shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); PROVIDED, HOWEVER, that in no event will the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid by delivery of in a consideration part or all of which may will be in a form other than cash, the value of such consideration shall will be as determined in good faith by the Board of Directors of the Company, whose determination shall will be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the RightsAgent. Preferred Shares of Preferred Stock owned by or held for the account of the Company shall will not be deemed outstanding for the purpose of any such computation. Such adjustment shall will be made successively whenever such a record date is fixed, ; and in the event that such rights rights, options or warrants are not so issued, the Purchase Price shall will be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(c) In case If the Company shall fix fixes a record date for the making of a distribution to all holders of the Preferred Stock Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of cash, evidences of indebtedness, cash (or other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred StockShares) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), but including any dividendthe Purchase Price to be in effect after such record date will be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which will be the then current per share market price of the Preferred Shares on such record date, less the fair market value (as determined in good faith by the Board of Directors of the Company, whose determination will be described in a statement filed with the Rights Agent) of the portion of the cash, evidences of indebtedness, or other assets so to be distributed or of such subscription rights or warrants applicable to one Preferred Share and the denominator of which will be such current per share market price of the Preferred Shares; PROVIDED, HOWEVER, that in no event will the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments will be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price will again be adjusted to be the Purchase Price that would then be in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" current per share market price" of Common Stock any Security (a "SECURITY" for the purpose of this Section 11(d)(i)) on any date shall will be deemed to be the average of the daily closing prices per share of such Common Stock Security for the 30 consecutive Trading Days (as such term is hereinafter defined) immediately prior to such date; PROVIDED, and for purposes of computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, howeverHOWEVER, that in the event that the Current Market Price current per share market price of the Common Stock Security is determined during a period following the announcement by the issuer of such Common Stock Security of (A) a dividend or distribution on Common Stock such Security payable in shares of Common Stock such Security or securities convertible into shares of Common Stock (other than the Rights)such shares, or (B) any subdivision, combination combination, or reclassification of such Common Stock, Security and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination combination, or reclassification, then, and in each such case, the "Current Market Price" shall current per share market price will be properly appropriately adjusted to take into account ex-dividend tradingreflect the current market price per share equivalent of such Security. The closing price for each day shall will be the last sale price, regular way, or, 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 NYSE orNational Association of Securities Dealers, Inc. (the "NASDAQ") National Market System, or if the shares of Common Stock are Security is not listed or admitted to trading on the NYSENASDAQ, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are Security is listed or admitted to trading ortrading, or if the shares of Common Stock are Security is not listed or admitted to trading on any national securities exchange, the last quoted price orprice, 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 NASDAQ Automated Quotation Quotations System ("NASDAQ") or such other system then in use, or, or if on any such date, date the shares of Common Stock are Security is not quoted by any suchsuch organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company. The term "TRADING DAY" means a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the transaction of business or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day.
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of the Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), the adjustment provided for in this Section 11(a)(i) shall be in addition to, and shall be made prior to, to any adjustment required pursuant to Section 11(a)(ii) hereof).
(ii) In the event that:event
(A) any Acquiring Person or any Associate or Affiliate of any Acquiring Person, shall, at any time after the Rights Dividend Declaration Datedate of this Agreement, directly or indirectly, (1) shall merge into the Company or otherwise combine with the Company, the Company shall be the continuing or surviving corporation of such merger or combination, and the Common Stock of the Company shall remain outstanding, (2) shall, in one or more transactions, transfer any assets to the Company in exchange (in whole or in part) for shares of the capital stock of the Company or for securities exercisable for or convertible into shares of the capital stock of the Company or otherwise obtain from the Company, with or without consideration, any additional shares of the capital stock of the Company or securities exercisable for or convertible into shares of the capital stock of the Company (other than as part of a pro rata distribution to all holders of the Common Stock of the Company), (3) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one transaction or a series of transactions), to, from or with, as the case may be, the Company or any of the Company's subsidiaries, other than incidental to the lines of business currently 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 $15,000,000, other than a transaction set forth in Section 13(a) hereof, (4) shall sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (in one transaction or a series of transactions), to, from or with the Company or any of the Company's subsidiaries, assets on terms and conditions less favorable to the Company than the Company would be able to obtain through arm's-length negotiation with an unaffiliated third party, other than a transaction set forth in Section 13(a) hereof, (5) shall receive any compensation from the Company or any of the Company's subsidiaries other than compensation for full-time employment as a regular employee at rates in accordance with the Company's (or its subsidiaries') past practices, or (6) shall receive a direct or indirect benefit (except proportionately as a stockholder), 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
(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 an Acquiring Personthe Beneficial Owner of 20% or more of the shares of Common Stock then outstanding, unless the event causing such Person the 20% threshold to have become an Acquiring Person be crossed is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the CompanyContinuing Directors, after receiving advice from one or more investment banking firms, to be (xa) at a price that is fair to stockholders shareholders (taking into account all factors which such members of that the Board Continuing Directors deem relevantrelevant including, without limitation, prices that could reasonably be achieved if the Company or its assets were sold on an orderly basis designed to realize maximum value) and (yb) otherwise in the best interests of the Company and its stockholdersshareholders (other than the Person or any Affiliate or Associate thereof on whose behalf the offer is being made), or
(BC) during such time as there is an Acquiring Person, (1) there shall be any failure to declare and pay at least the regular date therefor any full quarterly dividends (whether or not cumulative) on any outstanding Preferred Stock of the Company (except to the extent such declaration or payment would be prohibited under the laws of the Company's jurisdiction of incorporation), (2) there shall be any reduction in the annual rate of dividends paid on the Common Stock (except to reflect any subdivision of the Common Stock or as required under the laws of the Company's jurisdiction of incorporation or as approved by a majority of the members Continuing Directors and the Continuing Directors constitute a majority of the Board of Directors who are not officers or by the holders of 66-2/3% percent or more of the then outstanding shares of Common Stock beneficially owned by Persons other than the Acquiring Person or its Affiliates or Associates), (3) there shall be a failure to increase the annual rate of dividends as necessary to reflect any reclassification (including any reverse stock split), recapitalization, reorganization or any similar transaction which has the effect of reducing the number of outstanding shares of the Common Stock (except to the extent such increase in the rate of dividends would be prohibited under the laws of the Company's jurisdiction of incorporation), or (4) there shall be any reclassification of securities (including any reverse stock split), or recapitalization of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of or any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock merger or consolidation of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number with any of one one-thousandths its subsidiaries or any other transaction or series of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument transactions to which the Company or any of its subsidiaries is a party on (whether or not with or into or otherwise involving an Acquiring Person) which has the date effect, directly or indirectly, of this Agreement (or, if increasing by more than 1% the Board proportionate share of Directors so determines, after the date of this Agreement), then in the event that the number of outstanding shares of Common Stock which are authorized by the Company's articles any class of equity or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity convertible securities of the Company (including, without limitation, shares, or units any of shares, of preferred stock its subsidiaries which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, is directly or (6) indirectly owned by any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek Acquiring Person or any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event Associate or Affiliate of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchAcquiring Person,
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by or other securities subject to purchase upon exercise of each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement Rights Dividend Declaration Date (A) declare a dividend on the outstanding shares of Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding shares of Preferred Stock, (C) combine the outstanding shares of Preferred Stock into a smaller number of shares, shares or (D) issue any otherwise reclassify the outstanding shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification. If an event occurs which that would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to Sections 23 and 24 of this Agreement, in the event that:
(A) any Person, Person shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is (1) a transaction set forth in Section 13(aFlip- Over Event or (2) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding Permitted Offer (PROVIDED that this clause (2) shall cease to apply if such Acquiring Person thereafter becomes the Beneficial Owner of any additional shares of Common Stock at other than pursuant to such Permitted Offer or a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Companytransaction set forth in Section 13(a) or 13(d) hereof), after receiving advice from one or more investment banking firms, to be then (x) fair the Purchase Price shall be adjusted to stockholders (taking into account all factors be the Purchase Price immediately prior to the first occurrence of a Flip-In Event multiplied by the number of Fractional Shares of Preferred Stock for which a Right was exercisable immediately prior to such members of the Board deem relevant) first occurrence and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below in Section 11(a)(iii) and in Section 7(e) hereof) shall thereafter have the right to receive, upon exercise thereof at a price equal to the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share shares of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying dividing the then current Purchase Price by 50% of the then Current Market Price per share of Common Stock on the date of such first occurrence (such number of one one-thousandths shares, the "Adjustment Shares"); PROVIDED that the Purchase Price and the number of a share Adjustment Shares shall be further adjusted as provided in this Agreement to reflect any events occurring after the date of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement).
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which that are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: , to the extent permitted by applicable law and regulation, (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (computed using the Current Market Price used to determine the number of Adjustment Shares) (the "Current Value") over (2) the Purchase Price (such excess being is herein referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon the exercise of the Rights and payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which (including, without limitation, the Preferred Stock) that the Board of Directors of the Company has deemed determined to have substantially the same value as shares of Common Stock (such shares of preferred stock being are herein referred to herein as "common stock equivalentsCommon Stock Equivalents")), (4) debt securities of the Company, (5) other assets, assets or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; providedPROVIDED, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Flip-In Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Flip-In Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 30-day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Flip-In Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company or the Board of Directors determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of the Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Flip-In Trigger Date and the value of any "common stock equivalent" Common Stock Equivalent shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stockEquivalent Preferred Stock")) or securities convertible into Preferred Stock or equivalent preferred stock Equivalent Preferred Stock at a price per share of Preferred Stock or per share of equivalent preferred stock Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stockEquivalent Preferred Stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which that the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock 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 by delivery of consideration consideration, part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 or warrants are not so issued, the Purchase Price shall be adjusted to be the Purchase Price which that would then be in effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividenddividend payable in stock other than Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), the Purchase Price to be in effect after such record date shall be determined by multiplying the Purchase Price in effect immediately prior to such record date by a fraction, the numerator of which shall be the Current Market Price per share of Preferred Stock 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 and shall be binding on the Rights Agent) of the portion of the cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a share of Preferred Stock and the denominator of which shall be such Current Market Price per share of Preferred Stock. 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 be adjusted to be the Purchase Price that would have been in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock of a Person on any date shall be deemed to be the average of the daily closing prices Closing Prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices Closing Prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; providedPROVIDED, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than a regular quarterly cash dividend or the dividend of the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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, shall not have occurred prior to the commencement of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, then, and in each such case, the "Current Market Price" Price shall be properly adjusted to take into account ex-dividend trading. The closing price for each day If the Common Stock is not publicly held or not 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 last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid Rights Agent 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchshall be conclusive for all purposes.
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares or other property covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock Common Shares payable in shares of Preferred StockCommon Shares, (B) subdivide the outstanding Preferred StockCommon Shares, (C) combine the outstanding Preferred Stock Common Shares (by reverse stock split or otherwise) into a smaller number of sharesCommon Shares, or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Common Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, in each such event, except as otherwise provided in this Section 11(a) and Section 7(e) hereof: (1) each of the Rights outstanding at the time of the record date for such dividend or the effective date of such subdivision, combination or reclassification shall be proportionately adjusted to that number of Rights (calculated to the nearest one ten-thousandth (1/10,000) of a Right) equal to a fraction (the "EXCHANGE RATIO"), the numerator of which shall be the total number of Common Shares or shares of capital stock issued in such reclassification of the Common Shares outstanding immediately following such time and the denominator of which shall be the total number of Common Shares outstanding immediately prior to such time, and the number of Rights that shall thereafter be issued with respect to each Common Share or share of such other capital stock that shall become outstanding thereafter prior to the Distribution Date shall be equal to the total number of outstanding Rights immediately after such event (as adjusted pursuant to this clause (1)) divided by the total number of outstanding Common Shares or shares of such other capital stock immediately after such event (subject to further adjustment pursuant to the provisions of this Agreement); (2) the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification shall be adjusted so that the Purchase Price thereafter shall equal the result obtained by dividing the Purchase Price in effect immediately prior to such time by the Exchange Ratio; PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of such Right; and (3) the number of Preferred Shares or shares of such other capital stock issuable upon the exercise of each Right shall remain unchanged immediately after such event, but, in the event of a reclassification, and the number and kind of shares issuable upon the exercise of each Right immediately after such reclassification shall be adjusted to be the kind of shares of Preferred Stock or such other capital stockstock issued in such reclassification, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, upon payment of the Purchase Price then in effect, the aggregate number and kind of shares of rather than Preferred Stock or other capital stock, as the case may be, which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassificationShares. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to Section 24 of this Agreement, in the event that:
(A) any Persona Triggering Event shall have occurred, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, then promptly following the first occurrence of any Section 11(a)(ii) such Triggering Event, proper provision shall be made so that each holder of a Right (Right, except as provided below and in Section 7(e) hereof) , shall thereafter have the right to receivereceive for each Right, upon exercise thereof at the then current Purchase Price in accordance with the terms of this AgreementAgreement and payment of the then-current Total Exercise Price, in lieu of a number of one one-thousandths of a share of Preferred StockShare, such number of shares of Common Stock Shares of the Company Com- pany as shall equal the result obtained by (x) multiplying the then then-current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock Share for which one a Right was exercisable (or would have been exercisable if the Distribution Date had occurred) immediately prior to the first occurrence of a Section 11(a)(ii) Triggering Event, and (y) dividing that product by 50% of the current per share market price (which, following determined pursuant to Section 11(d) hereof) for Common Shares on the date of occurrence of the Triggering Event (such first occurrence, shall thereafter be number of shares being hereinafter referred to as the "Purchase Price" for each Right and for all purposes of this AgreementADJUSTMENT SHARES").
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers The right to buy Common Shares of the Company determine that the following is pursuant to Section 11(a)(ii) hereof shall not permitted by the terms arise as a result of any agreement or instrument Person becoming an Acquiring Person through an acquisition of Common Shares pursuant to which a Permitted Offer.
(iv) In lieu of issuing Common Shares in accordance with Section 11(a)(ii) hereof, the Company is a party on the date of this Agreement (ormay, if the Board of Directors so determinesdetermines that such action is necessary or appropriate and not contrary to the interest of holders of Rights (and, after the date of this Agreement), then in the event that the number of shares of Common Stock Shares which are authorized by the Company's articles or certificate Articles of incorporation Incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with Rights, or if any necessary regulatory approval for such issuance has not been obtained by the foregoing subparagraph (ii) of this Section 11(a)Company, the Company shall: ): (A) determine the excess of (1) the value of the Adjustment Common Shares issuable upon the exercise of a Right (the "Current ValueCURRENT VALUE") over (2) the Purchase Price (such excess being referred to herein as excess, the "SpreadSPREAD"), ) and (B) with respect to each Right, make adequate provision to substitute for the Adjustment such Common Shares, upon payment exercise of the applicable Purchase PriceRights, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, shares or units of shares, shares of preferred stock any series of Preferred Stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock Shares (such shares or units of preferred stock being referred to shares of Preferred Stock are herein as called "common stock equivalentsCOMMON STOCK EQUIVALENTS")), except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, (4) debt securities of the Company, except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, (5) other assets, assets or (6) any combination of the foregoing foregoing, having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; providedPROVIDED, howeverHOWEVER, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 thirty (30) days following the later of (x) the first occurrence of a Section 11(a)(ii) Triggering Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section SECTION 11(a)(ii) Trigger DateTRIGGER DATE"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock Shares (to the extent available) ), except to the extent that the Company has not obtained any necessary shareholder or regulatory approval for such issuance, and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock Shares could be authorized for issuance upon exercise in full of the RightsRights or that any necessary regulatory approval for such issuance will be obtained, the 30 thirty (30) day period set forth above may be extended to the extent necessary, but not more than 90 ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder shareholder approval for the authorization of such additional shares or take action to obtain such regulatory approval (such period, as it may be extended, the "Substitution PeriodSUBSTITUTION PERIOD"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii11(a)(iv), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, Rights and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares shares, to take any action to obtain any required regulatory approval and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii11(a)(iv), the value of a share of the Common Stock Shares shall be the Current Market Price current per share market price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock Shares on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalentCOMMON STOCK EQUIVALENT" shall be deemed to have the same value as the Common Stock Shares on such date.
(b) In case the Company shall shall, at any time after the date of this Agreement, fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock Common Shares or of any class or series of Equivalent Shares entitling them to subscribe for or purchase such holders (for a period expiring within 45 forty-five (45) calendar days after such record date) Preferred Stock (to subscribe for or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) purchase Common Shares or Equivalent Shares or securities convertible into Preferred Stock Common Shares or equivalent preferred stock Equivalent Shares at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock Common Shares or equivalent preferred stockEquivalent Shares) less than the Current Market Price then current per share market price of the Common Shares or Equivalent Shares (as determined pursuant to defined in Section 11(d)) hereof) per share of Preferred Stock on such record date, then, in each such case, 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 shares of Preferred Stock Common Shares and Equivalent Shares (if any) outstanding on such record date, plus the number of shares of Preferred Stock Common Shares or Equivalent Shares, as the case may be, which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock Common Shares or Equivalent Shares, as the case may be, 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 Pricecurrent market price, and the denominator of which shall be the number of shares of Preferred Stock Common Shares and Equivalent Shares (if any) outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock Common Shares or Equivalent Shares, as the case may be, to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription price may be paid by delivery of in a consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Common Shares of Preferred Stock and Equivalent Shares owned by or held for the account of the Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment shall be made successively whenever such a record date is fixed, and in the event that such rights 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 shall, at any time after the date of this Agreement, fix a record date for the making of a distribution to all holders of Preferred Stock the Common Shares or of any class or series of Equivalent Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash indebtedness or assets (other than a regular quarterly cash dividend out of the earnings dividend, if any, or retained earnings of the Company), assets (other than a dividend payable in Preferred StockCommon Shares) or subscription rights, but including any dividendoptions or warrants (excluding those referred to in Section 11(b)), then, in each such case, 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 (as determined pursuant to Section 11(d) hereof) of a Common Share or an Equivalent Share 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 cash, assets or evidences of indebtedness so to be distributed or of such subscription rights or warrants applicable to a Common Share or Equivalent Share, as the case may be, and the denominator of which shall be such current market price (as determined pursuant to Section 11(d) hereof) of a Common Share or Equivalent Share on such record date. 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 be adjusted to be the Purchase Price which would have been in effect if such record date had not been fixed.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii11(a)(iv) hereof, the "Current Market PriceCURRENT PER SHARE MARKET PRICE" per share of Common Stock any security (a "SECURITY" for the purpose of this Section 11(d)) on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Security for the 30 thirty (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)(iii11(a)(iv) hereof, the "Current Market PriceCURRENT PER SHARE MARKET PRICE" per share of Common Stock any Security on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Security for the 10 ten (10) consecutive Trading Days immediately following prior to such date; providedPROVIDED, howeverHOWEVER, that in the event that the Current Market Price current per share market price of the Common Stock Security is determined during a period following the announcement by the issuer of such Common Stock Security of (Ai) a dividend or distribution on Common Stock such Security payable in shares of Common Stock such Security or securities convertible into such shares of Common Stock (other than the Rights), or (Bii) any subdivision, combination or reclassification of such Common StockSecurity, and prior to the expiration of the requisite 30 thirty (30) Trading Day or 10 ten (10) 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" current per share market price shall be properly appropriately adjusted to take into account ex-dividend tradingreflect the current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the NYSE New York Stock Exchange or, if the shares of Common Stock are Security is not listed or admitted to trading on the NYSENew 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 shares of Common Stock are Security is listed or admitted to trading or, if the shares of Common Stock are Security is not listed or admitted to trading on any national securities exchange, the last quoted sale price or, if such last sale price is not so quotedreported, 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchin
Appears in 1 contract
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTSNumber and Kind of Shares or Number of Rights. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.:
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Preferred Stock payable in shares of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In the event that:
(A) any Person, shallalone or together with its Affiliates and Associates, at any time after the Rights Dividend Declaration Date, be or shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to then proper provision shall be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall, for a period of 60 days after the later of (i) the occurrence of any such event or (ii) the effective date of an appropriate registration statement under the Act pursuant to Section 9 hereof, have a right to receive, upon exercise thereof at a price equal to the then current Purchase Price in accordance with the terms of this Agreement, such number of shares of Common Stock of the Company (or, in the discretion of the Board of Directors, one two-hundredths of a share of Preferred Stock) as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one two-hundredths of a share of Preferred Stock for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event and (y) dividing that product by 50% of the then current per share market price of the Company's Common Stock (determined pursuant to Section 11(d) hereof) on the date of such first occurrence (such number of shares being referred to as the "Adjustment Shares"); provided, however, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that there shall not be sufficient treasury shares or authorized but unissued (and unreserved) shares of Common Stock to permit the exercise in full of the Rights in accordance with the foregoing Section 11(a)(ii) and the Rights become so exercisable (and the Board has determined to make the Rights exercisable into fractions of a share of preferred stock), notwithstanding any other provision of this Agreement, to the extent necessary and permitted by applicable law, each Right shall thereafter have represent the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of (A) a number of one one-thousandths shares (or fractions of a share of Preferred Stock, such number of shares shares) of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior up to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the maximum number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (iimay permissibly be issued) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment a number of the applicable Purchase Price, (1) cash, (2) one two-hundredths of a reduction in the Purchase Price, (3) Common share of Preferred Stock or a number of (or fractions of) other equity securities of the Company (includingor, without limitationin the discretion of the Board, shares, or units of shares, of preferred stock debt securities) which the Board of Directors of the Company has deemed determined to have substantially the same aggregate current market value (determined pursuant to Sections 11(d)(i) and 11(d)(ii) hereof, to the extent applicable) as shares one share of Common Stock (such number of shares (or fractions of preferred stock being referred to herein as "common stock equivalents")), shares) of Preferred Stock (4) or other equity securities or debt securities of the Company) being referred to as a "capital stock equivalent"), (5) other assets, or (6) any combination of equal in the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board number of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the CompanyAdjustment Shares; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later sufficient shares of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date")Common Stock and/or capital stock equivalents are unavailable, then the Company shall be obligated to delivershall, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and thenpermitted by applicable law, if necessary, cash, which shares and/or cash have an aggregate value equal take all such action as may be necessary to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient authorize additional shares of Common Stock could or capital stock equivalents for issuance upon exercise of the Rights, including the calling of a meeting of shareholders; and provided, further, that if the Company is unable to cause sufficient shares of Common Stock and/or capital stock equivalents to be authorized available for issuance upon exercise in full of the Rights, then each Right shall thereafter represent the 30 day period set forth above may right to receive the Adjusted Number of Shares upon exercise at the Adjusted Purchase Price (as such terms are hereinafter defined). As used herein, the term "Adjusted Number of Shares" shall be extended equal to that number of shares (or fractions of shares) of Common Stock (and/or capital stock equivalents) equal to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization product of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, the number of Adjustment Shares and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 is the number of shares of Preferred Common Stock outstanding on such record date, plus the number (and/or shares or units of shares of Preferred Stock which the aggregate offering price common stock equivalents) available for issuance upon exercise of the total number of shares of Preferred Stock and/or equivalent preferred stock 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, Rights and the denominator of which shall be is the aggregate number of Adjustment Shares otherwise issuable upon exercise in full of all Rights (assuming there were a sufficient number of shares of Preferred Common Stock outstanding on available) (such record date, plus fraction being referred to as the number of additional shares of Preferred Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible"Proration Factor"). In case such subscription price may be paid by delivery The "Adjusted Purchase Price" shall mean the product of consideration part or all of which may be in a form other than cash, the value of such consideration shall be as determined in good faith by Purchase Price and the Proration Factor. The Board of Directors of the Companymay, whose determination shall be described in a statement filed with the Rights Agent and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock owned by or held for the account of the Company but shall not be deemed outstanding for required to, establish procedures to allocate 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 or warrants are not so issued, the Purchase Price shall be adjusted right 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in receive shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration capital stock equivalents upon exercise of the requisite 30 Trading Day or 10 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 Rights among holders 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchRights.
Appears in 1 contract
Samples: Shareholder Rights Agreement (El Paso Energy Corp/De)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares Series A Preferred 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.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare a dividend on the Series A Preferred Stock Shares payable in shares of Series A Preferred StockShares, (B) subdivide the outstanding Series A Preferred StockShares, (C) combine the outstanding Series A Preferred Stock Shares into a smaller number of shares, Series A Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Series A Preferred Stock 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) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Series A Preferred Stock Shares transfer books of the Company were open, he would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, 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) hereof.
(ii) In Subject to the following paragraph of this subparagraph (ii) and to Section 24 of this Agreement, in the event that:
(A) any Person (other than an Exempt Person), shallalone or together with its Affiliates and Associates, at any becomes an Acquiring Person (other than through an acquisition described in subparagraph (iii) of this paragraph (a)) or (B) during such time after the Rights Dividend Declaration Date, be or become as there is an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereofthere shall be any reclassification of securities (including any reverse stock split), or is an acquisition recapitalization or reorganization of shares the Company which has the effect, directly or indirectly, of Common Stock pursuant to a tender offer or an exchange offer for all increasing by more than 1% the proportionate share of the outstanding shares of Common Stock at a price and on terms determined by at least a majority any class of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests equity securities of the Company and or any of its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of Subsidiaries beneficially owned by any Section 11(a)(ii) EventAcquiring Person or any Affiliate or Associate thereof, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the a right to receive, upon exercise thereof at a price equal to the then current Purchase Price multiplied by the number of one one-hundredths of a Series A Preferred Share for which a Right is then exercisable, in accordance with the terms of this Agreement, Agreement and in lieu of a number of one one-thousandths of a share of Series A Preferred StockShares, such number of shares of Common Stock Shares of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths hundredths of a share of Series A Preferred Stock Share for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) dividing 50% of the then current per share market price of the Company's Common Shares (determined pursuant to Section 11(d) hereof) on the date such Person became an Acquiring Person. From and after the occurrence of the earlier of the events described in clauses (A) and (B) above, any Rights that product are or were acquired or beneficially owned by such Acquiring Person (which, following or any Associate or Affiliate of such first occurrence, Acquiring Person) shall be void without any further action and any holder of such Rights shall thereafter be referred have no right to as the "Purchase Price" for each Right and for all purposes exercise such Rights under any provision of this Agreement)Agreement and no rights whatsoever with respect to such Rights, whether under any provision of this Agreement or otherwise. No Rights Certificate shall be issued pursuant to Section 3 that represents Rights beneficially owned by an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof; no Rights Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and any Rights Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be void pursuant to the preceding sentence or any Associate or Affiliate thereof shall be canceled.
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers The right to purchase Common Shares of the Company determine that the following is pursuant to subparagraph (ii) of this paragraph (a) shall not permitted by the terms arise as a result of any agreement Person becoming an Acquiring Person through an acquisition of Common Shares pursuant to a tender offer made in the manner prescribed by Section 14(d) of the Exchange Act and the rules and regulations promulgated thereunder; provided, however, that (A) such tender offer shall provide for the acquisition of all the outstanding Common Shares held by any Person other than such Person and its Affiliates for cash and (B) such acquisition shall cause such Person, together with all Affiliates and Associates of such Person, to be the Beneficial Owner of 90% or instrument to which more of the Company is a party on the date of this Agreement Common Shares then outstanding.
(or, if the Board of Directors so determines, after the date of this Agreement), then in iv) In the event that the number of shares of there shall not be sufficient Common Stock which are authorized by the Company's articles or certificate of incorporation Shares issued but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient authorized but unissued to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment shall take all such action as may be necessary to authorize additional Common Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any the Company shall, after good faith effort, be unable to take all such suspensionaction as my be necessary to authorize such additional Common Shares, the Company shall issue substitute, for each Common Share that would otherwise be issuable upon exercise of a public announcement stating Right, a number of Series A Preferred Shares or fraction thereof such that the exercisability current per share market price of one Series A Preferred Share multiplied by such number or fraction is equal to the current per share market price of one Common Share as of the Rights has been temporarily suspended, as well as a public announcement at date of issuance of such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such dateSeries A Preferred Shares or fraction thereof.
(b) In case If the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Series A Preferred Stock Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Series A Preferred Stock Shares (or shares having the same rights, privileges and preferences as the shares of Series A Preferred Stock Shares ("equivalent preferred stockSeries A Preferred Shares")) or securities convertible into Series A Preferred Stock Shares or equivalent preferred stock Series A Preferred Shares at a price per share of Series A Preferred Stock Share or per share of equivalent preferred stock Series A Preferred Share (or having a conversion price per share, if a security convertible into Series A Preferred Stock Shares or equivalent preferred stockSeries A Preferred Shares) less than the Current Market Price then current per share market price of the Series A Preferred Shares (as determined pursuant to defined in Section 11(d)) hereof) per share of Preferred Stock 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 shares of Series A Preferred Stock Shares outstanding on such record date, date plus the number of shares of Series A Preferred Stock Shares which the aggregate offering price of the total number of shares of Series A Preferred Stock Shares and/or equivalent preferred stock Series A Preferred Shares so to be offered (and/or the aggregate initial conversion price of the convertible securities so to be offered) would purchase at such Current Market Price, current market price and the denominator of which shall be the number of shares of Series A Preferred Stock Shares outstanding on such record date, date plus the number of additional shares of Series A Preferred Stock Shares and/or equivalent preferred stock Series A Preferred Shares to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid by delivery of in a consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the RightsAgent. Series A Preferred Shares of Preferred Stock 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 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 If the Company shall fix a record date for the making of a distribution to all holders of the Series A Preferred Stock Shares (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash indebtedness or assets (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Series A Preferred StockShares) or subscription rights or warrants (excluding those referred to in Section 11(b) hereof), but including any dividendthe 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 then current per share market price of the Series A Preferred Shares 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 or of such subscription rights or warrants applicable to one Series A Preferred Share and the denominator of which shall be such current per share market price of the Series A Preferred Shares; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" current per share market price" of Common Stock any security (a "Security" for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Security for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price current per share market price of the Common Stock Security is determined during a period following the announcement by the issuer of such Common Stock Security of (A) a dividend or distribution on Common Stock such Security payable in shares of Common Stock such Security or securities convertible into shares of Common Stock (other than the Rights)such shares, or (B) any subdivision, combination or reclassification of such Common Stock, Security and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current Market Price" current per share market price shall be properly appropriately adjusted to take into account ex-dividend tradingreflect the current market price per share equivalent of such Security. The closing price for each day shall be the last sale price, regular way, or, in case no such sale takes place on such day, the average of the closing bid and asked prices, regular way, in either case as reported in the principal consolidated transaction reporting system with respect to securities listed or admitted to trading on the NYSE New York Stock Exchange or, if the shares of Common Stock are Security is not listed or admitted to trading on the NYSENew 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 shares of Common Stock are Security is listed or admitted to trading or, if the shares of Common Stock are Security is not listed or admitted to trading on any national securities exchange, the last quoted price or, if not so quoted, the average of the high bid and low asked prices in the over-the-counter market, as reported by the National Association of Securities Dealers Dealers, Inc. Automated Quotation Quotations System ("NASDAQ") or such other system then in use, or, if on any such date, date the shares of Common Stock are Security is not quoted by any suchsuch organization, the average of the closing bid and asked prices as furnished by a professional market maker making a market in the Security selected by the Board of Directors of the Company. If on any such date no market maker is making a market in the Security, the fair value of the Security on such date as determined in good faith by the Board of Directors shall be used. The term "Trading Day" shall mean a day on which the principal national securities exchange on which the Security is listed or admitted to trading is open for the transaction of business or, if the Security is not listed or admitted to trading on any national securities exchange, a Business Day. If the Security is not publicly held or not listed or traded, "current per share market price" shall mean the fair value per share as determined in good faith by the Board of Directors, whose determination shall be described in a statement filed with the Rights Agent.
Appears in 1 contract
Samples: Rights Agreement (Provant Inc)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares one one-thousandths of a share of Preferred Stock covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company shall at any time after the date of this Agreement (A) declare authorize a dividend on the Preferred Stock payable in shares of the Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller number of shares, shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock (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) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, issuable on such date, shall be proportionately adjusted so that the holder of any Right exercised after such time shall be entitled to receive, receive upon payment of the Purchase Price then in effect, effect the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock (or Common Stock) transfer books of the Company were open, he or she would have owned 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 this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In Subject to Sections 23 and 24 of this Agreement, in the event that:
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become Person becomes an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, each holder of a Right (except as provided below and in Section 7(e) hereof) shall thereafter have the a right to receive, upon exercise thereof at a price equal to the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred Stock, such number of shares of Common Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price multiplied by the then number of one one-thousandths of a share of Preferred Stock for which such Right is then exercisable, in accordance with the terms of this Agreement and in lieu of shares of Preferred Stock, such number of shares of the Common Stock of the Company as shall equal the result obtained by (1) multiplying the then current Purchase Price by the number of one Right was exercisable immediately prior to the first occurrence one-thousandths of a Section 11(a)(ii) Event, share of Preferred Stock for which a Right is then exercisable and (y) dividing that product by (which, following 2) 50% of the then current per share market price of the Common Stock of the Company (determined pursuant to Section 11(d) hereof) on the date of the occurrence of such first occurrence, shall thereafter be event (such number of shares are hereinafter referred to as the "Purchase Price" for each Right Adjustment Shares"). From and for all purposes after the occurrence of such event, any Rights that are or were acquired or beneficially owned by any Acquiring Person (or any Associate or Affiliate of such Acquiring Person) shall be null and void, and any holder of such Rights shall thereafter have no right to exercise such Rights under any provision of this Agreement). No Right Certificate shall be issued pursuant to Section 3 hereof that represents Rights beneficially owned by an Acquiring Person whose rights would be null and void pursuant to the preceding sentence or any Associate or Affiliate thereof. No Right Certificate shall be issued at any time upon the transfer of any Rights to an Acquiring Person whose Rights would be null and void pursuant to the preceding sentence or any Associate or Affiliate thereof or to any nominee of such Acquiring Person, Associate or Affiliate. Any Right Certificate delivered to the Rights Agent for transfer to an Acquiring Person whose Rights would be null and void pursuant to the preceding sentence shall be canceled.
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in In the event that the number of shares of Common Stock which are authorized by the Company's articles or certificate of incorporation charter but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (shall take all such excess being referred action as may be necessary to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as authorize additional shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities for issuance upon exercise of the CompanyRights, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of and the Company based upon may, in the advice discretion of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, howeverand shall, if in the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then event the Company shall be obligated unable to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (take all such action as may be necessary to the extent available) and then, if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient authorize such additional shares of Common Stock could be authorized Stock, substitute, for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a each share of Common Stock shall that would otherwise be issuable upon exercise of a Right, a number of shares of Preferred Stock or fraction thereof such that the Current Market Price (as determined pursuant to Section 11(d) hereof) current per share market price of one share of Preferred Stock multiplied by such number or fraction is equal to the current per share market price of one share of Common Stock as of the Common date of issuance of such share of Preferred Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such dateor fraction thereof.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares securities having substantially the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stockEquivalent Preferred Stock")) or securities convertible into Preferred Stock or equivalent preferred stock Equivalent Preferred Stock at a price per share of Preferred Stock or per share of equivalent preferred stock Equivalent Preferred Stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stockEquivalent Preferred Stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) then current per share market price of the Preferred Stock or Equivalent Preferred Stock, as the case may be, 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 shares of Preferred Stock outstanding on such record date, date plus the number of shares of Preferred Stock or Equivalent Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock 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, current market price and the denominator of which shall be the number of shares of Preferred Stock outstanding on such record date, date plus the number of additional shares of Preferred Stock and/or equivalent preferred stock Equivalent Preferred Stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible); provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of stock of the Company issuable upon exercise of one Right. In case such subscription price may be paid by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing or surviving corporation) of evidences of indebtedness, cash indebtedness or assets (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock) or subscription rights or warrants (excluding those referred to in Section 11 (b) hereof), but including any dividendthe 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 then current per share market price of the Preferred Stock 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 or of such subscription rights or warrants applicable to one share of Preferred Stock and the denominator of which shall be such current per share market price of the Preferred Stock; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock to the Company to be issued upon exercise of one Right. Such adjustments shall be made successively whenever such a record date is fixed; and in the event that such distribution is not so made, the Purchase Price shall again be adjusted to be the Purchase Price which would then be in effect if such record date had not been fixed.
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" current per share market price" of Common Stock any security (a "Security" for the purpose of this Section 11(d)(i)) on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock Security for the 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(but not including) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price current per share market price of the Common Stock Security is determined during a the period following the announcement by the issuer of such Common Stock Security of (A) a dividend or distribution on Common Stock such Security payable in shares of Common Stock such Security or securities convertible into such shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common StockSecurity, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Common Stock are not listed or admitted to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any such
Appears in 1 contract
Samples: Shareholder Rights Agreement (Mack Cali Realty Corp)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event the Company Corporation shall at any time after the effective date of this Agreement (A) declare a dividend on the Preferred Stock Shares payable in shares of Preferred StockShares, (B) subdivide the outstanding Preferred StockShares, (C) combine the outstanding Preferred Stock Shares into a smaller number of shares, Preferred Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Shares (including any such reclassification in connection with a consolidation or merger in which the Company Corporation is the continuing or surviving corporation), except as otherwise provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock Shares transfer books of the Company Corporation were open, he such holder would have owned upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination or reclassification; provided, however, that in no event shall the consideration to be paid upon the exercise of one Right be less than the aggregate par value of the shares of capital stock of the Corporation issuable upon exercise of one Right. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In the event that:
(A) any Person, shallalone or together with its Affiliates and Associates, at any time after the Rights Dividend Declaration Date, be or shall become an Acquiring Person, unless the event causing such Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an acquisition of shares of Common Stock pursuant to a tender offer or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from one or more investment banking firms, to then proper provision shall be (x) fair to stockholders (taking into account all factors which such members of the Board deem relevant) and (y) otherwise in the best interests of the Company and its stockholders, or
(B) (1) at least a majority of the members of the Board of Directors who are not officers of the Company, after reasonable inquiry and investigation, then, promptly following the first occurrence of any Section 11(a)(ii) Event, made so that each holder of a Right (except as provided below and in Section 7(e) hereof) shall, for a period of sixty (60) days after the later of the occurrence of any such event or the effective date of an appropriate registration statement under the Act pursuant to Section 9 hereof, have a right to receive, upon exercise thereof at a price equal to the then current Purchase Price, in accordance with the terms of this Agreement, such number of Common Shares as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of 1/100th of a Preferred Share for which a Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) 50% of the then current per share market price of the Corporation's Common Shares (determined pursuant to Section 11(d) hereof) on the date of such first occurrence (such number of shares being referred to as the "ADJUSTMENT SHARES"); PROVIDED, HOWEVER, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13 hereof, then only the provisions of Section 13 hereof shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that there shall not be sufficient treasury shares or authorized but unissued (and unreserved) Common Shares to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (ii) and the Rights become so exercisable, notwithstanding any other provision of this Agreement, to the extent necessary and permitted by applicable law, each Right shall thereafter have represent the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of (x) a number of one one-thousandths of a share of Preferred Stock, such (or fractions of) Common Shares (up to the maximum number of shares of Common Stock of the Company as shall equal the result obtained by (xShares which may permissibly be issued) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock for which one Right was exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority of the members of the Company's Board of Directors who are not officers of the Company determine that the following is not permitted by the terms of any agreement or instrument to which the Company is a party on the date of this Agreement (or, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common Stock which are authorized by the Company's articles (or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the Rights in accordance with the foregoing subparagraph (iifractions of) of this Section 11(a), the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise of a Right (the "Current Value") over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company Corporation (or, in the discretion of the Board of Directors, debt) including, without limitationbut not limited to, sharesfractions of a Preferred Share, or units of shares, of preferred stock which the Board of Directors of the Company Corporation has deemed determined to have substantially the same aggregate current market value (determined pursuant to Section 11(d)(i) and (ii) hereof, to the extent applicable) as shares of one Common Stock Share (such shares number of preferred stock (or fractions of) debt, or other equity securities or debt of the Corporation being referred to herein as a "common capital stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Dateequivalent"), equal in the aggregate to the number of Adjustment Shares; PROVIDED, HOWEVER, if sufficient Common Shares, and/or capital stock equivalents are unavailable, then the Company shall be obligated to deliverCorporation shall, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and thenpermitted by applicable law, if necessary, cash, which shares and/or cash have an aggregate value equal take all such action as may be necessary to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient authorize additional shares of Common Stock could be authorized Shares or capital stock equivalents for issuance upon exercise in full of the Rights, including the 30 day period set forth above may be extended to the extent necessarycalling of a meeting of shareholders; and PROVIDED, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, howeverFURTHER, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) or securities convertible into Preferred Stock or equivalent preferred stock at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stock) less than the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 shares of Preferred Stock outstanding on such record date, plus the number of shares of Preferred Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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 shares of Preferred Stock outstanding on such record date, plus the number of additional shares of Preferred Stock and/or equivalent preferred stock 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 by delivery of consideration part or all of which may 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 and shall be binding on the Rights Agent and the holders of the Rights. Shares of Preferred Stock 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 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 a distribution to all holders of Preferred Stock (including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) of evidences of indebtedness, cash (other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than a dividend payable in Preferred Stock, but including any dividend
(i) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in the event that the Current Market Price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on Common Stock payable in shares of Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 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 NYSE or, if the shares of Corporation is unable to cause sufficient Common Stock are not listed or admitted Shares and/or capital stock equivalents to trading on the NYSE, as reported in the principal consolidated transaction reporting system with respect to securities listed on the principal national securities exchange on which the shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Automated Quotation System ("NASDAQ") or such other system then in use, or, if on any such date, the shares of Common Stock are not quoted by any suchbe
Appears in 1 contract
Samples: Stockholder Rights Plan (Applied Microsystems Corp /Wa/)
Adjustment of Purchase Price. NUMBER AND KIND OF SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares or other securities covered by each Right and the number of Rights outstanding are subject to adjustment from time to time as provided in this Section 11.
(i) In the event If the Company shall at any time after the date of this Agreement (A) declare and pay a dividend on the Preferred Stock shares which are subject to the Rights ("Subject Shares") payable in shares of Preferred Stockstock of the Company, (B) subdivide or split the outstanding Preferred StockSubject Shares, (C) combine or consolidate the outstanding Preferred Stock Subject Shares into a smaller number of shares, shares or effect a reverse stock split of the Subject Shares or (D) issue any shares of its capital stock in a reclassification of the Preferred Stock Subject Shares (including any such reclassification in connection with a consolidation or merger in which the Company is the continuing or surviving corporation), then, and in each such event, except as otherwise provided in this Section 11(a) and Section 7(e) hereof), the Purchase Price in effect at the time of the record date for such dividend or of the effective date of such sub-divisionsubdivision, combination split, reverse split, combination, consolidation or reclassification, and the number and kind of shares of Preferred Stock or other capital stock, as the case may be, 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, upon payment of the Purchase Price then in effect, receive the aggregate number and kind of shares of Preferred Stock or other capital stock, as the case may be, stock which, if such Right had been exercised immediately prior to such date and at a time when the Preferred Stock transfer books of the Company were open, he would have owned received upon such exercise and been entitled to receive by virtue of such dividend, subdivision, combination split, reverse split, combination, consolidation or reclassification. If an event occurs which would require an adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof), 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) hereof).
(ii) In If at any time after the event that:date of this Agreement
(A) any Person, shall, at any time after the Rights Dividend Declaration Date, be or become an Acquiring Person, unless or any Associate or Affiliate of any Acquiring Person, directly or indirectly (1) shall merge into the event causing Company or any of its Subsidiaries or otherwise combine with the Company or any of its Subsidiaries and the Company or such Subsidiary shall be the continuing or surviving corporation of such merger or combination and the Common Stock shall remain outstanding and the outstanding shares thereof shall not be changed into or exchanged for stock or other securities of the Company or of any other Person to have become an Acquiring Person is a transaction set forth in Section 13(a) hereofor cash or any other property, or is an acquisition of shares of Common Stock pursuant to a tender offer (2) shall sell or an exchange offer for all outstanding shares of Common Stock at a price and on terms determined by at least a majority of the members of the Board of Directors who are not officers of the Company, after receiving advice from otherwise transfer in one or more investment banking firmstransactions, assets to be (x) fair to stockholders (taking into account all factors which such members the Company or any of its Subsidiaries in exchange for 15 percent or more of the Board deem relevant) and (y) otherwise in the best interests shares of any class of capital stock of the Company or any of its Subsidiaries, and its stockholdersthe Common Stock shall remain outstanding and unchanged, or
(B) directly or indirectly, any Acquiring Person, or any Associate or Affiliate of any Acquiring Person, shall (1) at least a majority in one or more transactions, transfer any assets to the Company or any of its Subsidiaries in exchange (in whole or in part) for shares of any class of capital stock of the members Company or any of its Subsidiaries or for securities exercisable for or convertible into shares of any class of capital stock of the Board Company or any of Directors who are not officers its Subsidiaries or otherwise obtain from the Company or any of its Subsidiaries, with or without consideration, any additional shares of any class of capital stock of the Company or any of its Subsidiaries or other securities exercisable for or convertible into shares of any class of capital stock of the Company or any of its Subsidiaries (other than as part of a pro rata distribution by the Company or such Subsidiary to all holders of Common Stock), (2) sell, purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose (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, (3) receive any compensation from the Company or any of the Company's Subsidiaries other than compensation for full-time employment as a regular employee, or fees for serving as director, at rates in accordance with the Company's (or its Subsidiaries') past practices, or (4) receive the benefit, directly or indirectly (except proportionately as a stockholder), of any loans, advances, guarantees, pledges or other financial assistance provided by the Company or any of its Subsidiaries, 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, or
(C) during any 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, after reasonable inquiry and investigationor any merger or consolidation of the Company with any of its Subsidiaries or any other similar transaction or series of transactions involving the Company or any of its Subsidiaries (whether or not with or into or otherwise involving an Acquiring Person or any Affiliate or Associate of such Acquiring Person) which has the effect, directly or indirectly, of increasing by more than one percent 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 owned by any Acquiring Person or any Associate or Affiliate of any Acquiring Person, or
(D) any Person shall become an Acquiring Person otherwise than pursuant to a Qualified Offer, then, promptly following and in each such case, but subject to the first occurrence provisions of any Section 11(a)(ii) Event27, proper provision shall be made so that each holder of a Right (Right, except as provided below and in Section 7(e7(f), shall, on and after the later of (I) hereofthe date of the occurrence of an event described in clause (A), (B), (C) shall thereafter or (D) of this Section 11(a)(ii), or (II) the date of the expiration of the period within which the Rights may be redeemed pursuant to Section 23 (as the same may have been amended as provided in Section 26), have the right to receive, upon exercise thereof at the then current Purchase Price in accordance with the terms of this Agreement, in lieu of a number of one one-thousandths of a share of Preferred StockPrice, such number of shares of Common Stock as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of Units for which a Right is then exercisable and dividing that product by (y) 50 percent of the current market price per share of Common Stock (determined in accordance with Section 11(d)) on the date of the occurrence of the relevant event listed above in clause (A), (B), (C) or (D) of this subparagraph (ii); PROVIDED, HOWEVER, that if the transaction that would otherwise give rise to the foregoing adjustment is also subject to the provisions of Section 13, then only the provisions of Section 13 shall apply and no adjustment shall be made pursuant to this Section 11(a)(ii). The Company shall not consummate any such merger, combination, transfer or transaction referred to in any of such clauses (A), (B) and (C) unless prior thereto there shall be sufficient authorized but unissued Common Stock to permit the exercise in full of the Rights in accordance with the foregoing sentence, unless the Board of Directors has determined to issue Equivalent Stock in accordance with Section 7(a); PROVIDED, HOWEVER, that in no case may the Company consummate any such merger, combination, transfer or transaction if at the time of or immediately after such transaction there are any rights, warrants or other instruments or securities outstanding or agreements in effect which would substantially diminish or otherwise eliminate the benefits intended to be afforded by the Rights. If the Company issues Equivalent Stock upon the exercise of any Rights pursuant to the immediately preceding paragraph, then, upon any such exercise, proper provision shall be made so that the holder of a Right (except as provided in Section 7(f)) shall have the right to receive, upon such exercise at the then current Purchase Price, such number of shares or other units of Equivalent Stock of the Company as shall equal the result obtained by (x) multiplying the then current Purchase Price by the then number of one one-thousandths of a share of Preferred Stock Units for which one a Right was is then exercisable immediately prior to the first occurrence of a Section 11(a)(ii) Event, and dividing that product by (y) dividing that product (which, following such first occurrence, shall thereafter be referred to as the "Purchase Price" for each Right and for all purposes of this Agreement)
(iii) Unless at least a majority 50 percent of the members current market price per share or other unit of the Company's Board of Directors who are not officers Equivalent Stock of the Company determine that (determined on substantially the following same basis as is not permitted prescribed by Section 11(d) with respect to the terms valuation of Common Stock) on the date of occurrence of the relevant event listed above in clause (A), (B), (C) or (D) of this subparagraph (ii). If at any time the Company should be prohibited by law, by any provision of its Certificate of Incorporation, or by any instrument or agreement or instrument to which the Company is a party on the date or by which it is bound, from issuing, or should be unable under its Certificate of this Agreement (orIncorporation to issue, if the Board of Directors so determines, after the date of this Agreement), then in the event that the number of shares of Common sufficient Equivalent Stock which are authorized by the Company's articles or certificate of incorporation but not outstanding or reserved for issuance for purposes other than upon exercise of the Rights are not sufficient to permit the exercise in full of the all outstanding Rights in accordance with the foregoing subparagraph (ii) sentence, then, in lieu of this Section 11(a)issuing such Equivalent Stock upon such exercise, the Company shall: (A) determine the excess of (1) the value of the Adjustment Shares issuable upon the exercise shall pay to each holder of a Right (the "Current Value"except as provided in Section 7(f)) over (2) the Purchase Price (such excess being referred to herein as the "Spread"), and (B) with respect to each Right, make adequate provision to substitute for the Adjustment Shares, upon payment surrender of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or other equity securities of the Company (including, Right as provided herein but without limitation, shares, or units of shares, of preferred stock which the Board of Directors of the Company has deemed to have substantially the same value as shares of Common Stock (such shares of preferred stock being referred to herein as "common stock equivalents")), (4) debt securities of the Company, (5) other assets, or (6) any combination of the foregoing having an aggregate value equal to the Current Value, where such aggregate value has been determined by the Board of Directors of the Company based upon the advice of a nationally recognized investment banking firm selected by the Board of Directors of the Company; provided, however, if the Company shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days following the later of (x) the first occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's right of redemption pursuant to Section 23(a) expires (the later of (x) and (y) being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon the surrender for exercise of a Right and without requiring payment of the Purchase Price, shares of Common Stock (to the extent available) and then, if necessary, cash, which shares and/or an amount in cash have an aggregate value for each Right equal to the Spread. If the Board of Directors of the Company shall determine in good faith that it is likely that sufficient additional shares of Common Stock could be authorized for issuance upon exercise in full of the Rights, the 30 day period set forth above may be extended to the extent necessary, but not more than 90 days after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval for the authorization of such additional shares (such period, as it may be extended, the "Substitution Period"); provided, however, that there shall be no obligation on the part of the Company so to seek authorization of such additional shares. To the extent that the Company determines that some action need be (and may be) taken pursuant to the first and/or second sentences of this Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof, that such action shall apply uniformly to all outstanding Rights, and (y) may suspend the exercisability of the Rights until the expiration of the Substitution Period in order to seek any authorization of additional shares and/or to decide the appropriate form of distribution to be made pursuant to such first sentence and to determine the value thereof. In the event of any such suspension, the Company shall issue a public announcement stating that the exercisability of the Rights has been temporarily suspended, as well as a public announcement at such time as the suspension is no longer in effect. For purposes of this Section 11(a)(iii), the value of a share of Common Stock shall be the Current Market Price (as determined pursuant to Section 11(d) hereof) per share of the Common Stock on the Section 11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be deemed to have the same value as the Common Stock on such datePurchase Price.
(b) In case the Company shall at any time after the Rights Record Date fix a record date for the issuance of rights, options rights or warrants to all holders of Preferred Common Stock or Subject Shares entitling them to subscribe for or purchase (for a period expiring within 45 calendar days after such record date) Preferred to subscribe for or purchase Common Stock (or shares having the same rights, privileges and preferences as the shares of Preferred Stock ("equivalent preferred stock")) Subject Shares or securities convertible into Preferred Common Stock or equivalent preferred stock Subject Shares at a price per share of Preferred Stock or per share of equivalent preferred stock (or having a conversion price per share, if a security convertible into Preferred Stock or equivalent preferred stockCommon Stock) less than the Current Market Price current market price per share (as determined pursuant to in accordance with Section 11(d)) hereof) per share of Preferred Stock 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, of which the numerator of which shall be the total number of shares of Preferred Common Stock and Subject Shares outstanding on such record date, date plus the number of shares of Preferred Common Stock which the aggregate offering price of the total number of shares of Preferred Stock and/or equivalent preferred stock 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, current market price and of which the denominator of which shall be the total number of shares of Preferred Common Stock and Subject Shares outstanding on such record date, date plus the number of additional shares of Preferred Stock and/or equivalent preferred stock to be offered for subscription or purchase (or into which the convertible securities so to be offered are initially convertible). In case such subscription or purchase price may be paid by delivery of consideration part paid, in whole or all of which may be in part, 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 and shall be binding on the Rights Agent and the holders of the RightsAgent. Shares of Preferred Stock 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 if such rights 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 at any time after the Rights Record Date fix a record date for the making of a distribution to all holders on the shares of Preferred Common Stock or the Subject Shares, whether by way of a dividend, distribution, reclassification of stock, recapitalization, reorganization or partial liquidation of the Company or otherwise (and including any such distribution made in connection with a consolidation or merger in which the Company is the continuing corporation) ), of subscription rights or warrants (excluding those referred to in Section 11(b)), evidences of indebtedness, cash (indebtedness or other than a regular quarterly cash dividend out of the earnings or retained earnings of the Company), assets (other than (i) regular periodic cash dividends, (ii) a dividend payable in Preferred Common Stock or (iii) a distribution which is part of or is made in connection with a transaction to which Section 11(a)(ii) or Section 13 applies), 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, of which the numerator shall be the current market price per share of Common Stock (determined in accordance with Section 11(d)) on such record date, less the fair market value applicable to one share of Common Stock (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 such assets or evidences of indebtedness or of such subscription rights or warrants so to be distributed, and of which the denominator shall be such current market price per share of Common Stock. Such adjustments shall be made successively whenever such a record date is fixed; and if such distribution is not so made, but including any dividendthe 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.
(id) For the purpose of any computation hereunder, other than computations made pursuant to Section 11(a)(iii) hereof, the "Current Market Pricecurrent market price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 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) hereof, the "Current Market Price" per share of Common Stock on any date shall be deemed to be the average of the daily closing prices per share of such Common Stock for the 10 consecutive Trading Days immediately following such date; provided, however, that in if the event that the Current Market Price current market price per share of the Common Stock is determined during a period following the announcement by the issuer of such Common Stock of (A) a dividend or distribution on such Common Stock payable in shares of such Common Stock or securities convertible into shares of Common Stock (other than the Rights), or (B) any subdivision, combination or reclassification of such Common Stock, and prior to the expiration of the requisite 30 Trading Day or 10 Trading Day period, as set forth above, Days after the ex-dividend date for such dividend or distribution, or the record date for such subdivision, combination or reclassification, then, and in each such case, the "Current Market Price" current market price shall be properly appropriately adjusted to take into account reflect the current market price per share of Common Stock in connection with 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 NYSE New York Stock Exchange or, if the shares of Common Stock are not listed or admitted to trading on the NYSENew 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 shares of Common Stock are listed or admitted to trading or, if the shares of Common Stock 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 Dealers, Inc., Automated Quotation System ("NASDAQ") or such other system then in use, or, if ). If on any such date, date the shares of Common Stock are not quoted by any suchsuch organization, the fair market value of such shares on such date as determined in good faith by the Board of Directors of the issuer of such Common Stock shall be used. Any such determination of current market price shall be described in a statement filed with the Rights Agent. For the purpose of any computation hereunder, the "current market price" of a Unit shall be deemed to be equal to the current market price per share of Common Stock, and the "current market price" of a Subject Share shall be deemed to be equal to the current market price per share of Common Stock divided by the number of Subject Shares which comprise a Unit.
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Samples: Rights Agreement (Power One Inc)