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Exhibit 10.14
RIGHTS AGREEMENT
BETWEEN
REYNARD MOTORSPORT, INC.
AND
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JANUARY ___, 1999
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TABLE OF CONTENTS
Page
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1. CERTAIN DEFINITIONS.......................................................................................1
2. APPOINTMENT OF RIGHTS AGENT...............................................................................4
3. ISSUE OF RIGHTS CERTIFICATES..............................................................................5
4. FORM OF RIGHTS CERTIFICATES...............................................................................6
5. COUNTERSIGNATURE AND REGISTRATION.........................................................................7
6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES; MUTILATED, DESTROYED,
LOST OR STOLEN RIGHTS CERTIFICATES........................................................................7
7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS AND EXTENSION...............................8
8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES......................................................10
9. AVAILABILITY OF COMMON STOCK.............................................................................10
10. RECORD HOLDERS OF COMMON STOCK ISSUED UPON EXERCISE OF RIGHTS............................................12
11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OF COMMON STOCK OR NUMBER OF RIGHTS..............12
12. CERTIFICATE OF ADJUSTMENT................................................................................18
13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER.....................................19
14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES..................................................................21
15. RIGHTS OF ACTION.........................................................................................22
16. AGREEMENT OF RIGHT HOLDERS...............................................................................22
17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.......................................................23
18. CONCERNING THE RIGHTS AGENT..............................................................................23
19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT................................................24
20. DUTIES OF RIGHTS AGENT...................................................................................24
21. CHANGE OF RIGHTS AGENT...................................................................................26
22. ISSUANCE OF NEW RIGHTS CERTIFICATES......................................................................27
23. REDEMPTION...............................................................................................28
24. EXCHANGE.................................................................................................29
25. NOTICE OF CERTAIN EVENTS.................................................................................30
26. NOTICES..................................................................................................30
27. SUPPLEMENTS AND AMENDMENTS...............................................................................31
28. SUCCESSORS...............................................................................................32
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29. DETERMINATIONS BY THE BOARD OF DIRECTORS.................................................................32
30. BENEFITS OF THIS RIGHTS AGREEMENT........................................................................33
31. SEVERABILITY.............................................................................................33
32. GOVERNING LAW............................................................................................33
33. COUNTERPARTS.............................................................................................33
34. DESCRIPTIVE HEADINGS.....................................................................................33
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RIGHTS AGREEMENT
This Rights Agreement (the "Rights Agreement"), is effective as of
January ___, 1999, between Reynard Motorsport, Inc., a Delaware corporation (the
"Company"), and ___________________________ (the "Rights Agent").
WITNESSETH:
WHEREAS, on September 28, 1998, the Board of Directors of the Company
(the "Board") authorized and declared a dividend of one common stock purchase
right ("Right") for each share of the Company's common stock outstanding at the
Close of Business (as hereinafter defined) on December 30, 1998 (the "Record
Date"), each such right representing the right to purchase one share of the
Company's common stock upon the terms and subject to the conditions therein set
forth and the Board further authorized and directed the issuance of one common
stock purchase right with respect to each share of the Company's common stock
that becomes outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date or the Final Expiration Date (as
hereinafter defined);
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
1. CERTAIN DEFINITIONS
For purposes of this Rights Agreement, the following terms have the
meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, becomes, at any time
after the date of this Rights Agreement (whether or not such status
continues for any period, except as provided in subclause (Y) of this
paragraph (a)), the Beneficial Owner of Common Stock representing
fifteen percent (15%) or more of the Common Stock then outstanding.
Notwithstanding the foregoing, (A) the term "Acquiring Person" shall
not include (i) the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any Subsidiary of the Company,
or any entity holding Common Stock for or pursuant to the terms of any
such plan (e.g. trustee or plan fiduciary), (ii) any Person, who or
which together with all Affiliates and Associates of such Person
becomes the Beneficial Owner of fifteen percent (15%) or more of the
then outstanding Common Stock as a result of the acquisition of Common
Stock directly from the Company (provided, however, that if, after such
acquisition, such Person, or an Affiliate or Associate of such Person,
becomes the Beneficial Owner of any additional Common Stock in an
acquisition not made directly from the Company, then such Person shall
be deemed an Acquiring Person), or (iii) Xxxxxx X. Xxxxxxx or any of
his Affiliates or Associates, and (B) no Person shall be an "Acquiring
Person" either (X) as a result of the acquisition of Common Stock by
the Company which, by reducing the number of shares of Common Stock
outstanding, increases the proportional number of shares beneficially
owned by such Person together with all Affiliates and Associates of
such Person;
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except that if (i) a Person would become an Acquiring Person (but for
the operation of this subclause (X)) as a result of the acquisition of
Common Stock by the Company, and (ii) after such stock acquisition by
the Company, such Person, or an Affiliate or Associate of such Person,
becomes the Beneficial Owner of any additional Common Stock, then such
Person shall be deemed an Acquiring Person, or (Y) if (i) such Person,
or an Affiliate or Associate of such Person, inadvertently becomes the
Beneficial Owner of fifteen percent (15%) or more of the outstanding
Common Stock, (ii) within eight (8) Business Days thereafter such
Person notifies the Board that such Person did so inadvertently, and
(iii) within two (2) Business Days after such notification, such Person
is the Beneficial Owner of less than fifteen percent (15%) of the
outstanding Common Stock.
(b) "Affiliate" and "Associate" shall have the respective meanings ascribed
to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act.
(c) A Person shall be deemed the "Beneficial Owner" of and shall be deemed
to have acquired "beneficial ownership" of, or to have acquired
beneficial ownership of, or to "beneficially own", any securities:
(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act as of the date hereof;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time or
upon satisfaction of conditions) pursuant to any agreement,
arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights
(other than these Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to have acquired beneficial ownership
of, or to beneficially own, securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person
or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange; or
(B) the right to vote pursuant to any agreement, arrangement
or understanding; provided, however, that a Person shall not
be deemed the Beneficial Owner of, or to have acquired
beneficial ownership of, or to beneficially own, any security
if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent
given to such Person in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable rules and regulations promulgated under the
Exchange Act and (2) is not also then reportable on Schedule
13D or 13G under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with
which such Person or any Affiliate or Associate of such Person
has any agreement, arrangement or understanding (other than
customary agreements with and between underwriters and selling
group members with respect to
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a bona fide public offering of securities) for the acquiring,
holding, voting (except to the extent contemplated by the
proviso to Section 1(c)(ii)(B)) or disposing of any securities
of the Company.
Notwithstanding anything in this definition of "Beneficial Owner" to
the contrary, the phrase "then outstanding", when used with reference
to a Person's beneficial ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding together
with the number of such securities not then actually issued and
outstanding which such Person would be deemed to own beneficially
hereunder.
(d) "Business Day" shall mean any day other than a Saturday, a Sunday, or a
day on which banking institutions in Indiana are authorized or
obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M.,
Indianapolis, Indiana time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., Indianapolis,
Indiana time, on the next succeeding Business Day.
(f) "Common Stock" when used with reference to the Company shall mean
shares of the Company's common stock, par value .01 cents per share,
and any other class or classes or series of common stock of the Company
resulting from any subdivision, combination, recapitalization or
reclassification of shares of such Common Stock. "Common Stock" when
used with reference to any Person other than the Company shall mean the
capital stock (or voting equity interest or, in certain circumstances,
cash, property or other interests) with the greatest voting power of
such other Person or, if such other Person is a Subsidiary of another
Person, the Person or Persons which ultimately control such first
mentioned Person.
(g) "Company" shall have the meaning set forth in the recitals to this
Rights Agreement.
(h) "Distribution Date" shall have the meaning set forth in Section 3(a)
hereof.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(j) "Exchange Ratio" shall have the meaning set forth in Section 24 hereof.
(k) "Final Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(l) "Person" shall mean any individual, firm, partnership, corporation,
limited liability company, trust, association, joint venture or other
entity, and shall include any successor (by merger or otherwise) of
such entity.
(m) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(n) "Purchase Price" shall have the meaning set forth in Section 7(a)
hereof.
(o) "Record Date" shall have the meaning set forth in the recitals to this
Rights Agreement.
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(p) "Redemption Date" shall have the meaning set forth in Section 7(a)
hereof.
(q) "Redemption Price" shall have the meaning set forth in Section 23
hereof.
(r) "Rights Agent" shall have the meaning set forth in the recitals to this
Rights Agreement.
(s) "Rights Agreement" shall have the meaning set forth in the recitals to
this Rights Agreement.
(t) "Rights Certificates" shall have the meaning set forth in Section 3(a)
hereof.
(u) "Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii) hereof.
(v) "Section 13 Event" shall mean any event described in clauses (x), (y)
or (z) of Section 13(a) hereof.
(w) "Securities Act" shall mean the Securities Act of 1933, as amended.
(x) "Stock Acquisition Date" shall mean the first date of a public
announcement (which, for purposes of this definition, shall include,
without limitation, the filing of a report pursuant to Section 13(d) of
the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such; provided, that, if such Person is
determined not to have become an Acquiring Person pursuant to Section
1(a) hereof, then no Stock Acquisition Date shall be deemed to have
occurred.
(y) "Subsidiary" of any Person shall mean any corporation or other entity
of which a majority of the voting power of the voting equity securities
or equity interest is beneficially owned, directly or indirectly, or
otherwise controlled by such Person.
(z) "Summary of Rights" shall have the meaning set forth in Section 3(b)
hereof.
(aa) "Trading Day" shall have the meaning set forth in Section 11(d) hereof.
(bb) "Triggering Event" shall mean a Section 11(a)(ii) Event or a Section 13
Event.
(cc) "Voting Securities" shall have the meaning set forth in Section 13(a)
hereof.
2. APPOINTMENT OF RIGHTS AGENT
The Company hereby appoints the Rights Agent to act as agent for the
Company and the holders of the Rights (who, in accordance with Section 3 hereof,
shall prior to the Distribution Date, also be the holders of the Common Stock)
in accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable.
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3. ISSUE OF RIGHTS CERTIFICATES
(a) Until the earlier of (i) the Close of Business on the tenth (10th)
Business Day after the Stock Acquisition Date, or (ii) the Close of
Business on the tenth (10th) Business Day (or such later date as may be
determined by action of the Board prior to such time as any Person
becomes an Acquiring Person) after the date that a tender or exchange
offer by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary
of the Company or any entity holding Common Stock for or pursuant to
the terms of any such plan) is first published or sent or given within
the meaning of Rule 14d-2 of the General Rules and Regulations under
the Exchange Act or of the first public announcement of the intention
of any Person (other than the Company, any subsidiary of the Company,
any employee benefit plan of the Company, or any Subsidiary of the
Company or any entity holding Common Stock for or pursuant to the terms
of any such plan) to commence (which intention to continue remains in
effect for five Business Days after such announcement) a tender or
exchange offer, if upon consummation thereof, such Person would become
the Beneficial Owner of fifteen percent (15%) or more of the Common
Stock then outstanding (the earlier of such dates being herein referred
to as the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of Section 3(b) hereof) by the certificates
for the Common Stock registered in the names of the holders thereof
(which certificates shall also be deemed to be certificates for Rights)
and not by separate certificates, and (y) the Rights (and the right to
receive separate certificates evidencing the rights ("Rights
Certificates")) will be transferable only in connection with the
transfer of the underlying Common Stock (including a transfer to the
Company) as more fully set out below. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights
Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested, send) by first-class, postage
prepaid mail, to each record holder of Common Stock as of the Close of
Business on the Distribution Date, at the address of such holder shown
on the records of the Company, a Rights Certificate, which shall be in
substantially the form of Exhibit A hereto, evidencing one Right for
each share of Common Stock so held, subject to amendment as provided
herein. As of and after the Distribution Date, the Rights will be
evidenced solely by such Rights Certificates.
(b) As promptly as practicable following the Record Date, the Company will
send a copy of a Summary of Rights to Purchase Common Stock, in
substantially the form of Exhibit B hereto (the "Summary of Rights"),
by first-class, postage prepaid mail, to each record holder of Common
Stock as of the Close of Business on the Record Date, at the address of
such holder shown on the records of the Company. Until the Distribution
Date (or the earlier of the Redemption Date or the Final Expiration
Date), the surrender for transfer of any certificate for Common Stock
outstanding, with or without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated
with the Common Stock represented thereby.
(c) Certificates for Common Stock which become outstanding (including,
without limitation, re-acquired Common Stock which is subsequently
disposed of by the Company) after the Record Date but prior to the
earliest of the Distribution Date, the Redemption Date or the Xxxxx
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Expiration Date, shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
"This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Rights Agreement, as it may from
time to time be supplemented or amended, between Reynard
Motorsport, Inc. and _____________________________ (the "Rights
Agreement"), the terms of which are hereby incorporated herein by
reference and a copy of which is on file at the principal
executive offices of Reynard Motorsport, Inc. Under certain
circumstances, as set forth in the Rights Agreement, such rights
may be redeemed or exchanged, may expire, or may be evidenced by
separate certificates and no longer be evidenced by this
certificate. Reynard Motorsport, Inc. will mail to the holder of
this certificate a copy of the Rights Agreement without charge
within five days after receipt of a written request therefor.
Under certain circumstances, rights issued to or held by Acquiring
Persons or any Affiliates or Associates thereof (as such terms are
defined in the Rights Agreement) and any subsequent holder of such
Rights may become null and void."
With respect to such certificates (whether or not the certificates
contained the foregoing legend), until the earlier of the Distribution Date, the
Redemption Date, or the Final Expiration Date, the Rights associated with the
Common Stock represented by such certificates shall be evidenced by such
certificates alone, and the surrender for transfer of any such certificate shall
also constitute the transfer of the Rights associated therewith. In the event
that the Company purchases or acquires any Common Stock after the Record Date,
but prior to the earlier of the Distribution Date, the Redemption Date or the
Final Expiration Date, any Rights associated with such Common Stock shall be
deemed canceled and retired so that the Company shall not be entitled to
exercise any Rights associated with the Common Stock which is no longer
outstanding.
4. FORM OF RIGHTS CERTIFICATES
(a) The Rights Certificates (and the forms of election to purchase and of
assignment to be printed on the reverse thereof) shall be substantially
the same as provided for in Section 3(a) hereof and may have such marks
of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and as
are not inconsistent with the provisions of this Rights Agreement, or
as may be required to comply with any applicable law or with any rule
or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Rights may from time to time be listed,
or to conform to usage. Subject to the provisions of Sections 11 and 22
hereof, the Rights Certificates, whenever issued, shall entitle the
holders thereof to purchase such number and kind of shares of Common
Stock as shall be set forth therein at the price per share set forth
therein, but the number and kind of such shares of Common Stock and the
price per share shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Sections 3(a), 11(i), or 22
hereof that represents Rights which are null and void pursuant to
Section 7(f) of this Rights Agreement, and any Rights Certificate
issued pursuant to Sections 6, 11 or 22 hereof upon transfer, exchange,
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replacement or adjustment of any other Rights Certificate referred to
in this sentence, shall contain (to the extent feasible) the following
legend:
"The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement). Accordingly, this
Rights Certificate and the Rights represented hereby are null and
void."
Notwithstanding the above provision, failure to place such legend on
any Rights Certificate representing Rights which are otherwise null and void
pursuant to the terms of this Rights Agreement shall not affect the null and
void status of such Rights.
5. COUNTERSIGNATURE AND REGISTRATION
(a) The Rights Certificates shall be executed on behalf of the Company by
its Chairman of the Board, its Chief Executive Officer, its President,
any of its Vice Presidents, or its Treasurer, either manually or by
facsimile signature, and shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless
countersigned. In case any officer of the Company who shall have signed
any of the Rights Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, may be countersigned
by the Rights Agent and issued and delivered by the Company with the
same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any
Rights Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Rights Certificate,
shall be a proper officer of the Company to sign such Rights
Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its principal office or offices designated as the
appropriate place for surrender of such Rights Certificate or transfer,
books for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the date
of each of the Rights Certificates.
6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES
(a) Subject to the provisions of Sections 4(b), 7(f) and 14 hereof, at any
time after the Close of Business on the Distribution Date, and at or
prior to the Close of Business on the earlier of the Redemption Date or
the Final Expiration Date, any Rights Certificate or Rights
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Certificates (other than Rights Certificates representing Rights that
have been exchanged pursuant to Section 24 hereof) may be transferred,
split up, combined or exchanged for another Rights Certificate or
Rights Certificates, respectively, entitling the registered holder to
purchase a like number and kind of shares of Common Stock as the Rights
Certificate or Rights Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split
up, combine or exchange any Rights Certificate or Rights Certificates
shall make such request in writing delivered to the Rights Agent, and
shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged at the principal office or
offices of the Rights Agent designated for such purpose. Neither the
Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side
of such Rights Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial
Owner) or Affiliates or Associates thereof as the Company shall
reasonably request. Thereupon, the Rights Agent shall, subject to
Sections 4(b), 7(f) and 14 hereof, countersign and deliver to the
Person entitled thereto a Rights Certificate or Rights Certificates, as
the case may be, as so requested. The Company may require payment of a
sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a
Rights Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the
Company's request, reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if mutilated,
the Company will make and deliver a new Rights Certificate of like
tenor to the Rights Agent for delivery to the registered holder in lieu
of the Rights Certificate so lost, stolen, destroyed or mutilated.
7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE OF RIGHTS AND
EXTENSION
(a) Subject to Section 7(f) hereof, the registered holder of any Rights
Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein) in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the
form of election to purchase on the reverse side thereof duly executed,
to the Rights Agent at the principal office or offices of the Rights
Agent designated for such purpose, together with payment of the price
per share (rounded to the nearest cent) provided for in paragraph (c)
below (the "Purchase Price") for each Common Share as to which the
Rights are exercised, at or prior to the earliest of (i) the Close of
Business on December 30, 2008 (the "Final Expiration Date"), (ii) the
time at which the Rights are redeemed as provided in Section 23 hereof
(the "Redemption Date"), or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
(b) So long as the Rights have not been redeemed pursuant to Section 23
hereof, the Company may, in its sole discretion, determine to extend
the Rights for successive periods not to exceed ten years in duration,
by giving notice of such extension to the Rights
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Agent, such notice to be given at least 10 and not more than 30 days
before the Final Expiration Date.
(c) The Purchase Price for each share of Common Stock pursuant to the
exercise of a Right shall initially be $60, subject to adjustment from
time to time as provided in Sections 11 and 13(a) hereof, and shall be
payable in lawful money of the United States of America in accordance
with paragraph (d) below.
(d) Upon receipt of a Rights Certificate representing exercisable Rights,
with the form of election to purchase duly executed, accompanied by
payment of the Purchase Price for the Common Stock (or, following a
Triggering Event, other securities, cash or other assets as the case
may be) to be purchased and an amount equal to any applicable transfer
tax required to be paid by the holder of such Rights Certificate in
accordance with Section 9(e) hereof by certified check, cashier's check
or money order payable to the order of the Company, the Rights Agent
shall, subject to Section 20(k) hereof, thereupon promptly (i)
requisition from any transfer agent of the Common Stock certificates
for the number and kind of shares of Common Stock to be purchased (or
depository receipts when appropriate) and the Company hereby
irrevocably authorizes its transfer agents to comply with all such
requests, (ii) when appropriate, requisition from the Company the
amount of cash to be paid in lieu of issuance of fractional shares in
accordance with Section 14 hereof, (iii) after receipt of such
certificates, cause the same to be delivered to or upon the order of
the registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder and (iv) when
appropriate, after receipt, deliver such cash to or upon the order of
the registered holder of such Rights Certificate. In the event that the
Company is obligated to issue other securities of the Company, pay cash
and/or distribute other property pursuant to Section 11(a)(iii) hereof,
the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution
by the Rights Agent, if and when appropriate. The Company reserves the
right to require, prior to the occurrence of a Triggering Event, that
upon any exercise of Rights, a number of Rights be exercised so that
only whole shares of Common Stock would be issued.
(e) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate
evidencing Rights remaining unexercised shall be issued by the Rights
Agent to the registered holder of such Rights Certificate or to his
duly authorized assigns, subject to the provisions of Section 14
hereof.
(f) Notwithstanding anything to the contrary in this Rights Agreement, from
and after the first occurrence of a Section 11(a)(ii) Event, any Rights
beneficially owned by (i) any Acquiring Person (or any Associate or
Affiliate of an Acquiring Person), (ii) a transferee of an Acquiring
Person (or any Associate or Affiliate of an Acquiring Person) which
becomes a transferee after the Acquiring Person becomes such, or (iii)
a transferee of an Acquiring Person (or any Associate or Affiliate of
an acquiring Person) who becomes a transferee prior to or concurrently
with the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person (or any Associate or Affiliate of such
Acquiring Person) to holders of equity interests in such Acquiring
Person (or of any such Associate or Affiliate) or to any Person with
whom the Acquiring
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Person has any 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 which has as a primary
purpose or effect the avoidance of this Section 7(f), shall be null and
void without any further action, and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether under
any provision of this Rights Agreement or otherwise. The Company shall
use all reasonable efforts to ensure that the provisions of this
Section 7(f) and Section 4(b) hereof are complied with, but shall have
no liability to any holder of Rights or any other Person as a result of
its failure to make any determination under this Section 7(f) or under
such Section 4(b) with respect to any Acquiring Person or an Associate
or Affiliate of an Acquiring Person or their transferees.
(g) Notwithstanding anything in this Rights Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the
occurrence of any purported transfer or exercise unless such registered
holder shall have (i) completed and signed the certificate following
the form of assignment or election to purchase set forth on the reverse
side of the Rights Certificate surrendered for such assignment or
exercise, and (ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner of the Rights
requested by such Rights Certificate) or Affiliates or Associates
thereof as the Company shall reasonably request.
8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES
All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or to any of its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be canceled by it,
and no Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Rights Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the Company, or shall,
at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
9. AVAILABILITY OF COMMON STOCK
(a) Subject to the Company's rights under Section 11(a)(iii) hereof to
otherwise fulfill its obligations hereunder, the Company shall cause to
be reserved and kept available, out of its authorized and unissued
Common Stock or any Common Stock held in its treasury, the number and
kind of shares of Common Stock that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with this
Rights Agreement; provided, however, that such action need not be taken
with respect to Common Stock (or other securities) issuable upon
exercise of Rights until the occurrence of a Triggering Event.
(b) So long as the Common Stock issuable upon the exercise of Rights may be
listed on any national securities exchange or automated quotation
system, the Company shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all shares
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of Common Stock reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise; provided,
however, that the Company shall have no obligation hereunder to list
the Common Stock on any national securities exchange.
(c) The Company shall take all such action as may be necessary to ensure
that all shares of Common Stock delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such shares
(subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares of Common
Stock.
(d) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a
Triggering Event in which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance
with Sections 11(a)(ii) (or Sections 11(a)(iii) or 13 hereof), or as
soon as is required by law following the Distribution Date, as the case
may be, a registration statement under the Securities Act, with respect
to the Common Stock or other securities purchasable upon exercise of
the Rights on an appropriate form, (ii) cause such registration
statement to become effective as soon as practicable after such filing,
and (iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities , or (B) the Final Expiration Date. The
Company will also take such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the
various states and other appropriate jurisdictions in connection with
the exercisability of the Rights. The Company may temporarily suspend,
for a period of time not to exceed ninety (90) days after the date set
forth in clause (i) of the first sentence of this paragraph, the
exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective and to take
such actions under such other securities or blue sky laws and permit
them to become effective. Upon 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
any provision of this Agreement to the contrary, the Rights shall not
be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained or the exercise thereof
shall not be permitted under applicable law or a registration statement
shall not have been declared effective.
(e) The Company shall pay, when due and payable, any and all federal and
state transfer taxes and charges which may be payable in respect of the
issuance or delivery of the Rights Certificates or of any Common Stock
upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Rights Certificates to a Person other than, or
the issuance or delivery of certificates or depository receipts for the
Common Stock in a name other than that of, the registered holder of the
Rights Certificate evidencing Rights surrendered for exercise or to
issue or to deliver any certificates for Common Stock upon the exercise
of any Rights until any such tax shall have been paid (any such tax
being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's reasonable
satisfaction that no such tax is due.
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10. RECORD HOLDERS OF COMMON STOCK ISSUED UPON EXERCISE OF RIGHTS
Each person in whose name any certificate for Common Stock is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Common Stock represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Company's transfer
books for the Common Stock are closed, such Person shall be deemed to have
become the record holder of such securities on, and such certificate shall be
dated, the next succeeding Business Day on which such transfer books are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Rights
Certificate shall not be entitled to any rights of a holder of securities for
which the Rights evidenced thereby shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
11. ADJUSTMENT OF 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 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.
(a) (i) In the event the Company shall at any time after the Record Date
(A) declare a dividend on the Common Stock payable in shares of Common
Stock, (B) subdivide the outstanding Common Stock into a greater number
of such shares, (C) combine the outstanding shares of Common Stock into
a smaller number of such shares, or (D) issue any shares of its capital
stock in a reclassification of 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) or Section 7(f) 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 subdivision, combination
or reclassification, and the number and kind of shares of capital stock
issuable on such date, upon exercise of the Right shall be
proportionately adjusted so that the holder of any Right exercised
after such time shall, upon payment of the Purchase Price then in
effect, be entitled to receive the aggregate number and kind of shares
of capital stock which, if such Right had been exercised immediately
prior to such date and at a time when the Common Stock transfer books
of the Company were open, such holder would have owned upon such
exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that
in no event shall the consideration to be paid upon the exercise of one
(1) such Right be less than the per share par value of the shares of
capital stock issuable upon exercise of such Right. If an event occurs
which would require an adjustment under both Section 11(a)(i) and
Section 11(a)(ii),
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the adjustment provided for in this Section 11(a)(i) shall be in
addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii).
(ii) Subject to Section 24 of this Rights Agreement, in the event any Person
becomes an Acquiring Person at any time after the Record Date, then the
Purchase Price for each share of Common Stock issuable upon exercise of
Rights shall be reduced to an amount equal to fifty percent (50%) of
the current market price per share of such Common Stock (determined
pursuant to Section 11(d)) on the Stock 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).
(iii) In the event that the number of shares of Common Stock authorized by
the Company's Certificate of Incorporation but not outstanding or
reserved for issuance shall not be sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii),
the Company shall, to the extent permitted by applicable law, take all
such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exercise of the Rights, including the
calling of a meeting of stockholders; 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 Common Stock and requiring
payment therefor, (B) issue equity securities having a value equal to
the market price of the shares of Common Stock which otherwise would
have been issuable pursuant to the foregoing subparagraph (ii), which
value shall be determined by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be
binding upon the Rights Agent and the holders of Rights, or (C)
distribute a combination of Common Stock, cash and/or other equity
securities having a value equal to the market price of the shares of
the Common Stock which are otherwise issuable pursuant to the foregoing
subparagraph (ii), determined in accordance with the preceding clause
(B), upon exercise of the related Rights.
(b) In case the Company shall fix a record date for the issuance of rights
(other than the Rights), options or warrants to all holders of shares
of Common Stock entitling them (for a period expiring within forty-five
(45) calendar days after such record date) to subscribe for or purchase
Common Stock, or securities convertible into Common Stock, at a price
per share (or having a conversion price per share, if a security
convertible into Common Stock) less than the then current per share
market price (as defined in Section 11(d)) of the shares of 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 Common Stock
outstanding on such record date plus the number of shares of Common
Stock which the aggregate offering price of the total number of shares
so to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current
market price, and the denominator of which shall be the number of
shares of Common Stock outstanding on such record date plus the number
of additional shares of Common Stock to be
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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 (1) Right be less than the per share par value of the
shares of capital stock of the Company issuable upon exercise of one
(1) Right. In case such subscription price may be paid in 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,
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 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, 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 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 or assets (other than a regular quarterly cash dividend
payable out of net profits or surplus of the Company, a dividend
payable in 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 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 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 and shall be binding on the Rights Agent and the holders of
Rights) of the portion of such cash, assets or evidences of
indebtedness so to be distributed or of such subscription rights or
warrants applicable to one (1) share of Common Stock and the
denominator of which shall be such current per share market price of
the Common Stock; provided, however, that in no event shall the
consideration to be paid upon the exercise of one (1) 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 (1) Right. Such adjustments
shall be made successively whenever such a record date is fixed; and in
the event that such distribution is not so made, the Purchase Price
shall again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the "current per share
market price" of a share of Common Stock on any date shall be deemed to
be the average of the daily closing prices per share of Common Stock
for the thirty (30) consecutive Trading Days immediately prior to such
date; provided, however, that in the event that the current per share
market price of a share of Common Stock is determined during a period
following the announcement by the Company of (i) a dividend or
distribution on the Common Stock, payable in shares of Common Stock or
securities convertible into Common Stock, or (ii) any subdivision,
combination or reclassification of the Common Stock, and prior to the
expiration of thirty (30) Trading Days after the ex-dividend date for
such dividend or distribution, or the record date for such subdivision,
combination or reclassification, then, and in each such case, the
current per share
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market price shall be appropriately adjusted to reflect the current per
share market price of one (1) share of Common Stock. The closing price
for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the New York Stock Exchange or, if the
Common Stock is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Common Stock is listed or
admitted to trading or, if the Common Stock 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 Nasdaq Stock Market
or other such system then in use, or, if on any such date the Common
Stock is not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market
maker making a market in the 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 the Common Stock on such date as determined in good
faith by the Board shall be used, 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 Rights. The term
"Trading Day" shall mean a day on which the principal national
securities exchange on which the Common Stock is listed or admitted to
trading is open for the transaction of business or, if the Common Stock
is not listed or admitted to trading on any national securities
exchange, a Business Day. If the Common Stock is not publicly held or
so listed or traded, "current per share market price" shall mean the
fair value per share as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights
Agent and shall be binding upon the Rights Agent and the holders of
Rights.
(e) Anything herein to the contrary notwithstanding, no adjustment in the
Purchase Price shall be required unless such adjustment would require
an increase or decrease of at least one percent (1%) in the Purchase
Price; provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the nearest one
one-thousandth of a share as the case may be. Notwithstanding the first
sentence of this Section 11(e), any adjustment required by this Section
11 shall be made no later than the earlier of (i) three years from the
date of the transaction which requires such adjustment, or (ii) the
Final Expiration Date.
(f) If as a result of an adjustment made pursuant to Sections 11(a) or
13(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other
than Common Stock, thereafter the number of such other shares so
receivable upon exercise of any Right and the Purchase Price thereof
shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with
respect to the Common Stock contained in Xxxxxxx 00(x), (x), (x), (x),
(x), (x), (x), (x), (x) and (m) hereof, inclusive, and the provisions
of Sections 7, 9, 10, 13 and 14 with respect to the Common Stock shall
apply on like terms to any such other shares; provided, however, that
the Company shall not be liable for its inability to reserve and keep
available for issuance upon exercise of the Rights pursuant to Section
11(a)(ii) hereof a number of shares of
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Common Stock greater than the number then authorized by the Certificate
of Incorporation of the Company but not outstanding or reserved for
other purposes.
(g) All Rights originally issued by the Company subsequent to any
adjustment made hereunder to the Purchase Price applicable thereto
shall evidence the right to purchase, at the adjusted Purchase Price,
the number of shares of Common Stock (or other capital stock or cash or
combination thereof) purchasable from time to time hereunder upon
exercise of such Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result
of the calculations made in Sections 11(b) and (c), each related Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase
Price, the number of shares of Common Stock (calculated to the nearest
one one-thousandth of a share) obtained by (i) multiplying (x) the
number of shares covered by such Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to
such Purchase Price adjustment and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such
Purchase Price adjustment.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights in substitution for any
adjustment in the number of shares of Common Stock purchasable upon the
exercise of a Right. Each of such Rights outstanding after such
adjustment of the number of such Rights shall be exercisable for the
number of shares of Common Stock for which such Right was exercisable
immediately prior to such adjustment. Each such Right held of record
prior to such adjustment of the number of Rights shall become that
number of such Rights (calculated to the nearest one ten-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of such Purchase Price by the Purchase Price in effect
immediately after such adjustment. The Company shall make a public
announcement of its election to adjust the number of Rights indicating
the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if
the Rights Certificates have been issued, shall be at least ten (10)
days later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number of
such Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record
of such Rights Certificates on such record date additional Rights,
subject to Section 14 hereof, to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall
cause to be distributed to such holders of record in substitution and
replacement for such Rights Certificates held by such holders prior to
the date of adjustment, and upon surrender thereof, if required by the
Company, new Rights Certificates evidencing all the Rights to which
such holders shall be entitled after such adjustment. Rights
Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be registered
in the names of the holders of record of Rights Certificates on the
record date specified in the public announcement.
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(j) Irrespective of any adjustment or change in the Purchase Price or the
number of shares of Common Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price and the number of shares of
Common Stock which were expressed in such Rights Certificates
theretofore issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the
Purchase Price below the then par value, if any, of the Common 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 Common Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment
in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of
such event the issuing to the holder of any related Right exercised
after such record date the number of shares of Common Stock and other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of shares of Common Stock and other
capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such
holder a due xxxx or other appropriate instrument evidencing such
holder's right to receive such additional shares upon the occurrence of
the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price
in addition to those adjustments expressly required by this Section 11,
as and to the extent that it in its sole discretion shall determine to
be advisable in order that (i) any consolidation or subdivision of the
Common Stock, (ii) issuance wholly for cash of any Common Stock at less
than the current market price, (iii) issuance wholly for cash of Common
Stock or securities which by their terms are convertible into or
exchangeable for Common Stock, (iv) dividends on Common Stock payable
in shares of Common Stock or (v) issuance of rights, options or
warrants referred to hereinabove in Section 11(b), hereafter made by
the Company to holders of Common Stock, shall not be taxable to such
stockholders.
(n) The Company shall not, after the Distribution Date, except as permitted
by Sections 23 or 27 hereof, take (or permit any Subsidiary to take)
any action the purpose of which is to, or if at the time such action is
taken it is reasonably foreseeable that the effect of such action is
to, materially diminish or otherwise eliminate the benefits intended to
be afforded by the Rights.
(o) Anything in this Agreement to the contrary notwithstanding, in the
event that at any time after the date of this Agreement and prior to
the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or (ii)
effect a subdivision, combination or consolidation of the Common Stock
(by reclassification or otherwise than by payment of dividends in
shares of Common Stock) into a greater or lesser number of shares of
Common Stock, then in any such case (i) the number of shares of Common
Stock purchasable after such event upon proper exercise of each Right
shall be determined by multiplying the number so purchasable
immediately prior to such event by a fraction, the numerator of which
is the number of shares of Common Stock outstanding immediately prior
to such event and the denominator of which shall be the total number of
shares of Common Stock outstanding immediately after such event, and
(ii) each share of Common Stock outstanding immediately after such
event shall have issued with respect to it that number of Rights which
each share of Common Stock outstanding immediately
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prior to such event had issued with respect to it. The adjustments
provided for in this Section 11(o) shall be made successively whenever
such a dividend is declared or paid or such a subdivision, combination
or consolidation is effected.
(p) The Company shall not, at any time after the Distribution Date, (i)
consolidate with any other Person (other than a consolidation with a
Subsidiary of the Company in a transaction which does not violate the
provisions of Section 11(n) hereof), (ii) merge with or into any other
Person (other than a merger with a Subsidiary of the Company in a
transaction which does not violate the provisions of Section 11(n)
hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction or a series of related transactions,
assets, earning power or cash flow aggregating 50% or more of the
assets, earning power or cash flow of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than a sale or
transfer to the Company and/or any of its Subsidiaries in one or more
transactions each of which does not violate the provisions of Section
11(n) hereof), 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 agreements 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 the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) hereof shall have
received a distribution of Rights previously owned by such Person or
any of its Affiliates and Associates; provided, however, this Section
11(p) shall not affect the ability of any Subsidiary of the Company to
consolidate with, merge with or into, or sell or transfer assets or
earning power to, any other Subsidiary of the Company.
12. CERTIFICATE OF ADJUSTMENT
Whenever an adjustment is made as provided in Sections 11 or 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common Stock
a copy of such certificate and, (c) include a brief summary thereof in the next
quarterly or current report filed pursuant to the Exchange Act by the Company,
and, following the Distribution Date, mail such summary to each holder of a
Rights Certificate in accordance with Section 25 hereof. Notwithstanding the
foregoing sentence, the failure by the Company to make such certification or
give such notice shall not affect the validity of or the force or effect of the
requirement for such adjustment. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained.
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13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING POWER
(a) In the event that, on or following the Stock Acquisition Date, directly
or indirectly, (x) the Company shall consolidate with, or merge with
and into any other Person (other than a Subsidiary of the Company in a
transaction that complies with Section 11(n) hereof), and the Company
shall not be the continuing or surviving corporation of such
consolidation or merger, (y) the Company shall consolidate with, or
merge with, any other Person (other than a Subsidiary of the Company in
a transaction that complies with Section 11(n) hereof), and the Company
shall be the continuing or surviving corporation of such consolidation
or merger and in connection with such consolidation or merger all or
part of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash or
any other property (other than, in a case of any transaction described
in (x) or (y), a merger or consolidation which would result in all of
the securities generally entitled to vote in the election of directors
("Voting Securities") of the Company outstanding immediately prior
thereto continuing to represent (either by remaining outstanding or by
being converted into securities of the surviving entity) all of the
voting securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation and the holders of such
securities not having changed as a result of such merger or
consolidation), or (z) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise transfer), in
one or a series of related transactions, assets, earning power or cash
flow aggregating fifty percent (50%) or more of the assets, earning
power or cash flow of the Company and its Subsidiaries (taken as a
whole) to any other Person (other than the Company or any Subsidiary of
the Company in one or more transactions each of which does not violate
Section 11(n) hereof), (any such event described in (x), (y) or (z)
being a "Section 13 Event") then, and in each such case (except as
provided in Section 13(d) hereof), proper provision shall be made so
that (i) each holder of a Right, except as provided in Section 7(f)
hereof, shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price (without
giving effect to any adjustment to such Purchase Price pursuant to
Section 11(a)(ii)) multiplied by the number of shares of Common Stock
for which such Right is then exercisable, in accordance with the terms
of this Rights Agreement, such number of freely tradable shares of
Common Stock of the Principal Party, not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall
equal the result obtained by (A) multiplying the then current Purchase
Price (without giving effect to any adjustment to such Purchase Price
pursuant to Section 11(a)(ii)) by the number of shares of Common Stock
for which such Right is then exercisable, and (B) dividing that product
by fifty percent (50%) of the then current per share market price of
the shares of Common Stock of such Principal Party (determined pursuant
to Section 11(d) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties
of the Company pursuant to this Rights Agreement; (iii) the term
"Company" shall thereafter be deemed to refer to such Principal Party,
it being specifically intended that the provisions of Section 11 hereof
shall apply only to such Principal Party following the first occurrence
of a Section 13 Event; and (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient
number of its shares
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of Common Stock in accordance with Section 9 hereof) in connection with
the consummation of such transaction as may be necessary to assure that
the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to the Common Stock thereafter
deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y)
of the first sentence of Section 13(a), the Person that is the
issuer of any securities into which Common Stock of the
Company is converted in such merger or consolidation, and if
no securities are so issued, the Person that is the other
party to such merger or consolidation; and
(ii) in the case of any transaction described in clause (z) of the
first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earnings power
transferred pursuant to such transaction or transactions;
provided, however, that in any of the foregoing cases (a) if the Common
Stock of such Person is not at such time and has not been continuously
over the preceding twelve (12) month period registered under Section 12
of the Exchange Act, and such Person is a direct or indirect Subsidiary
of another Person the Common Stock of which is and has been so
registered, "Principal Party" shall refer to such other Person; (b) if
such Person is a Subsidiary, directly or indirectly, of more than one
(1) Person, the Common Stock of two (2) or more of which are and have
been so registered, "Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Stock having the greatest aggregate
market value; and (c) if such Person is owned, directly or indirectly,
by a joint venture formed by two (2) or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth
in paragraphs (a) and (b) above shall apply to each of the chains of
ownership having an interest in such joint ventures as if such party
were a "Subsidiary" of both or all of such joint ventures and the
Principal Parties in each such chain shall bear the obligations set
forth in this Section 13 in the same ratio as their direct or indirect
interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any such consolidation, merger, sale
or transfer unless the Principal Party shall have a sufficient number
of its authorized shares of Common Stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company
and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any consolidation,
merger, sale or transfer mentioned in paragraph (a) of this Section 13,
the Principal Party at its own expense shall:
(i) prepare and file a registration statement under the Securities
Act with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and use
its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and
(B) remain
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effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Final
Expiration Date;
(ii) use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the Rights under any
applicable blue sky laws of various states and jurisdictions
as may be necessary or appropriate; and
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all
respects with the requirements for registration on Form 10
under the Exchange Act.
(d) The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of
a Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described
in Section 13(a).
14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES
(a) The Company shall not be required to issue fractions of Rights, except
prior to the Distribution Date as provided in Section 11(o) hereof, or
to distribute Rights Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For the purposes
of this Section 14(a), the current market value of a whole Right shall
be the closing price of the Rights for the Trading Day immediately
prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall
be the last sale price regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange,
as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading or, if
such Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq Stock Market or such other system then in
use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in such Rights
selected by the Board. If on any such date no such market maker is
making a market in the Rights, the fair value of such Rights on such
date 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 Rights.
(b) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or exchange of the Rights for
shares of Common Stock pursuant to Section 24 of this Rights Agreement,
or to distribute certificates which evidence fractional
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shares of such securities. Fractions of shares of Common Stock may, at
the election of the Company, be evidenced by depository receipts,
pursuant to an appropriate agreement between the Company and a
depository selected by it; provided that such agreement shall provide
that the holders of such depository receipts shall have the rights,
privileges and preferences to which they are entitled as beneficial
owners of the Common Stock represented by such depository receipts. In
lieu of fractional shares of Common Stock or depository receipts, the
Company may pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the current market value of one share of
Common Stock. For the purposes of this Section 14(b), the current
market value of a share of Common Stock shall be the closing price of a
share of Common Stock (as determined pursuant to the second sentence of
Section 11(d) hereof) for the Trading Day immediately prior to the date
of such exercise.
(c) The holder of a Right by the acceptance of such Right expressly waives
his right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as provided above).
15. RIGHTS OF ACTION
All rights of action in respect of this Rights Agreement, excepting the
rights of action given to the Rights Agent under Sections 18 and 20 hereof, are
vested in the respective registered holders of the Rights Certificates (and,
prior to the Distribution Date, the registered holders of the Common Stock); and
any registered holder of any Rights Certificate (or, prior to the Distribution
Date, of the Common Stock), without the consent of the Rights Agent or of the
registered holder of any other Rights Certificate (or, prior to the Distribution
Date, of a Certificate representing the Common Stock), may, on his own behalf
and for his own benefit, enforce, and may institute and maintain any suit,
action or proceeding against the Company to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Rights Certificate (or
prior to the Distribution Date certificates for shares of Common Stock) in the
manner provided in such Rights Certificate and in this Rights Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Rights Agreement and will be entitled to
specific performance of the obligations under, and injunctive relief against,
actual or threatened violations of the obligations of any Person subject to,
this Rights Agreement.
16. AGREEMENT OF RIGHT HOLDERS
Every holder of a Right, by accepting the same, consents and agrees
with the Company and the Rights Agent and with every other holder of a Right
that:
(a) prior to the Distribution Date, the Rights will be transferable only in
connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Rights Certificates are transferable
only on the registry books of the Rights Agent if surrendered at the
principal office of the Rights Agent designated for such
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purpose, duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate forms and certificates fully
executed;
(c) subject to Sections 6(a) and 7(g) hereof, the Company and the Rights
Agent may deem and treat the person in whose name the Rights
Certificate (or, prior to the Distribution Date, the associated
certificates for shares of Common Stock) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Rights Certificates or the
associated certificates for shares of Common Stock made by anyone other
than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence
of Section 7(f), shall be affected by any notice to the contrary; and
(d) notwithstanding anything in this Rights Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or a beneficial interest in a Right or other
Person as a result of its inability to perform any of its obligations
under this Rights Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation
or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such
obligation; provided, however, the Company must use its best efforts to
have any such order, decree or ruling lifted or otherwise overturned as
soon as possible.
17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER
No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the shares of
Common Stock or any other securities of the Company, which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Rights Certificate be construed to confer upon the
holder of any Rights Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or other
actions affecting stockholders (except as provided in Section 25 hereof), or to
receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such certificate for Common Stock or Rights Certificate
shall have been exercised in accordance with the provisions hereof.
18. CONCERNING THE RIGHTS AGENT
(a) The Company shall pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time, on demand
of the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this
Rights Agreement and the exercise and performance of its duties
hereunder. The Company also shall indemnify the Rights Agent for, and
hold it harmless against, any loss, liability, or expense, incurred
without negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this Rights
Agreement, including the costs and expenses of defending against
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any claim of liability, and the indemnity provided for herein shall
survive the expiration of the Rights and the termination of this Rights
Agreement.
(b) The Rights Agent shall be protected and shall incur no liability for,
or in respect of any action taken, suffered or omitted by it in
connection with, its administration of this Rights Agreement in
reliance upon any Rights Certificate or certificate for the Common
Stock or for other securities of the Company, instrument of assignment
or transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document
believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons,
or otherwise upon the advice of counsel as set forth in Section 20
hereof.
19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT
Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
stock transfer or all or substantially all of the corporate trust business of
the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Rights Agreement without the execution or filing of any
paper or any further act on the part of any of the parties hereto, provided that
such corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Rights Agreement any of
the Rights Certificates shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Rights Certificates so countersigned; and in case
at that time any of the Rights Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Rights Certificates either in
the name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Rights Certificates have the full force
provided in the Rights Certificates and in this Rights Agreement.
In case at any time the name of the Rights Agent shall be changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
the Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in its changed
name; and in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Rights Agreement.
20. DUTIES OF RIGHTS AGENT
The Rights Agent undertakes the duties and obligations imposed by this
Rights Agreement upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
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(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Rights Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring
Person or any Affiliate or Associate thereof and the determination of
"current per share market price") be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by
a certificate signed by any one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Treasurer or
the Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization to the Rights Agent for
any action taken or suffered in good faith by it under the provisions
of this Rights Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any other
Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Rights Agreement or in
the Rights Certificates (except its countersignature on such Rights
Certificates) or be required to verify the same, but all such
statements and recitals are and shall be deemed to have been made by
the Company only.
(e) The Rights Agent shall not be under any responsibility in respect of
the validity of this Rights Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate (except
its countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in this
Rights Agreement or in any Rights Certificate; nor shall it be
responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 7(f) hereof) or
any adjustment in the terms of the Rights (including the manner, method
or amount thereof) provided for in Sections 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any such
change or adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after actual notice that such change
or adjustment is required); nor shall it by any act hereunder be deemed
to make any representation or warranty as to the authorization or
reservation of any Common Stock to be issued pursuant to this Rights
Agreement or any Rights Certificate or as to whether any Common Stock
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company shall perform, execute, acknowledge and deliver or cause to
be performed, executed, acknowledged and delivered all such further and
other acts, instruments and assurances as may reasonably be required by
the Rights Agent for the carrying out or performing by the Rights Agent
of the provisions of this Rights Agreement.
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(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from any one of the Chairman of the Board, the Chief Executive Officer,
the President, any Vice President, the Secretary or the Treasurer of
the Company, and to apply to such officers for advice or instructions
in connection with its duties, and it shall not be liable for any
action taken or suffered by it in good faith in accordance with
instructions of any such officer or for any delay in acting while
waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or employee of
the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as
though it were not Rights Agent under this Rights Agreement. Nothing
herein shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by
or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company
resulting from any such act, default, neglect or misconduct, provided
reasonable care was exercised in the selection and continued employment
thereof.
(j) No provision of this Rights Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of
its rights if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, split up, combination or exchange, the
certificate attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 and/or 2 thereof, the
Rights Agent shall not take any further action with respect to such
requested exercise, transfer, split up, combination or exchange without
first consulting with the Company.
21. CHANGE OF RIGHTS AGENT
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Rights Agreement upon thirty (30) days'
notice in writing mailed to the Company and to each transfer agent of the Common
Stock by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. The Company may remove the Rights Agent or any
successor Rights Agent upon thirty (30) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Stock by registered or certified mail, and to the holders of
the Rights Certificates by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has
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been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights Certificate or prior to
the Distribution Date, the holder of a certificate for Common Stock (who shall,
with such notice submit his Rights Certificate or certificate for Common Stock,
as the case may be, for inspection by the Company), then any registered holder
of any Rights Certificate may apply to any court of competent jurisdiction for
the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of any state
of the United States, in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to supervision
or examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
Twenty-Five Million Dollars ($25,000,000), or (b) an Affiliate of a corporation
described in clause (a) of this sentence. After appointment, the successor
Rights Agent shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and mail a notice thereof in writing
to the registered holders of the Rights Certificates or if prior to the
Distribution Date, the holders of certificates for Common Stock. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be.
22. ISSUANCE OF NEW RIGHTS CERTIFICATES
Notwithstanding any of the provisions of this Rights Agreement or of
the Rights to the contrary the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board to
reflect any adjustment or change in the Purchase Price or the number or kind or
class of stock or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Rights Agreement.
In addition, in connection with the issuance or sale of Common Stock
following the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Company (a) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company, and (b) may,
in any other case, if deemed necessary or appropriate by the Board, issue Rights
Certificates representing the appropriate number of Rights in connection with
such issuance or sale; provided, however, that (i) the Company shall not be
obligated to issue any such Rights Certificates if, and to the extent that, the
Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued, and (ii) no Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
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23. REDEMPTION
(a) The Board may, at its option, at any time prior to the earlier of (i)
the Close of Business on the tenth Business Day following the Stock
Acquisition Date, or (ii) the Final Expiration Date, cause the Company
to redeem all but not less than all of the then outstanding Rights at
an initial redemption price of .01 cents per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof ("Redemption Price"). The
redemption of the Rights by the Company may be made effective at such
time, on such basis and with such conditions as the Board in its sole
discretion may establish. Notwithstanding anything contained in this
Rights Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event until such time
as the Company's right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash, Common Stock
(based on the "current per share market price," as defined in Section
11(d) hereof, of the Common Stock at the time of redemption) or any
other form of consideration, or any combination of any of the
foregoing, deemed appropriate by the Board.
(b) Immediately upon the action of the Board ordering the redemption of the
Rights and without any further action and without any notice, the right
to exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price.
Promptly after the action of the Board ordering the redemption of the
Rights, the Company shall promptly give public notice of such
redemption; provided, however, that the failure to give, or any defect
in, the notice shall not affect the validity of such redemption. The
Company shall promptly mail a notice of such redemption to all the
holders of the then outstanding Rights by mailing such notice to all
such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the
registry books of the transfer agent for the Common Stock. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption
Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any
time in any manner other than as specifically set forth in this Section
23 or in Section 24 hereof, and other than in connection with the
purchase of Common Stock prior to the Distribution Date.
(c) Notwithstanding the provisions of Section 23(a) hereof, in the event
that a majority of the members of the Board are elected by stockholder
action by written consent, or are comprised of Persons elected at a
meeting of stockholders who were not nominated by the Board in office
immediately prior to such meeting, then (i) for a period of one hundred
and eighty (180) days following the effectiveness of such election, the
Rights shall not be redeemed if such redemption is reasonably likely to
have the purpose or effect of allowing any Person to become an
Acquiring Person or otherwise facilitating the occurrence of a
Triggering Event or a transaction with an Acquiring Person, and (ii)
the Rights may not be redeemed following such 180 day period if (x)
such redemption is reasonably likely to have the purpose or effect of
facilitating a Triggering Event or transaction with an
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Acquiring Person, and (y) during such 180 day period the Company
entered into any agreement, arrangement or understanding with any
Acquiring Person which is reasonably likely to have the purpose or
effect of facilitating a Triggering Event.
24. EXCHANGE
(a) The Board may, at its option, at any time after any Person becomes an
Acquiring Person, cause the Company to exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(f) hereof) for
shares of Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the "Exchange
Ratio"). Notwithstanding the foregoing, the Company shall not be
empowered to effect such exchange at any time after any Person (other
than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or any such Subsidiary, or any Person holding
Common Stock for or pursuant to the terms of any such plan entered into
by the Company to secure benefits payable under any employee benefit
plan of the Company or any Subsidiary of the Company or Xxxxxx X.
Xxxxxxx and his Affiliates or Associates), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of Common
Stock representing fifty percent (50%) or more of the Common Stock then
outstanding.
(b) Immediately upon the action of the Board ordering the exchange of any
Rights pursuant to subsection (a) of this Section 24 and without any
further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of
such Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied by
the Exchange Ratio. The Company shall promptly give public notice of
any such exchange; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such exchange.
The Company shall promptly mail a notice of any such exchange to all of
the holders of such Rights at such last addresses as they appear upon
the registry books of the Rights Agent. Any notice which is mailed in
the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Stock for Rights will be
effected and, in the event of any partial exchange, the number and kind
of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(f)
hereof) held by each holder of such Rights.
(c) In the event that there shall not be sufficient shares of Common Stock
issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24,
the Company shall take all such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of the
Rights or shall take such other action specified in Section 11(a)(iii)
hereof.
(d) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such
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fractional shares of Common Stock, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable, an
amount in cash equal to the same fraction of the current per share
market price of a whole share of Common Stock. For the purposes of this
subsection (d), the current per share market price of a whole share of
Common Stock shall be determined as of the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
25. NOTICE OF CERTAIN EVENTS
(a) In case the Company, following the Distribution Date, shall propose (i)
to pay any dividend payable in stock of any class or series to holders
of Common Stock or to make any other distribution to holders of Common
Stock (other than a regular quarterly cash dividend out of net profits
or surplus of the Company), (ii) to offer to holders of Common Stock
rights or warrants to subscribe for or to purchase any additional
Common Stock or any other securities, rights or options, (iii) to
effect any reclassification of the Common Stock (other than a
reclassification involving only the subdivision of outstanding Common
Stock), (iv) to effect any consolidation or merger into or with, or to
effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more
transactions, of fifty percent (50%) or more of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to, any
other Person (other than the Company and/or any of its Subsidiaries in
one or more transactions each of which does not violate Section 11(n)
hereof), or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to each
holder of a Rights Certificate, in accordance with Section 26 hereof, a
notice of such proposed action to the extent feasible, which shall
specify the record date for the purposes of such stock dividend, or
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of
participation therein by holders of Common Stock if any such date is to
be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least ten (10) days prior to the
record date for determining holders of Common Stock for purposes of
such action, and in the case of any such other action, at least ten
(10) days prior to the date of the taking of such proposed action or
the date of participation therein by holders of Common Stock, whichever
shall be the earlier. The failure to give notice required by this
Section 25 or any defect therein shall not affect the legality or
validity of the action taken by the Company or the vote upon any such
action.
(b) In case a Section 11(a)(ii) Event shall occur, then the Company shall
as soon as practicable thereafter give to each holder of a Rights
Certificate, in accordance with Section 26 hereof, a notice of the
occurrence of such event, which notice shall describe such event and
the consequences of such event to holders of Rights under Section
11(a)(ii) hereof.
26. NOTICES
Notices or demands authorized by this Rights Agreement to be given or
made by the Rights Agent or by the holder of any Rights Certificate to or on the
Company shall be sufficiently given or
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made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Reynard Motorsport, Inc.
0000 Xxxxxxxxxx Xxxx, Xxxxx 000
Xxxxxxxxxxxx, Xxxxxxx 00000
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Rights Agreement to be given or made by the Company or by the
holder of any Rights Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:
[to be completed]
---------------------------
---------------------------
---------------------------
Attention:
----------------
Notices or demands authorized by this Rights Agreement to be given or
made by the Company or the Rights Agent to the holder of any Rights Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown on the
registry books of the Company.
27. SUPPLEMENTS AND AMENDMENTS
Prior to the Distribution Date, the Company and the Rights Agent shall,
if the Board so directs, supplement or amend any provision of this Rights
Agreement without the approval of any holders of certificates representing
shares of Common Stock. From and after the Distribution Date, the Company and
the Rights Agent shall, if the Board so directs, supplement or amend this Rights
Agreement without the approval of any holders of Rights Certificates in order
(a) to cure any ambiguity, (b) to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provisions herein,
(c) to shorten or lengthen any time period hereunder or (d) to change or
supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring Person or an Affiliate
or Associate of an Acquiring Person); provided, however, that this Rights
Agreement may not be supplemented or amended to lengthen, pursuant to clause (c)
of this sentence, (i) a time period relating to when the Rights may be redeemed
at such time as the Rights are not then redeemable, or (ii) any other time
period unless such lengthening is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to, the holders of Rights. Without
limiting the foregoing, the Company may at any time prior to such time as any
Person becomes an Acquiring Person amend this Rights Agreement to lower the
thresholds set forth in Sections 1(a) and 3(a) hereof from fifteen percent (15%)
to not less than the greater of (a) any percentage greater than the largest
percentage of the then outstanding Common Stock then known by the Company to be
beneficially owned by any Person (other than the Company, any Subsidiary of the
Company, any
31
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employee benefit plan of the Company or any Subsidiary of the Company, any
Person holding Common Stock for or pursuant to the terms of any such plan or
Xxxxxx X. Xxxxxxx and his Affiliates and Associates) together with all
Affiliates or Associates of such Person, or (b) ten percent (10%). Upon the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such supplement or amendment,
provided that such supplement or amendment does not adversely affect the rights
or obligations of the Rights Agent under Sections 18 or 20 of this Rights
Agreement. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of Common
Stock. Notwithstanding anything contained in this Agreement to the contrary, in
the event that a majority of the Board is comprised of (i) persons elected by
stockholder consent or persons elected at a meeting who were not nominated by
the Board in office immediately prior to such meeting, and/or (ii) successors of
such persons elected to the Board for the purpose of either facilitating a
Triggering Event with an Acquiring Person or circumventing directly or
indirectly the provisions of this Section 27, then for a period of 180 days
following the effectiveness of such action, this Agreement shall not be amended
or supplemented in any manner reasonably likely to have the purpose or effect of
facilitating a Triggering Event with an Acquiring Person.
28. SUCCESSORS
All the covenants and provisions of this Rights Agreement by or for the
benefit of the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
29. DETERMINATIONS BY THE BOARD OF DIRECTORS
For all purposes of this Rights Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular time, including
for purposes of determining the particular percentage of such outstanding shares
of Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Exchange Act. The Board shall have the exclusive power
and authority to administer this Rights Agreement and to exercise all rights and
powers specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Rights Agreement,
including, without limitation, the right and power to (a) interpret the
provisions of this Rights Agreement, and (b) make all determinations deemed
necessary or advisable for the administration of this Rights Agreement
(including a determination to redeem or not redeem the Rights or to amend the
Rights Agreement or a determination that an adjustment to the Redemption Price
or Exchange Ratio is or is not appropriate). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in good faith, shall (x) be final, conclusive and binding on the Company, the
Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board to any liability to the holders of the Rights.
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30. BENEFITS OF THIS RIGHTS AGREEMENT
Nothing in this Rights Agreement shall be construed to give to any
Person other than the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock) any legal or equitable right, remedy or claim under
this Rights Agreement; but this Rights Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock).
31. SEVERABILITY
If any term, provision, covenant or restriction of this Rights
Agreement is held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Rights Agreement shall remain in full force
and effect and shall in no way be affected, impaired or invalidated; provided,
however, that notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or authority
to be invalid, void or unenforceable and the Board determines in its good faith
judgment that severing the invalid, void or unenforceable language from this
Agreement would adversely affect the purpose or effect of this Agreement, the
right of redemption set forth in Section 23 hereof shall be reinstated and shall
not expire until the Close of Business on the tenth day following the date of
such determination by the Board.
32. GOVERNING LAW
This Rights Agreement and each Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of Delaware
and for all purposes shall be governed by and construed in accordance with the
laws of such State applicable to contracts to be made and performed entirely
within such State.
33. COUNTERPARTS
This Rights Agreement may be executed in any number of counterparts,
and each of such counterparts shall for all purposes be deemed to be an
original, and all such counterparts shall together constitute one and the same
instrument.
34. DESCRIPTIVE HEADINGS
Descriptive headings of the several Sections of this Rights Agreement
are inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
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37
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed and attested, all as of the day and year first
above written.
REYNARD MOTORSPORT, INC.
Attest:
By: By:
---------------------------- --------------------------------
Secretary (title)
[AGENT]
Attest:
By: By:
---------------------------- --------------------------------
Secretary (title)
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EXHIBIT A
FORM OF RIGHTS CERTIFICATE
Certificate No. R-_____ ______Rights
NOT EXERCISABLE AFTER ________________, 2008 OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT .01 cents PER RIGHT AND
TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL
AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SUCH AGREEMENT.]*
Rights Certificate
REYNARD MOTORSPORT, INC.
This certifies that _________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of _______________, 1998 (the "Rights Agreement"), between
Reynard Motorsport, Inc., a Delaware corporation (the "Company") and
[___________________________] (the "Rights Agent"), to purchase from the Company
at any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., Indianapolis, Indiana time, on
_______________, 2008, at the principal office of the Rights Agent, or at the
office of its successor as Rights Agent, one fully paid non-assessable share of
Reynard Motorsport, Inc. Common Stock, par value .01 cents per share (the
"Stock"), at a purchase price of $______ per share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares of Stock which may be purchased upon
exercise hereof) set forth above, and the Purchase Price set forth above, are
the number and Purchase Price as of _______________, 1998 based on the shares of
Stock of the Company as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of shares of Stock which may be
purchased upon the exercise of the Rights evidenced by this Rights Certificate
are subject to modification and adjustment upon the happening of certain events.
--------
* The portion of the legend in brackets shall be inserted only if applicable and
shall replace the preceding sentence.
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39
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the offices of the Rights Agent.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged for
another Rights Certificate or Certificates of like tenor and date evidencing
Rights entitling the holder to purchase a like aggregate number of shares of
Stock as the Rights evidenced by the Rights Certificate or Certificates
surrendered shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Rights Certificate or Certificates for the number
of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Rights Certificate (i) may be redeemed by the Company at its option at a
redemption price of .01 cents per Right or (ii) may be exchanged in whole or in
part for shares of Stock. No fractional shares of Stock will be issued upon the
exercise of any Right or Rights evidenced hereby, but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the shares
of Stock or of any other securities of the Company which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
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Witness the facsimile signature of the proper officers of the Company.
Dated as of _____________, ______.
ATTEST: REYNARD MOTORSPORT, INC.
By:
----------------------------
Countersigned:
-----------------------
[AGENT]
By:
----------------------------------
(Authorized Signature)
A-3
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EXHIBIT A
FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer the
Rights Certificate.)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
_______________________________________________________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ___________________________
, Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _________________, _________ ______________________________
Signature
Signature Medallion Guaranteed:
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION, (BANKS, STOCK-BROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT
UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17AD-15.
--------------------------------------------------
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement), and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person.
Dated: _________________, _________
______________________________
Signature
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Form of Election to Purchase
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: ___________________:
The undersigned hereby irrevocably elects to exercise ______ Rights
represented by this Rights Certificate to purchase the shares of Common Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other person which may be issuable upon the exercise of the
Rights) and requests that certificates for such shares be issued in the name of
and deliverable to:
_______________________________________________________________________________
(Please insert social security number or other identifying number)
_______________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
_______________________________________________________________________________
(Please insert social security number or other identifying number)
_______________________________________________________________________________
(Please print name and address)
Dated:__________________, ____ _________________________________
Signature
Signature Medallion Guaranteed:
THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR
INSTITUTION, (BANKS, STOCK-BROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT
UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM),
PURSUANT TO S.E.C. RULE 17AD-15.
--------------------------------------------------
The undersigned hereby certifies by checking the appropriate boxes
that:
A-5
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(1) this Rights Certificate [ ] is [ ] is not being exercised by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined in the Rights
Agreement), and
(2) after due inquiry and to the best knowledge of the undersigned, the
undersigned [ ] did [ ] did not acquire the Rights evidenced by this Rights
Certificate from any Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person.
Dated: _________________, ________
_________________________________
Signature
A-6
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EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
Effective as of _______________, 1998, the Board of Directors (the
"Board") of Reynard Motorsport, Inc. (the "Company") adopted a Rights Agreement
(the "Rights Agreement") and authorized and declared a dividend of one common
stock purchase right (a "Right") for each outstanding share of common stock, par
value .01 cents per share, of the Company (the "Common Stock"). The dividend is
payable on _____________, 1998, to the stockholders of record on _____________,
1998 (the "Record Date"), and with respect to Common Stock issued thereafter
until the Distribution Date (as hereinafter defined) or the expiration or
earlier redemption or exchange of the Rights. Except as set forth below, each
Right entitles the registered holder to purchase from the Company, at any time
after the Distribution Date one share of Common Stock at a price per share of
$[___], subject to adjustment (the "Purchase Price"). The description and terms
of the Rights are as set forth in the Rights Agreement, dated ____________, 1998
between the Company and ___________________, as Rights Agent.
Initially the Rights will be attached to all certificates representing
shares of Common Stock then outstanding, and no separate Rights Certificates
will be distributed. The Rights will separate from the Common Stock upon the
earlier to occur of (i) ten (10) Business Days after the public announcement of
a person's or group of affiliated or associated persons (other than Xxxxxx X.
Xxxxxxx, the Company, its subsidiaries or employee benefit plans and Affiliates
and Associates of such persons) having acquired beneficial ownership of fifteen
percent (15%) or more of the outstanding Common Stock (such person or group
being hereinafter referred to as an "Acquiring Person"); or (ii) ten (10)
Business Days (or such later date as the Board may determine) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in a person or group's
becoming an Acquiring Person (the earlier of such dates being called the
"Distribution Date").
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with, and only with, the Common Stock. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Stock certificates issued after the Record Date, upon transfer or new
issuance of Common Stock, will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
shares of Common Stock outstanding as of the Record Date, even without such
notation or a copy of this Summary of Rights being attached thereto, will also
constitute the transfer of the Rights associated with the shares of Common Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date (and to each initial record holder of
certain Common Stock issued after the Distribution Date), and such separate
Rights Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on ____________, 2008 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case as described below.
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In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right will thereafter have
the right (the "Flip-In Right") to acquire a share or Common Stock for a
purchase price equal to fifty percent (50%) of the then current market price.
Notwithstanding the foregoing, all Rights that are, or were, beneficially owned
by any Acquiring Person or any affiliate or associate thereof will be null and
void and not exercisable.
In the event that, at any time following the Distribution Date, (i) the
Company is acquired in a merger or other business combination transaction in
which the holders of all of the outstanding shares of Common Stock immediately
prior to the consummation of the transaction are not the holders of all of the
surviving corporation's voting power, or (ii) fifty percent (50%) or more of the
Company's assets or earning power is sold or transferred, then each holder of a
Right (except Rights which have previously been voided as set forth above) shall
thereafter have the right (the "Flip-Over Right") to receive, upon exercise and
payment of the Purchase Price, common stock of the acquiring company for a
Purchase Price equal to fifty percent (50%) of the then current market value. If
a transaction would otherwise result in a holder's having a Flip-In as well as a
Flip-Over Right, then only the Flip-Over Right will be exercisable; if a
transaction results in a holder's having a Flip-Over Right subsequent to a
transaction resulting in a holder's having a Flip-In Right, a holder will have
Flip-Over Rights only to the extent such holder's Flip-In Rights have not been
exercised.
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Stock, (ii) upon the grant to holders of Common Stock of certain rights or
warrants to subscribe for or purchase Common Stock at a price, or securities
convertible into Common Stock with a conversion price, less than the then
current market price of the Common Stock, or (iii) upon the distribution to
holders of Common Stock of evidences of indebtedness or assets (excluding
regular periodic cash dividends paid out of net profits or surplus or dividends
payable in shares of Common Stock) or of subscription rights or warrants (other
than those referred to above). However, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least one
percent (1%).
No fractional shares of Common Stock will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of Common
Stock on the last trading day prior to the date of exercise.
At any time prior to the tenth Business Day following the time a person
or group of affiliated or associated persons becomes an Acquiring Person, the
Board may redeem the Rights in whole, but not in part, at a price of .01 cents
per Right (the "Redemption Price"). The redemption of the Rights may be made
effective at such time on such basis and with such conditions as the Board in
its sole discretion may establish. Immediately upon any redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
B-2
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At any time after any person becomes an Acquiring Person and prior to
the acquisition by such person or group of affiliated or associated persons of
shares of Common Stock representing fifty percent (50%) or more of the then
outstanding Common Stock, the Board may exchange the Rights (other than Rights
which have become null and void), in whole or in part, at an exchange ratio of
one share of Common Stock per Right (subject to adjustment).
All of the provisions of the Rights Agreement and the terms of the
Rights may be amended prior to the Distribution Date by the Board for any reason
it deems appropriate without the consent of the Holders of the Rights. Prior to
the Distribution Date, the Board is also authorized, as it deems appropriate, to
lower the thresholds for Acquiring Person status to not less than the greater of
(i) any percentage greater than the largest percentage then held by any
stockholder other than Xxxxxx X. Xxxxxxx, or (ii) ten percent (10%). After the
Distribution Date, the provisions of the Rights Agreement may be amended by the
Board in order to cure any ambiguity, defect or inconsistency, to make changes
which do not adversely affect the interests of holders of Rights (excluding the
interests of any Acquiring Person), or, subject to certain limitations, to
shorten or lengthen any time period under the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders of the Company, stockholders may, depending upon the
circumstances, recognize taxable income should the Rights become exercisable or
upon the occurrence of certain events thereafter.
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Board. The Rights should not interfere with any
merger or other business combination approved by the Board because the rights
may be redeemed by the Company at the Redemption Price prior to the occurrence
of a Distribution Date.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Registration Statement on
Form 8-A with respect to the Rights filed with the Securities and Exchange
Commission (Commission File No. ______________). A copy of the Rights Agreement
is available free of charge from the Company. This summary description of the
Rights does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is hereby incorporated herein by
reference.
B-3
