Exhibit 1.1
MOTOROLA, INC.
and
XXXXXX TRUST AND SAVINGS BANK
Rights Agent
RIGHTS AGREEMENT
Dated as of November 5, 1998
Table of Contents
Page
Recitals Recitals 1
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 7
Section 3. Issuance of Rights Certificates 7
Section 4. Form of Rights Certificates 9
Section 5. Execution, Countersignature and Registration 9
Section 6. Transfer, Division, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates 10
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights 11
Section 8. Cancellation and Destruction of Rights Certificates 12
Section 9. Reservation and Availability of Preferred Stock 13
Section 10. Preferred Stock Record Date 14
Section 11. Adjustments to Purchase Price, Number of Shares or Number
of Rights 14
Section 12. Certification of Adjustments 24
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power 25
Section 14. Fractional Rights and Fractional Shares 27
Section 15. Rights of Action 28
Section 16. Agreement of Rights Holders Concerning Transfer and
Ownership of Rights 28
Section 17. Rights Holder Not Deemed a Stockholder 29
Section 18. Concerning the Rights Agent 29
Section 19. Merger or Consolidation or Change of Name of Rights Agent 29
Section 20. Duties of Rights Agent 30
Section 21. Change of Rights Agent 32
Section 22. Issuance of New Rights Certificates 33
Section 23. Redemption and Termination 33
Section 24. Notice of Certain Events 34
Section 25. Notices 35
Section 26. Supplements and Amendments 36
Section 27. Successors 37
Section 28. Benefits of this Agreement 37
Section 29. Severability 37
Section 30. Governing Law 37
Section 31. Counterparts 37
Section 32. Descriptive Headings 37
Section 33. Grammatical Construction 37
Exhibit A - Certificate of Designation, Preferences and Rights
of Junior Participating Preferred Stock, Series B
Exhibit B - Form of Rights Certificate
Exhibit C - Form of Summary of Rights
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT, dated as of November 5, 1998, is made
between Motorola, Inc., a Delaware corporation (the "Company"), and Xxxxxx
Trust and Savings Bank, an Illinois banking corporation (the "Rights
Agent").
RECITALS
The Board of Directors of the Company has authorized and declared
the payment of a dividend of one preferred share purchase right (a "Right")
for each share of Common Stock (as defined in Section 1) outstanding on the
Record Date (as defined in Section 1) and has authorized the issuance of
one Right for each share of Common Stock issued after the Record Date and
before the earliest of the Distribution Date, the Redemption Date, the
Exchange Date and the Expiration Date (as such terms are defined in
Section 1) and in certain cases following the Distribution Date. Each
Right will represent, as of the Record Date, the right to purchase one ten-
thousandth of one share of Preferred Stock (as defined in Section 1) upon
the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth in this Agreement, the parties hereby agree as
follows:
Section 1 Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" means any Person who or which,
together with all Affiliates and Associates of such Person, is (or has
previously been, at any time after the date of this Agreement, whether or
not such Person(s) continues to be) the Beneficial Owner of 10% or more of
the Common Stock then outstanding (determined without taking into account
any securities exercisable or exchangeable for, or convertible into, Common
Stock, other than any such securities beneficially owned by the Acquiring
Person and Affiliates and Associates of such Person). However, "Acquiring
Person" shall not include any Exempt Person.
Notwithstanding the foregoing, a Person shall not become an
"Acquiring Person" solely as the result of an acquisition of Common Stock
by the Company or any Subsidiary which, by reducing the number of shares
outstanding, increases the proportionate number of shares beneficially
owned by such Person to 10% or more of the Common Stock then outstanding as
determined above; provided, however, that if a Person becomes the
Beneficial Owner of 10% or more of the Common Stock then outstanding as
determined above solely by reason of such a share acquisition by the
Company and such Person shall, after becoming the Beneficial Owner of such
Common Stock, become the Beneficial Owner of any additional shares of
Common Stock by any means whatsoever (other than as a result of the
subsequent occurrence of a stock dividend or a subdivision of the Common
Stock into a larger number of shares or a similar transaction), then such
Person shall be deemed to be an "Acquiring Person."
Notwithstanding the foregoing, if a majority of the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an "Acquiring Person," as defined pursuant to the foregoing
provisions of this Section 1(a), has become such inadvertently, and such
Person divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an "Acquiring Person," as
defined pursuant to the foregoing provisions of this Section 1(a), then
such Person shall not be deemed to be an "Acquiring Person" for any
purposes of this Agreement. The determination of whether such Person's
becoming an Acquiring Person shall have been inadvertent and the
determination of whether the divestment of sufficient shares shall have
been made as promptly as practicable shall be made by a majority of the
Board of Directors of the Company.
(b) "Adjustment Number" has the meaning set forth in, and
shall be calculated in accordance with, the Certificate of Designation,
Preferences and Rights of Junior Participating Preferred Stock, Series B,
attached as Exhibit A hereto.
(c) "Affiliate" has the meaning given to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act, as in
effect on the date of this Agreement; provided that, for purposes of this
Agreement, the term "Affiliate" shall not include any Person that is an
Exempt Person.
(d) "Associate" has the meaning given to such term in Rule
12b-2 of the General Rules and Regulations under the Exchange Act, as in
effect on the date of this Agreement; provided that, for purposes of this
Agreement, the term "Associate" shall not include any Person that is an
Exempt Person.
(e) Except as provided below, a Person shall be deemed to be
the "Beneficial Owner" of, and shall be deemed to "beneficially own," any
securities:
(1) which such Person or any Affiliate or Associate of
such Person beneficially owns, directly or indirectly;
(2) which such Person or any Affiliate or Associate of
such Person has, directly or indirectly, the right or obligation (whether
or not then exercisable or effective) to acquire pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; provided, however, that a
Person will not be deemed the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any Affiliate or Associate of such Person until
such tendered securities are accepted for purchase or exchange;
(3) which such Person or any Affiliate or Associate of
such Person has, directly or indirectly, the right (whether or not then
exercisable) to vote, or to direct the voting of, pursuant to any
agreement, arrangement or understanding (whether or not in writing);
provided, however, that a Person shall not be deemed the Beneficial Owner
of, or to beneficially own, any security pursuant to this clause (iii) if
the agreement, arrangement or understanding to vote, or to direct the
voting of, such security (A) arises solely from a revocable proxy or
consent given in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the Exchange Act and applicable rules
and regulations thereunder and (B) is not also then reportable under Item 6
(or any comparable or successor item) of Schedule 13D under the Exchange
Act (or any comparable or successor schedule or report);
(4) which such Person or any Affiliate or Associate of
such Person has "beneficial ownership" of as determined pursuant to
Rule 13d-3 of the General Rules and Regulations under the Exchange Act or
any successor provision; or
(5) which are beneficially owned, directly or
indirectly, by any other Person or any Affiliate or Associate of such other
Person with whom such Person or any Affiliate or Associate of such Person
has any agreement, arrangement or understanding (whether or not in writing)
for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in clause (iii) of this Section 1(d)) or
disposing of any securities of the Company.
Nothing in the preceding sentence shall cause a Person engaged in
business as an underwriter of securities to be the "Beneficial Owner" of,
or to "beneficially own," any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of 40 days after the date of such acquisition.
Notwithstanding anything in this Agreement to the contrary, for
purposes of this Agreement, no Person shall be treated as the "Beneficial
Owner" of, or be deemed to "beneficially own," any securities solely by
reason of the ownership of those securities by any other Person that is an
Exempt Person.
Notwithstanding anything in this definition of Beneficial
Ownership 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 under the
preceding provisions in this definition.
(f) "Business Combination" has the meaning set forth in
Section 13 of this Agreement.
(g) "Business Day" means any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New York or
Illinois are authorized or obligated by law or executive order to close.
(h) "Close of Business" on any given date means 5:00 p.m.,
Chicago, Illinois time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 p.m. Chicago, Illinois time, on
the next succeeding Business Day.
(i) "Common Equivalent Share" has the meaning set forth in
Section 11(c)(1)(B) of this Agreement.
(j) "Common Share" has the meaning set forth in Section
11(c)(1)(B) of this Agreement.
(k) "Common Stock" when used with reference to the Company
means the Common Stock, par value $3.00 per share, of the Company (as the
same may be changed by reason of any combination, subdivision or
reclassification of the Common Stock). "Common Stock" when used with
reference to any Person (other than the Company prior to a Business
Combination) means shares of capital stock of such Person (if such Person
is a corporation) of any class or series, or units of equity interests in
such Person (if such Person is not a corporation) of any class or series,
the terms of which shares or units do not limit (as a fixed amount and not
merely in proportional terms) the amount of dividends or income payable or
distributable on such shares or units or the amount of assets distributable
on such shares or units upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person and do not provide that such
shares or units are subject to redemption at the option of such Person, or
any shares of capital stock or units of equity interests into which the
foregoing shall be reclassified or changed; provided, however, that if at
any time there are more than one such class or series of capital stock of
or equity interests in such Person, "Common Stock" of such Person will
include all such classes and series substantially in the proportion of the
total number of shares or other units of each such class or series
outstanding at such time.
(l) "Current Market Price" per share or unit of Common Stock,
Common Equivalent Share or any other security on any date is the average of
the daily closing prices per share or unit of such Common Stock, Common
Equivalent Share or any other security for the 30 consecutive Trading Days
(as such term is hereinafter defined) immediately prior to such date for
the purpose of any computation under this Agreement; provided, however,
that in the event that the Current Market Price per share of Common Stock,
Common Equivalent Share or any other security is determined during a period
following the announcement by the issuer of such Common Stock, Common
Equivalent Share or any other security of (i) a dividend or distribution on
such Common Stock, Common Equivalent Share or any other security other than
a regular quarterly cash dividend, or (ii) any subdivision, combination or
reclassification of such Common Stock, Common Equivalent Share or any other
security, and prior to the expiration of 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 Market Price" must be appropriately adjusted to take
into account such dividend, distribution, subdivision, combination or
reclassification. The closing price for each Trading Day shall be the last
sale price, regular way, on such day, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way,
on such day, 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 ("NYSE") or, if the Common Stock,
Common Equivalent Share or any other security is not listed or admitted to
trading on the NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal United
States national securities exchange on which the Common Stock, Common
Equivalent Share or any other security is listed or admitted to trading or,
if the Common Stock, Common Equivalent Share or any other security is not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low
asked prices in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations System
("NASDAQ") or such other system then in use, or, if on any such date the
Common Stock, Common Equivalent Share or any other security is not quoted
by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the security
selected by a majority of the Board of Directors of the Company. If no
such market maker is making a market, the fair market value of such shares
or units on such day shall be determined in good faith by a majority of the
Board of Directors of the Company, which determination shall be described
in a statement filed with the Rights Agent and shall be binding and
conclusive for all purposes. The term "Trading Day" means a day on which
the principal United States national securities exchange on which the
Common Stock, Common Equivalent Share or any other security is listed or
admitted to trading is open for the transaction of business or, if the
Common Stock, Common Equivalent Share or any other security is not listed
or admitted to trading on any United States national securities exchange,
but is traded in the over-the-counter market, then any day for which the
high bid and low asked prices in the over-the-counter market are reported,
or if the Common Stock, Common Equivalent Share or any other security is
not traded in the over-the-counter market, then a Business Day. If the
Preferred Stock is not publicly traded, the "Current Market Price" of the
Preferred Stock shall be conclusively deemed to be the Current Market Price
of the Common Stock as determined pursuant to this paragraph of Section 1
(appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof), multiplied by the
Adjustment Number. Each Common Equivalent Share consisting of preferred
stock other than Preferred Stock shall be conclusively deemed to have the
same "Current Market Price" as a Common Equivalent Share consisting of
Preferred Stock.
(m) "Distribution Date" means the earlier of (i) the tenth
day after the Stock Acquisition Date and (ii) the tenth Business Day after
commencement of or public disclosure of an intention to commence
(including, without limitation, any such commencement or public disclosure
which occurs before or after the date of this Agreement and prior to the
issuance of the Rights) a tender offer or exchange offer by a Person if,
after acquiring the maximum number of securities sought pursuant to such
offer, such Person, or any Affiliate or Associate of such Person, would be
an Acquiring Person. A majority of the Board of Directors of the Company
may defer the date set forth in clause (ii) of the preceding sentence to a
specified later date or to an unspecified later date to be determined by a
subsequent action or event.
(n) "Exchange Act" means the Securities Exchange Act of 1934,
as amended, and any successor statute.
(o) "Exchange Date" means the time at which Rights are
exchanged pursuant to Section 11(c)(2).
(p) "Exempt Event" means with respect to any Person, the
acquisition by such Person of Beneficial Ownership of Common Stock solely
as a result of the occurrence of a Triggering Event and the effect of such
Triggering Event on the last proviso of clause (ii) of the definition of
Beneficial Owner, other than a Triggering Event in which such Person
becomes an Acquiring Person.
(q) "Exempt Person" means (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the Company
or of any Subsidiary of the Company and (iv) any Person holding Common
Stock for any such employee benefit plan or for employees of the Company or
of any Subsidiary of the Company pursuant to the terms of any such employee
benefit plan.
(r) "Exercise Amount" means the amount payable by the holder
as a condition to the exercise of one Right. Until and unless it shall be
adjusted in accordance with this Agreement, the Exercise Amount shall be
$200.
(s) "Expiration Date" means the Close of Business on November
20, 2008.
(t) "Person" means any individual, firm, corporation, limited
liability company, partnership, joint venture, association, trust,
unincorporated organization or other entity, and shall include any "group"
as that term is used in Rule 13d-5(b) under the Exchange Act (or any
successor provision).
(u) "Preferred Stock" means the Company's Junior
Participating Preferred Stock, Series B, par value $100 per share, having
the rights and preferences set forth in the Certificate of Designation,
Preferences and Rights of Junior Participating Preferred Stock, Series B,
attached hereto as Exhibit A.
(v) "Principal Party" means (i) in the case of any Business
Combination described in clause (i), (ii) or (iii) of the first sentence of
Section 13(a), (A) the Person that is the issuer of any securities into
which shares of Common Stock of the Company are converted or for which they
are exchanged in such Business Combination or, if there is more than one
such issuer, the issuer of the Common Stock which has the greatest
aggregate market value or (B) if no securities are so issued, the Person
that survives or results from the Business Combination or, if there is more
than one such Person, the Person the Common Stock of which has the greatest
aggregate market value, and (ii) in the case of any Business Combination
described in clause (iv) of the first sentence in Section 13(a), the Person
that receives the greatest portion of the assets or earning power
transferred pursuant to such Business Combination or, if each Person that
is a party to such Business Combination receives the same portion of the
assets or earning power so transferred or if the Person receiving the
greatest portion of the assets or earning power cannot reasonably be
determined, whichever of such Persons is the issuer of the Common Stock
which has the greatest aggregate market value; provided, however, that in
any such case, if the Common Stock of such Person is not at such time and
has not been continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act and such Person is a direct or
indirect Subsidiary of one or more other Persons, then (x) "Principal
Party" refers to whichever of such other Persons has Common Stock that is
and has been continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act; (y) if the Common Stocks of two or
more of such other Persons are and have been so registered, "Principal
Party" refers to whichever of such other Persons is the issuer of the
Common Stock which has the greatest aggregate market value; or (z) if the
Common Stock of none of such other Persons has been so registered,
"Principal Party" refers to whichever of such other Persons (other than an
individual) is the Person which has the equity securities with the greatest
aggregate market value. In case such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not
owned, directly or indirectly, by the same Person, the rules set forth
above apply to each of the chains of ownership having an interest in such
joint venture as if such Person were a Subsidiary of both or all of such
joint venturers and the Principal Parties in each such chain shall bear the
obligations set forth in Section 13 in the same ratio as their direct or
indirect interests in such Person bear to the total of such interests.
(w) "Purchase Price:" Until the Trigger Date, the term
Purchase Price means the price at which one ten-thousandth of a share of
Preferred Stock shall be purchasable with the Rights. The Purchase Price
shall be $200 per one ten-thousandth of a share of Preferred Stock until
and unless it shall be adjusted pursuant to this Agreement. Immediately
after the Trigger Date, the term "Purchase Price" shall mean the price per
Common Share for which Common Shares shall be purchasable with the Rights.
Thereafter the term "Purchase Price" as applied with respect to each kind
of stock or other property purchasable with the Rights as a result of
adjustments prescribed by this Agreement shall mean the price at which each
share of such stock or the smallest available unit of such other property
is purchasable with the Rights.
(x) "Record Date" means the Close of Business on November 20,
1998.
(y) "Redemption Date" means the time at which the Rights are
scheduled to be redeemed as provided in Section 23.
(z) "Redemption Price" has the meaning given to such term in
Section 23.
(aa) "Securities Act" means the Securities Act of 1933, as
amended, and any successor statute.
(bb) "Stock Acquisition Date" means the first date of public
disclosure by the Company, an Acquiring Person or otherwise that an
Acquiring Person has become such.
(cc) "Subsidiary" has the meaning given to such term in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act, as
in effect on the date of this Agreement.
(dd) "Trigger Date" means the first date upon which a Person
becomes an Acquiring Person.
(ee) "Triggering Event" shall mean a Person becoming an
Acquiring Person.
Section 2 Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable.
Section 3 Issuance of Rights Certificates.
(a) Until the Distribution Date: (i) the Rights shall be
issued in respect of and shall be evidenced by the certificates
representing the shares of Common Stock issued and outstanding on the
Record Date and shares of Common Stock issued or which become outstanding
after the Record Date and prior to the earliest of the Distribution Date,
the Redemption Date, the Exchange Date and the Expiration Date (which
certificates for Common Stock shall be deemed to also be certificates
evidencing the Rights), and not by separate certificates; (ii) the
registered holders of such shares of Common Stock shall also be the
registered holders of the Rights associated with such shares; and (iii) the
Rights shall be transferable only in connection with the transfer of shares
of Common Stock, and the surrender for transfer of any certificate for such
shares of Common Stock shall also constitute the surrender for transfer of
the Rights associated with such shares. As soon as practicable after the
Company has notified the Rights Agent of the occurrence of the Distribution
Date, the Rights Agent shall, at the expense of the Company (except as
otherwise provided in Section 7(e)), mail, by first-class, insured, postage
prepaid mail, to each record holder of the Common Stock as of the Close of
Business on the Distribution Date, as shown by the records of the Company,
at the address of such holder shown on such records, one or more
certificates evidencing the Rights ("Rights Certificates"), in
substantially the form of Exhibit B hereto, evidencing one Right (as
adjusted from time to time pursuant to this Agreement) for each share of
Common Stock so held. From and after the Distribution Date, the Rights
will be evidenced solely by such Rights Certificates.
(b) Rights shall be issued in respect of all shares of Common
Stock which are issued or sold by the Company after the Record Date but
prior to the earliest of the Distribution Date, the Redemption Date, the
Exchange Date and the Expiration Date. In addition, in connection with the
issuance or sale of Common Stock by the Company following the Distribution
Date and prior to the earliest of the Redemption Date, the Exchange Date
and the Expiration Date, the Company shall, with respect to Common Stock so
issued or sold (i) pursuant to the exercise of stock options issued prior
to the Distribution Date or under any employee plan or arrangement created
prior to the Distribution Date, or (ii) upon the exercise, conversion or
exchange of securities issued by the Company prior to the Distribution
Date, issue Rights and Rights Certificates representing the appropriate
number of Rights in connection with such issuance or sale; provided,
however, that (x) no such Rights and Rights Certificate shall be issued 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 (y) no such Rights and Rights Certificates shall be
issued if, and to the extent that, appropriate adjustment shall otherwise
have been made in lieu of the issuance thereof. Certificates issued after
the Record Date representing shares of Common Stock outstanding on the
Record Date and shares of Common Stock issued after the Record Date but
prior to the earliest of the Distribution Date, the Redemption Date, the
Exchange Date and the Expiration Date shall have impressed, printed, or
written on, or otherwise affixed to them a legend substantially in the
following form:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a
Rights Agreement between Motorola, Inc. (the
"Company") and Xxxxxx Trust and Savings Bank, as
Rights Agent, dated as of November 5, 1998 (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 the
Company. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer
be evidenced by this certificate. The Company will
mail to the holder of this certificate a copy of the
Rights Agreement without charge after receipt of a
written request therefor. Under certain
circumstances, Rights that were, are or become
beneficially owned by Acquiring Persons or their
Associates or Affiliates (as such terms are defined
in the Rights Agreement) may become null and void and
the holder of any of such Rights (including any
subsequent holder) shall not have any right to
exercise such Rights.
(c) Notwithstanding any other provision of this Agreement,
neither the Company, the Rights Agent nor anyone else shall have any
obligation to issue any Rights Certificate to an Acquiring Person or to
anyone else in whose hands the Rights nominally represented by such
Certificate shall be null and void either initially or in connection with a
request to register a transfer of Rights represented by a certificate
previously issued. Furthermore, neither the Company, the Rights Agent nor
anyone else shall be obligated to issue Rights Certificates to any person
making a tender offer which if consummated could render such person an
Acquiring Person or to any Affiliate or Associate of such person until and
unless the tender offer is withdrawn and the person shall have established
to the Company's reasonable satisfaction that such person does not intend
to become an Acquiring Person. The Company shall be entitled to require any
person claiming the right to receive a Rights Certificate to present such
evidence as the Company shall require in good faith to establish to the
Company's satisfaction that the Rights represented by that Certificate have
not become null and void under the provisions in Section 7(e) or that the
Company is not entitled to withhold such Certificate under the provisions
of the preceding sentence.
Section 4 Form of Rights Certificates. The Rights Certificates
(and the form of election to purchase shares and form of assignment to be
printed on the reverse thereof) shall be in substantially the form of
Exhibit B hereto and may have such marks of identification or designation
and such legends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the provisions of
this Agreement, or as may be required to comply with any 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 this Agreement, the
Rights Certificates, whenever issued, shall be dated as of the Distribution
Date, and on their face shall entitle the holders thereof to purchase such
number of shares of Preferred Stock as shall be set forth therein at the
Purchase Price set forth therein, but the number and kind of such
securities and the Purchase Price shall be subject to adjustment as
provided in this Agreement.
Section 5 Execution, Countersignature and Registration.
(a) Each Rights Certificate shall be executed on behalf of
the Company by the Company's Chief Executive Officer, President, Chief
Financial Officer, Treasurer or any Vice President, either manually or by
facsimile signature, and shall have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Company's Secretary or an
Assistant Secretary, either manually or by facsimile signature. Each
Rights Certificate shall be countersigned by the Rights Agent either
manually or, if permitted by the Company, by facsimile signature and shall
not be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed a Rights Certificate shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Rights Certificate nevertheless
may be countersigned by the Rights Agent and issued and delivered with the
same force and effect as though the Person who signed such Rights
Certificate 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 Agreement any such Person was
not such an officer.
(b) Following the Distribution Date, the Rights Agent shall
keep or cause to be kept, at its principal stock transfer office, 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 by each Rights
Certificate, and the certificate number and the date of issuance of each
Rights Certificate.
Section 6 Transfer, Division, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 3(c) and Section 14,
at any time after the Close of Business on the Distribution Date and at or
prior to the Close of Business on the earliest of the Redemption Date, the
Exchange Date and the Expiration Date, any Rights Certificate or Rights
Certificates may be transferred, divided, combined or exchanged for another
Rights Certificate or Rights Certificates, entitling the registered holder
to purchase a like number of shares of Preferred Stock (or following a
Triggering Event or a Business Combination, other securities, cash or other
property, as the case may be) as the Rights Certificate or Rights
Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, divide, combine or exchange any
Rights Certificate shall make such request in writing delivered to the
Rights Agent, and shall surrender the Rights Certificate or Rights
Certificates to be transferred, divided, combined or exchanged at the
principal corporate office of the Rights Agent. Thereupon the Rights Agent
shall countersign and deliver to the Person entitled thereto a Rights
Certificate or Rights Certificates, as the case may be, as so requested.
As a condition to such transfer, division, combination or exchange, the
Company may require payment by the surrendering holder of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection
therewith. 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 duly
completed and executed 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 such former or proposed Beneficial
Owner) thereof or such Beneficial Owner's Affiliates or Associates as the
Company shall reasonably request.
(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
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 owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7 Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) Each Right shall entitle (except as otherwise provided in
this Agreement) the registered holder thereof, upon the exercise thereof as
provided in this Agreement, to purchase, for the Purchase Price, at any
time after the Distribution Date and prior to the earliest of the
Expiration Date, the Exchange Date and the Redemption Date, one ten-
thousandth (1/10,000) of a share of Preferred Stock, subject to adjustment
from time to time as provided in Sections 11 and 13.
(b) The registered holder of any Rights Certificate may
exercise the Rights evidenced thereby (except as otherwise provided in this
Agreement) in whole or in part (except that no fraction of a Right may be
exercised) at any time after the Distribution Date and prior to the
earliest of the Expiration Date, the Exchange Date and the Redemption Date,
by surrendering the Rights Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at
the principal stock transfer office of the Rights Agent, together with
payment of the Exercise Amount for each Right exercised.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Exercise Amount for each Right exercised and
an amount equal to any applicable transfer tax required to be paid by the
surrendering holder pursuant to Section 9(d), the Rights Agent shall,
subject to the provisions of this Agreement, thereupon promptly
(i)(A) requisition from any transfer agent for the Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such shares)
certificates for the Preferred Stock (or other securities, as the case may
be) to be purchased (and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests), or (B) if the Company
shall have elected to deposit the total number of shares of Preferred Stock
(or other securities, as the case may be) issuable upon exercise of the
Rights with a depositary agent, requisition from the depositary agent
depositary receipts representing such Preferred Stock (or other securities,
as the case may be) as are to be purchased (in which case certificates for
the Preferred Stock (or other securities, as the case may be) represented
by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company shall direct the depositary agent to
comply with such request; (ii) after receipt of such certificates or
depositary receipts, 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 (iii) if appropriate,
requisition from the Company the amount of cash to be paid in lieu of
issuance of fractional shares in accordance with Section 14 of this
Agreement and, promptly after receipt thereof, cause the same to be
delivered 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 (including shares of Common Stock) of the Company, pay cash
and/or distribute other property pursuant to this Agreement, 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.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to the
registered holder of such Rights Certificate or to his duly authorized
assigns, subject to the provisions of Section 3(c) and Section 14.
(e) Notwithstanding anything in this Agreement to the
contrary, any Rights that are or were formerly beneficially owned on or
after the earlier of the Distribution Date and the Trigger Date by (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a direct or indirect transferee of an Acquiring Person (or of an
Associate or Affiliate of such Acquiring Person) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a direct or indirect
transferee of an Acquiring Person (or of an Associate or Affiliate of such
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 direct or indirect transfer (whether or not for consideration)
from the Acquiring Person (or from an Associate or Affiliate of such
Acquiring Person) to holders of equity interests in such Acquiring Person
(or to holders of equity interests in any Associate or Affiliate of such
Acquiring Person) or to any Person with whom the Acquiring Person (or an
Associate or Affiliate of such Acquiring Person) has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(B) a direct or indirect transfer which a majority of the Board of
Directors of the Company determines is part of a plan, arrangement or
understanding which has as a primary purpose or effect the avoidance of
this Section 7(e), shall, immediately upon the occurrence of a Triggering
Event and without any further action, be null and void and no holder of
such Rights shall have any rights whatsoever with respect to such Rights
whether under this Agreement or otherwise, provided, however, that, in the
case of transferees under clause (ii) or clause (iii) above, any Rights
beneficially owned by such transferee shall be null and void only if and to
the extent such Rights were formerly beneficially owned by a Person who
was, at the time such Person beneficially owned such Rights, or who later
became, an Acquiring Person or an Affiliate or Associate of such Acquiring
Person. The Company shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) are complied with, but shall have no
liability to any holder of a Rights Certificate or to any other Person as a
result of the Company's failure to make, or any delay in making (including
any such failure or delay by the Board of Directors of the Company) any
determinations with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to the registered holder of a Rights
Certificate upon the occurrence of any purported exercise as set forth in
this Section 7 unless such registered holder shall have (i) completed and
signed the certificate contained in the form of election to purchase set
forth on the reverse side of the Rights Certificate surrendered for such
exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former or proposed Beneficial Owner) thereof or the
Affiliates or Associates of such Beneficial Owner (or former or proposed
Beneficial Owner) as the Company shall reasonably request.
Section 8 Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer,
division, 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 the provisions of this 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.
Section 9 Reservation and Availability of Preferred Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available at all times out of its authorized and unissued
shares of Preferred Stock or its authorized and issued shares of Preferred
Stock held in its treasury (and, following the occurrence of a Triggering
Event or a Business Combination, out of its authorized and unissued shares
of Common Stock and/or other securities or out of its authorized and issued
shares of Common Stock and/or other securities held in its treasury) free
from preemptive rights or any right of first refusal, a sufficient number
of shares of Preferred Stock (and, following the occurrence of a Triggering
Event, shares of Common Stock and/or other securities) to permit the
exercise in full of all Rights from time to time outstanding.
(b) The Company further covenants and agrees, so long as the
Preferred Stock (and, following the occurrence of a Triggering Event or a
Business Combination, shares of Common Stock and/or other securities)
issuable upon the exercise of Rights may be listed on any United States
national securities exchange or quoted on any automated quotation system,
to use its best efforts to cause, from and after the time that the Rights
become exercisable, all such shares and/or other securities reserved for
such issuance to be listed on such exchange or quoted on such automated
quotation system upon official notice of issuance upon such exercise.
(c) The Company further covenants and agrees that it will
take all such action as may be necessary to ensure that all shares of
Preferred Stock (and, following the occurrence of a Triggering Event or a
Business Combination, shares of Common Stock and/or other securities)
delivered upon the exercise of Rights shall, at the time of delivery of the
certificates for such shares and/or such other securities (subject to
payment of the Purchase Price), be duly and validly authorized and issued,
fully paid, nonassessable, freely tradeable, not subject to liens or
encumbrances, and free of preemptive rights, rights of first refusal or any
other restrictions or limitations on the transfer or ownership thereof, of
any kind or nature whatsoever.
(d) The Company further covenants and agrees that it will pay
when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the original issuance or
delivery of the Rights Certificates or of any certificates for shares of
Preferred Stock (or Common Stock and/or other securities, as the case may
be) upon the exercise of Rights. The Company shall not, however, be
required to (i) pay any transfer tax which may be payable in respect of any
transfer involved in the issuance or delivery of any Rights Certificates or
the issuance or delivery of any certificates for shares of Preferred Stock
(or Common Stock and/or other securities as the case may be) to a Person
other than, or in a name other than that of, the registered holder of the
Rights Certificate evidencing Rights surrendered for exercise or
(ii) transfer or deliver any Rights Certificate or issue or deliver any
certificates for shares of Preferred Stock (or Common Stock and/or other
securities as the case may be) upon the exercise of any Rights until any
such tax shall have been paid (any such tax being payable by the holder of
such Rights Certificate at the time of surrender) or until it has been
established to the Company's satisfaction that no such tax is due.
(e) The Company shall (i) as soon as practicable following a
Triggering Event (or such earlier time following the Distribution Date as
may be required by law), prepare and file a registration statement on an
appropriate form under the Securities Act with respect to the securities
purchasable upon exercise of the Rights, (ii) cause such registration
statement to become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities Act)
until the earlier of (A) the date as of which Rights are no longer
exercisable for such securities and (B) the Expiration Date. The Company
shall also take such action as may be necessary or appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the various
states in connection with the exercise of the Rights. The Company may
temporarily suspend, for a period of time not to exceed 90 days after the
date of a Triggering Event, the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall make 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.
Section 10 Preferred Stock Record Date. Each Person in whose name
any certificate for shares of Preferred Stock (or Common Stock and/or other
securities, as the case may be) is issued upon the exercise of Rights shall
for all purposes be deemed to have become the holder of record of the
Preferred Stock (or Common Stock and/or other securities, as the case may
be) 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 Preferred Stock (or Common Stock and/or
other securities, as the case may be) transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of
such shares (and/or such other securities, as the case may be) on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Company are open.
Section 11 Adjustments to Purchase Price, Number of Shares or
Number of Rights. The Purchase Price, the number and kind of securities,
cash and other property obtainable upon exercise of each Right and the
number of Rights outstanding shall be subject to adjustment from time to
time as provided in this Section 11.
(a) Adjustments Prior to Trigger Date:
(1) In the event the Company shall at any time after the
date of this Agreement and prior to the Trigger Date (i) pay
a dividend or make a distribution on the Common Stock
payable in shares of Common Stock, (ii) subdivide (by a
stock split or otherwise) the outstanding Common Stock into
a larger number of shares, (iii) combine (by a reverse stock
split or otherwise) the outstanding Common Stock into a
smaller number of shares (and any of the actions described
in clauses (i), (ii) or (iii) are herein called a "stock
split") then:
(A) The number of Rights outstanding shall be
adjusted so that after giving effect to such stock
split the number of Rights outstanding shall be exactly
equal to the number of shares of Common Stock
outstanding (and so that prior to the Distribution Date
one Right shall be associated with every share of
Common Stock outstanding after such stock split);
(B) The Exercise Amount shall be adjusted by
multiplying the Exercise Amount in effect immediately
prior to such stock split by a fraction, the numerator
of which shall be the number of shares of Common Stock
outstanding immediately prior to such stock split and
the denominator of which shall be the number of shares
of Common Stock outstanding immediately after such
stock split;
(C) The Purchase Price for each one ten-thousandth
of a share of Preferred Stock shall not change; and
(D) The fraction of a share of Preferred Stock
purchasable with each Right immediately after such
stock split shall be equal to the product derived by
multiplying the fraction of a share of Preferred Stock
purchasable with each Right immediately prior to such
stock split times the fraction cited in clause (B)
above.
The following example illustrates the intended operation of
the preceding provisions. Assume that initially, each Right
would (when and if it became exercisable) entitle its holder
to purchase one ten-thousandth of a share of Preferred Stock
for $200 (and accordingly the initial Exercise Amount and
the initial Purchase Price per one ten-thousandth of a share
of Preferred Stock are each $200). Assume further that
prior to the Distribution Date, the Company splits its
Common Stock two for one (thereby doubling the number of
shares of Common Stock outstanding). The intended operation
of the preceding adjustment provisions is that: (i) the
number of Rights outstanding would also double; (ii) one
Right would be associated with each share of Common Stock
outstanding after the stock split; (iii) each Right would
have an Exercise Amount equal to $100; (iv) each Right will
entitle its holder (when and if the Right becomes
exercisable) to purchase one twenty-thousandth of one share
of Preferred Stock; and (v) the Purchase Price for each one
ten-thousandth of a share of Preferred Stock would remain
$200 so that the price for each one twenty-thousandth of a
share of Preferred Stock purchasable with each Right would
be $100.
(2) Adjustment in Rights Certificates: In the event the
Distribution Date shall occur and the Company shall issue
separate certificates to represent the Rights, the following
provisions shall thereafter apply:
(A) In the event the number of Rights outstanding
are increased pursuant to Section 11(a)(1), the Company
shall as promptly as reasonably possible distribute to
the record holders of the Rights on the record date for
the stock split giving rise to the increase in the
number of Rights certificates representing the
additional Rights issuable by reason of such stock
split.
(B) In the event the number of Rights outstanding
are reduced pursuant to Section 11(a) by reason of the
occurrence of a reverse stock split or its functional
equivalent, then each Rights certificate outstanding
prior to such reverse stock split shall thereafter
represent the reduced number of Rights into which the
Rights represented by such certificate immediately
prior to such reverse stock split shall have been
converted by reason of the occurrence of that reverse
stock split.
(b) Basic Triggering Event Adjustments: Upon the first
occurrence of a Triggering Event (except as otherwise provided in this
Agreement), each Right shall be changed so that immediately after the
Triggering Event:
(1) it shall no longer be exercisable for Preferred
Stock but rather shall be exercisable for Common Stock
(subject to adjustment as provided in Section 11(c));
(2) the number of shares of Common Stock which may be
acquired (upon exercise of each Right and payment of the
Exercise Amount) shall be equal to the result obtained by
dividing (x) 50% of the Current Market Price per share of
Common Stock on the date of the occurrence of the Triggering
Event into (y) the Exercise Amount in effect immediately
prior to the Triggering Event; and
(3) the Purchase Price per Common Share purchasable with
each Right shall be equal to 50% of the Current Market Price
per share of Common Stock on the date of the occurrence of
the Triggering Event.
(c) Other Post Triggering Event Adjustments.
(1) Use of Common Equivalent Shares or Cash: In the
event that the number of shares of Common Stock which are
authorized by the Company's certificate of incorporation,
but which are not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights ("Available
Common Stock") is not sufficient to permit the exercise in
full of the Rights after the adjustment made in accordance
with Section 11(b), then:
(A) First, the Available Common Stock shall be
allocated among all of the then-outstanding and
exercisable Rights so that each Right shall entitle its
holder to receive (upon exercise of the Right and
payment of the Exercise Amount) the same amount of
Available Common Stock and (ii) second, the Board of
Directors of the Company shall promptly take
appropriate action to declare that each Right shall
additionally entitle its holder to receive (x) a number
of Common Equivalent Shares equal to the remainder
derived by subtracting the number of shares of
Available Common Stock allocated to each Right in the
preceding clause (i) from the total number of shares of
Common Stock which would have been purchasable with
such Right if the Corporation had a sufficient number
of shares of Common Stock to permit the Right to be
exercisable entirely for Common Stock (such remainder
being referred to herein as the "Unallocated Shares"),
(y) cash in an amount equal to the Current Value of the
Unallocated Shares, or (z) any combination of the
foregoing determined by the Board of Directors of the
Company so long as each Right entitles its holder to
receive the same kind and amount of Common Equivalent
Shares and the same amount of cash as the holder of
each other Right. For purposes of the preceding
sentence, the "Current Value" of a particular number of
Unallocated Shares shall be equal to the product
derived by multiplying that particular number times the
greater of (i) the Current Market Price (calculated as
prescribed in Section 1) for the Common Stock on the
day on which the Board of Directors determines to make
a substitution of cash for such Unallocated Shares (the
"Substitution Date") or (ii) the closing price per
share (calculated as prescribed in Section 1) for the
Common Stock on the Trading Day immediately prior to
the Substitution Date.
(B) For purposes of this Agreement, a "Common
Equivalent Share" shall be a share or fraction of a
share of preferred stock (including, but not limited
to, Preferred Stock), as follows: (i) with respect to
Preferred Stock, a Common Equivalent Share shall be the
fraction of a share of Preferred Stock equal to the
reciprocal of the Adjustment Number in effect at the
time the term shall be applied and/or the unit of
Preferred Stock issued and (ii) with respect to
preferred stock other than Preferred Stock, a Common
Equivalent Share shall be a share or fraction of a
share of such preferred stock that the Board of
Directors of the Company deems to represent
substantially the same proportionate interest in the
Company as a Common Equivalent Share represented by
such fraction of a share of Preferred Stock and to have
a dividend rate and other characteristics as similar as
possible to such fraction of a share of Preferred
Stock. The term "Common Share" whenever it is used in
this Agreement means both a share of Common Stock and a
Common Equivalent Share.
(C) If circumstances after the initial Trigger Date
require the use of Common Equivalent Shares, the
Company shall use its best efforts to obtain
authorization to issue (i) a sufficient quantity of
Common Stock to permit Common Stock to be issued upon
exercise of the Rights and/or any exercise of the
exchange right under the following Section and (ii) a
sufficient quantity of Common Equivalent Shares as may
be necessary or appropriate to permit Common Equivalent
Shares to be issued upon exercise of the Rights and/or
any exercise of the exchange right under the following
Section. Each time the Company's authorized Common
Stock shall be increased, the adjustment required under
the preceding paragraphs shall be redone to maximize
the amount of Common Stock issuable upon exercise of
the Rights. To the extent excess authorized Common
Stock remains after the readjustment required by the
preceding sentence, the holder of any outstanding
Common Equivalent Share shall have the right at any
time to require the Company to exchange that share for
a share of Common Stock.
(D) In no event, however, shall the Company be
obligated to reserve any Common Stock for issuance
under the Rights until and unless a Triggering Event
actually occurs.
(E) In no event shall the Company issue any
Preferred Stock except for issuances caused by exercise
of the Rights and except for issuances required by this
Section 11(c)(1), Section 11(c)(2) or Section 11(d)(6).
(2) Exchange Option:
(A) At any time after the occurrence of a
Triggering Event and prior to (i) the time any Person
(other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Stock
then outstanding and (ii) the occurrence of a Business
Combination, the Board of Directors of the Company may,
at its option, cause the Company to exchange for all or
part of the then-outstanding and exercisable Rights,
Common Shares at an exchange ratio of one Common Share
per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring
after the date of this Agreement (such exchange ratio
being referred to herein as the "Exchange Ratio"). Any
partial exchange shall be effected on a pro rata basis
based on the number of Rights (other than Rights which
have become void pursuant to the provisions of Section
7(e) hereof) held by each holder of Rights.
(B) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any
particular Rights pursuant to this Section 11(c)(3) and
without any further action and without any notice, the
right to exercise those particular Rights shall
terminate and the only right a holder shall have
thereafter with respect to any of those particular
Rights shall be to receive the number of Common Shares
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 and in
addition, the Company shall promptly mail a notice of
any such exchange to all of the holders of such Rights
in accordance with Section 25 of this Agreement;
provided, however, that the failure to give, any delay
in giving or any defect in, such notice shall not
affect the validity of such exchange. Each such notice
of exchange will state the method by which the exchange
of the Common Shares for Rights will be effected and,
in the event of any partial exchange, the number of
Rights which will be exchanged. The Company shall not
be required to issue fractions of Common Shares or to
distribute certificates which evidence fractional
Common Shares. In lieu of such fractional Common
Shares, the Company shall pay to the registered holders
of the Rights Certificates with regard to which such
fractional Common Shares would otherwise be issuable an
amount in cash equal to the product derived by
multiplying (x) the subject fraction, by (y) the last
sale price of the Common Shares on the fifth Trading
Day following the public announcement of the exchange
by the Company, or, in case no such sale takes place on
such day, the average of the closing bid and asked
prices on such day, in either case on a when issued
basis (taking into account the exchange), as reported
in the principal consolidated transaction reporting
system with respect to securities listed or admitted to
trading on the NYSE (or, if the Common Shares are not
so listed or traded, then as determined in the manner
provided under the definition of "Current Market
Price," adjusted to take into account the exchange).
In determining whether any particular holder shall be
obligated to receive cash in lieu of a fractional
share, the holder shall be entitled to have all Rights
beneficially owned by such holder aggregated so that
only one fractional share shall be attributable to all
the Rights so beneficially owned.
(d) Antidilution Adjustments After the Trigger Date:
(1) In the event the Company shall at any time after the
Trigger Date effect any stock split with respect to its
Common Stock, then the Purchase Price to be in effect after
such stock split shall be determined by multiplying the
Purchase Price in effect immediately prior to such action by
a fraction, the numerator of which shall be the number of
Common Shares outstanding immediately prior to such stock
split and the denominator of which shall be the number of
Common Shares outstanding immediately after such stock
split.
(2) In case the Company shall at any time after the
Trigger Date fix a record date for the making of a
distribution to holders of Common Stock (including any such
distribution made in connection with a reclassification of
the Common Stock or a consolidation or merger in which the
Company is the surviving corporation) of securities (other
than Common Stock and rights, options or warrants referred
to in Section 11(d)(3)), cash (other than a regular periodic
cash dividend at an annual rate not in excess of (x) 125% of
the annual rate of the regular cash dividend paid on the
Common Stock during the immediately preceding fiscal year or
(y) in the event that a regular cash dividend was not paid
on the Common Stock during such preceding fiscal year, 5% of
the Current Market Price of the Common Stock on the date
such regular cash dividend was first declared), property,
evidences of indebtedness or assets, the Purchase Price to
be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which
shall be the Current Market Price per share of Common Stock
on such record date, less the fair market value (as
determined in good faith by a majority of the Board of
Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent) of
such securities, cash, property, evidences of indebtedness
or assets to be so distributed in respect of one share of
Common Stock, and the denominator of which shall be such
Current Market Price per share of Common Stock on such
record date. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that
such distribution is not made following such adjustment, the
Purchase Price shall be readjusted to be the Purchase Price
which would have been in effect if such record date had not
been fixed.
(3) If the Company shall at any time after the Trigger
Date fix a record date for the issuance of rights, options
or warrants to holders of Common Shares entitling them to
subscribe for or purchase Common Shares (or securities
convertible into Common Shares) at a price per Common Share
(or, in the case of a convertible security, having a
conversion price per Common Share) less than the Current
Market Price per share of Common Stock on such record date
and requiring that the conversion or purchase right be
exercised within 45 calendar days after 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 Shares outstanding on such record date, plus the
number of Common Shares which the aggregate exercise and/or
conversion price for the total number of Common Shares which
are obtainable upon exercise and/or conversion of such
rights, options, warrants or convertible securities would
purchase at such Current Market Price, and the denominator
of which shall be the number of shares of Common Shares
outstanding on such record date, plus the number of
additional Common Shares which may be obtained upon exercise
and/or conversion of such rights, options, warrants or
convertible securities. In case such subscription price may
be paid in a consideration part or all of which shall be in
a form other than cash, the value of such consideration
shall be as determined in good faith by a majority of the
Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent. Common Shares 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
issued following such adjustment, the Purchase Price shall
be readjusted to be the Purchase Price which would have been
in effect if such record date had not been fixed.
(4) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to
be advisable in order that any combination or subdivision of
the Common Stock, issuance wholly for cash of any Common
Stock at less than the Current Market Price, issuance wholly
for cash of Common Stock or securities which by their terms
are convertible into or exchangeable or exercisable for
Common Shares, stock dividends or issuance of rights,
options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Common
Shares, shall not be taxable to such stockholders.
(5) After each adjustment of the Purchase Price pursuant
to any of subsections (1) - (4) immediately above, the
number of Common Shares purchasable with each Right shall be
adjusted to the quotient derived by dividing the Purchase
Price as constituted after giving effect to such adjustment
into the Exercise Amount.
(6) The Company shall not take any of the actions
described in any of subsections (1) - (3) above at a time
when any Common Equivalent Shares are outstanding unless the
Company shall take substantively identical actions with
respect to the outstanding Common Stock and outstanding
Common Equivalent Shares. Conversely, the Company shall not
take any actions with respect to outstanding Common
Equivalent Shares analogous to those described in any of
subsections (1) - (3) above unless the Company shall take
substantively identical actions with respect to the
outstanding Common Stock and outstanding Common Equivalent
Shares.
(e) Recapitalizations.
(1) In the event that after the Trigger Date, the
Company shall issue any securities in a reclassification of
the Common Stock or in any other recapitalization (including
any such reclassification in connection with a consolidation
or merger in which the Company is the surviving
corporation), then in each such event:
(A) the property purchasable with each Right shall
be adjusted to be whatever the owner of that Right
would have owned by reason of both (i) the exercise of
that Right immediately prior to such recapitalization
or reclassification and (ii) the effect of that
recapitalization or reclassification on the property
assumed to have been received in such exercise.
(B) The Exercise Amount shall be allocated among
the shares of stock and/or other units of property for
which the Right shall be exercisable after giving
effect to the adjustment cited in clause (A) based on
the fair market value of such property to determine the
Purchase Price for each such share and/or unit.
(2) To illustrate the intended operation of this
provision, assume that: (i) immediately prior to a
reclassification, each Right were exercisable for 10 Common
Shares and the Exercise Amount were $200 (resulting in a
purchase price of $20 per Common Share); (ii) as a result of
the Reclassification, each outstanding Common Share is
reclassified into two New Common Shares and one Series C
Share; and (iii) immediately after the reclassification, the
market value of each New Common Share was $15 and the market
value of each Series C share was $10. Immediately after the
assumed reclassification, each Right would be exercisable
for 20 New Common Shares at a purchase price of $7.50 per
share and ten Series C Shares at a purchase price of $5 per
share.
(f) In the event a Triggering Event shall occur, or in the
event there shall be a recapitalization or reclassification pursuant to
Section 11(e), or in the event there shall be any merger or other action
which shall cause a change in the property purchasable with the Rights
under Section 13, or in the event there shall be any other occurrence or
development which shall cause the property purchasable with the Rights to
consist in whole or in part of anything other than Preferred Stock, then
and in any such event:
(1) The certificates representing the Rights shall
automatically be deemed to represent the adjusted terms of
the Rights without the need to replace such certificates.
The Company shall thereafter make arrangements for the
production of certificates representing the revised terms of
the Rights resulting from such adjustment and shall use such
certificates to represent Rights for which new certificates
shall be issuable by reason of a transfer of record
ownership or by reason of a request by the existing record
owner for a replacement certificate representing the revised
terms of the Rights.
(2) The principles underlying the adjustment provisions
in this Section 11 and elsewhere in this Agreement shall be
applied to fairly and proportionately adjust the shares or
other property purchasable with the Rights and the purchase
price for each share or other property unit purchasable with
the Rights after giving effect to the adjustments required
by reason of such event to reflect any subsequent capital
changes or other events. Without limiting by implication
the generality of the preceding sentence, the provisions of
Sections 7, 9, 10, 12, 13, 14 and 24 of this Agreement which
related to the Preferred Stock shall after the occurrence of
any such event apply in a substantively identical manner to
the shares or other property purchasable with the Rights
after giving effect to such event.
(g) Before taking any action that would cause an adjustment
reducing the Purchase Price per share at which shares are purchasable with
the Rights below the par value of those shares, 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 at such adjusted Purchase Price.
(h) In any case in which this Section 11 shall require that
an adjustment be made effective as of a record date for a specified event,
the Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record date the
shares of Common Stock and other securities, cash or property of the
Company, if any, issuable upon such exercise over and above the shares of
Common Stock and other securities, cash or property 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 (fractional or otherwise)
or other securities, cash or property upon the occurrence of the event
requiring such adjustment.
(i) The Company covenants and agrees that on and after the
Trigger Date neither it nor any combination of it and its subsidiaries
shall (i) consolidate with any other Person, or (ii) merge with or into
any other Person or (iii) directly or indirectly sell, lease, or otherwise
transfer or dispose of (in one transaction or a series of related
transactions) assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries taken as a
whole to any other Person if (A) at the time of or immediately after such
consolidation, merger, sale, lease, transfer, or disposition there are any
rights, warrants, securities or other instruments outstanding or agreements
in effect which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights, (B) prior to,
simultaneously with or immediately after such consolidation, merger, sale,
lease, transfer, or disposition the stockholders (or equity holders) of the
Person who constitutes, or would constitute, the Principal Party in such
transaction shall have received a distribution of Rights previously owned
by such Person or any of its Affiliates or Associates or (C) the form or
nature of organization of the Principal Party would preclude or limit the
exercisability of the Rights. The Company shall not consummate any such
consolidation, merger, sale, lease, transfer, or disposition unless prior
thereto the Company and such other Person shall have executed and delivered
to the Rights Agent a supplemental agreement evidencing compliance with
this Section 11(i).
(j) The Company covenants and agrees that, after the Trigger
Date it will not, except as permitted by Section 11(c)(3) of this
Agreement, take (or permit any Subsidiary to take) any action if at the
time such action is taken it is reasonably foreseeable that such action
will, directly or indirectly, diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
Section 12 Certification of Adjustments. Whenever an adjustment
is made as provided in Sections 11 and 13, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief statement
of the facts accounting for such adjustment, (b) promptly file with the
Rights Agent and with each transfer agent for the stock then purchasable
with the Rights a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Rights Certificate (or, if no Rights
Certificates have been issued, to each holder of a certificate representing
shares of Common Stock) in accordance with Section 25. Notwithstanding the
foregoing sentence, the failure of the Company to give such notice shall
not affect the validity of or the force or effect of or the requirement for
such adjustment. Any adjustment to be made pursuant to Sections 11 and 13
of this Agreement shall be effective as of the date of the event giving
rise to such adjustment. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained and
shall not be obligated or responsible for calculating any adjustment nor
shall it be deemed to have knowledge of such adjustment unless and until it
shall have received such certificate.
Section 13 Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
(a) A "Business Combination" shall be deemed to occur in the
event that, in or following a Triggering Event, (i) the Company shall,
directly or indirectly, 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(i) and Section 11(j) of this Agreement) in a
transaction in which the Company is not the continuing, resulting or
surviving corporation of such merger or consolidation, (ii) any Person
(other than a Subsidiary of the Company in a transaction that complies with
Section 11(i) and Section 11(j) of this Agreement) shall, directly or
indirectly, consolidate with the Company, or shall merge with and into the
Company, in a transaction in which the Company is the continuing, resulting
or surviving corporation of such merger or consolidation and, in connection
with such merger or consolidation, all or part of the Common Stock shall be
changed (including, without limitation, any conversion into or exchange for
securities of the Company or of any other Person, cash or any other
property), (iii) the Company shall, directly or indirectly, effect a share
exchange in which all or part of the Common Stock shall be changed
(including, without limitation, any conversion into or exchange for
securities of any other Person, cash or any other property) or (iv) the
Company shall, directly or indirectly, sell, lease, exchange, mortgage,
pledge or otherwise transfer or dispose of (or one or more of its
Subsidiaries shall directly or indirectly sell, lease, exchange, mortgage,
pledge or otherwise transfer or dispose of), in one transaction or a series
of related transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its Subsidiaries (taken
as a whole) to any other Person (other than the Company or any of its
Subsidiaries in one or more transactions each and all of which comply with
Section 11(i) and Section 11(j) of this Agreement).
In the event of a Business Combination, proper provision
shall be made so that each holder of a Right (except as otherwise provided
in this Agreement) shall thereafter have the right to receive, upon the
exercise of each Right, such number of shares of Common Stock of the
Principal Party as shall be equal to the result obtained by dividing the
Exercise Amount in effect prior to the Business Combination by 50% of the
Current Market Price per share of the Common Stock of such Principal Party
immediately prior to the consummation of such Business Combination. All
shares of Common Stock of any Person for which any Right may be exercised
after consummation of a Business Combination as provided in this
Section 13(a) shall, when issued upon exercise thereof in accordance with
this Agreement, be duly and validly authorized and issued, fully paid,
nonassessable, freely tradeable, not subject to liens or encumbrances, and
free of preemptive rights, rights of first refusal or any other
restrictions or limitations on the transfer or ownership thereof of any
kind or nature whatsoever. The Purchase Price per share for such Common
Stock immediately after such Business Combination shall be equal to 50% of
the Current Market Price per share of the Common Stock of such Principal
Party immediately prior to the consummation of such Business Combination.
(b) After consummation of any Business Combination, (i) the
Principal Party shall be liable for, and shall assume, by virtue of such
Business Combination and without the necessity of any further act, all the
obligations and duties of the Company pursuant to this Agreement, (ii) the
term "Company" as used in this Agreement shall thereafter be deemed to
refer to such Principal Party and (iii) such Principal Party shall take all
steps (including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock in accordance with Section 9) in
connection with such Business Combination as necessary to ensure that the
provisions of this Agreement shall thereafter be applicable, as nearly as
reasonably may be, in relation to the shares of its Common Stock thereafter
deliverable upon the exercise of the Rights.
(c) The Company shall not consummate any Business Combination
unless prior thereto (i) the Principal Party shall have a sufficient number
of authorized shares of its Common Stock which have not been issued or
reserved for issuance (other than shares reserved for issuance pursuant to
this Agreement to the holders of Rights) to permit the exercise in full of
the Rights in accordance with this Section 13, (ii) the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the fulfillment of the Principal
Party's obligations and the terms as set forth in paragraphs (a) and (b) of
this Section 13 and further providing that, as soon as practicable on or
after the date of such Business Combination, the Principal Party, at its
own expense, shall (A) prepare and file, if necessary, a registration
statement on an appropriate form under the Securities Act with respect to
the Rights and the securities purchasable upon exercise of the Rights,
(B) use its best efforts to cause such registration statement to become
effective as soon as practicable after such filing and remain effective
(with a prospectus at all times meeting the requirements of the Securities
Act) until the Expiration Date, (C) deliver to holders of the Rights
historical financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 (or any successor form) under the Exchange Act,
(D) use its best efforts to qualify or register the Rights and the
securities purchasable upon exercise of the Rights under the state
securities or "blue sky" laws of such jurisdictions as may be necessary or
appropriate, (E) use its best efforts to list the Rights and the securities
purchasable upon exercise of the Rights on a United States national
securities exchange and (F) obtain waivers of any rights of first refusal
or preemptive rights in respect of the Common Stock of the Principal Party
subject to purchase upon exercise of outstanding Rights, (iii) the Company
and the Principal Party shall have furnished to the Rights Agent an opinion
of independent counsel stating that such supplemental agreement is a legal,
valid and binding agreement of the Principal Party enforceable against the
Principal Party in accordance with its terms, and (iv) the Company and the
Principal Party shall have filed with the Rights Agent a certificate of a
nationally recognized firm of independent accountants setting forth the
number of shares of Common Stock of such issuer which may be purchased upon
the exercise of each Right after the consummation of such Business
Combination.
(d) The provisions of this Section 13 shall similarly apply
to successive Business Combinations. In the event a Business Combination
shall be consummated at any time after the occurrence of a Triggering
Event, the Rights which have not theretofore been exercised shall
thereafter be exercisable for the consideration and in the manner described
in Section 13(a). The provisions of Section 11(b) of this Agreement shall
be applicable to events which occur after a Business Combination.
(e) Notwithstanding any other provision of this Agreement, no
adjustment to the number or kind of shares (or fractions of a share), cash
or other property for which a Right is exercisable or the number of Rights
outstanding or associated with each share of Common Stock or any similar or
other adjustment shall be made or be effective if such adjustment would
have the effect of reducing or limiting the benefits the holders of the
Rights would have had absent such adjustment, including, without
limitation, the benefits under Sections 11 and 13, unless the terms of this
Agreement are amended so as to preserve such benefits, provided that this
paragraph shall not prevent any change prior to the Trigger Date permitted
by Section 26(a) and provided that this Section 13(e) shall not be deemed
to limit or impair the right to engage in an exchange pursuant to Section
11(c)(2).
(f) The Company covenants and agrees that it shall not effect
any Business Combination if at the time of, or immediately after such
Business Combination, there are any rights, options, warrants or other
instruments outstanding which would diminish or otherwise eliminate the
benefits intended to be afforded by the Rights.
(g) Without limiting the generality of this Section 13, in
the event the nature of the organization of any Principal Party shall
preclude or limit the acquisition of Common Stock of such Principal Party
upon exercise of the Rights as required by Section 13(a) as a result of a
Business Combination, it shall be a condition to such Business Combination
that such Principal Party shall take such steps (including, but not limited
to, a reorganization) as may be necessary to ensure that the benefits
intended to be derived under this Section 13 upon the exercise of the
Rights are assured to the holders thereof.
Section 14 Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractional
Rights or to distribute Rights Certificates which evidence fractional
Rights.
(b) The Company shall permit the issuance and trading of
Preferred Stock in fractional shares such that the smallest fractional
share tradeable at any particular time shall equal the reciprocal of the
Adjustment Number in effect at that particular time. The Company shall not
be required to issue fractions of shares of Preferred Stock (other than
fractions which are integral multiples of the reciprocal of the Adjustment
Number) upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Preferred Stock (other than fractions which
are integral multiples of the reciprocal of the Adjustment Number).
Fractions of shares of Preferred Stock may, at the election of the Company,
be evidenced by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it, provided that such
agreement shall provide that the holders of such depositary receipts shall
have all the rights, privileges and preferences to which they are entitled
as beneficial owners of the Preferred Stock. In lieu of fractional shares
of Preferred Stock that are not integral multiples of the reciprocal of the
Adjustment Number, the Company may at its option (i) issue scrip or
warrants in registered form (either represented by a certificate or
uncertificated) or in bearer form (represented by a certificate) which
shall entitle the holder to receive the reciprocal of the Adjustment Number
of one share of Preferred Stock upon the surrender of such scrip or
warrants aggregating the reciprocal of the Adjustment Number of one share
of Preferred Stock, or (ii) pay to the registered holders of Rights
Certificates at the time such Rights Certificates are exercised as provided
in this Agreement an amount in cash equal to the same fraction of the
relevant closing price of a share of Preferred Stock. For purposes of this
Section 14(b), the relevant closing price of a share of Preferred Stock
shall be the closing price of a share of Preferred Stock (as determined
pursuant to the second sentence of the definition of "Current Market Price"
in Section 1) for the Trading Day immediately prior to the date of such
exercise.
(c) The Company shall not be required to issue fractions of
shares of Common Stock or Common Equivalent Shares or to distribute
certificates which evidence fractional shares of Common Stock. In lieu of
such fractional shares of Common Stock, the Company shall pay 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 product derived by multiplying (x) the subject fraction,
by (y) the closing price of a share of Common Stock (as determined pursuant
to the second sentence of the definition of "Current Market Price" in
Section 1) for the Trading Day immediately prior to the date of such
exercise.
(d) The holder of a Right by his acceptance thereof expressly
waives any right to receive any fractional Rights or any fractional shares
upon exercise of a Right (except as otherwise provided in this Agreement).
Section 15 Rights of Action. Except as otherwise provided, all
rights of action in respect of this Agreement are vested in the respective
registered holders of the Rights Certificates (and, prior to the
Distribution Date, any registered holders of associated Common Stock); and
any registered holder of any Rights Certificate (or, prior to the
Distribution Date, any share of associated Common Stock), without the
consent of the Rights Agent or of the holder of any other Right, 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 rights pursuant to this Agreement.
Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would
not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Section 16 Agreement of Rights Holders Concerning Transfer and
Ownership of Rights. Every holder of a Right by accepting the same
consents and agrees with the Company and the Rights Agent and with every
other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates will
be transferable on the registry books of the Rights Agent only if
surrendered at the principal stock transfer office of the Rights Agent,
duly endorsed or accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the
Person in whose name a Rights Certificate (or, prior to the Distribution
Date, the associated Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Rights Certificate or the
associated Common Stock certificate made by anyone other than the Company,
the transfer agent for the stock purchasable with such Right or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights
Agent shall be affected by any notice to the contrary.
Section 17 Rights Holder Not Deemed a Stockholder. No holder, as
such, of any Rights Certificate shall be entitled to vote or to receive
dividends or distributions or shall be deemed for any purpose the holder of
Preferred Stock or any other securities, cash or other property which may
at any time be issuable on the exercise of the Rights represented thereby,
nor shall anything contained in this Agreement 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, including, without
limitation, any right (i) to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, (ii) to give or
withhold consent to any corporate action, (iii) to receive notice of
meetings or other actions affecting stockholders (except as provided in
Section 24), (iv) to receive dividends, distributions or subscription
rights, (v) to institute, as a holder of Preferred Stock or other
securities issuable on exercise of the Rights represented by any Rights
Certificate, any derivative action on behalf of the Company, or otherwise,
until and only to the extent that the Right or Rights evidenced by such
Rights Certificate shall have been exercised in accordance with the
provisions of this Agreement.
Section 18 Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements incurred in
the administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss, liability
or expense, incurred without negligence, bad faith, willful misconduct or
breach of this Agreement on the part of the Rights Agent, for anything done
or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises. The costs and
expenses of enforcing this right of indemnification shall also be paid by
the Company. The indemnification provided for hereunder shall survive the
expiration of the Rights and the termination of this Agreement.
The Rights Agent may conclusively rely upon and shall be
protected and shall incur no liability for or in respect of any action
taken, suffered or omitted by it in connection with its administration of
this Agreement in reliance upon any Rights Certificate or certificate for
Preferred Stock or 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 reasonably believed by it to be genuine and to be
signed, executed and, when necessary, verified or acknowledged, by the
proper Person or Persons.
Notwithstanding anything in this Agreement to the contrary, in no
event shall the Rights Agent be liable for special, indirect or
consequential loss or damage of any kind whatsoever (including but not
limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage and regardless of the form of the action.
Section 19 Merger or Consolidation or Change of Name of Rights
Agent. Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights
Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any document
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. In case at the time such
successor Rights Agent shall succeed to the agency created by this
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
Certificate 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 Certificate 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 shall have the full force
provided in the Rights Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed
and at such time any of the 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 any of the Rights 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 Agreement.
Section 20 Duties of Rights Agent. The Rights Agent undertakes
the duties and obligations imposed by this Agreement (and no implied duties
or obligations shall be read into this Agreement against the Rights Agent)
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:
(a) Before the Rights Agent acts or refrains from acting, the
Rights Agent may consult with legal counsel (who may be legal counsel for
the Company), and the opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken or
omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including, without limitation, the identity of any
Acquiring Person or any Affiliate or Associate of an Acquiring Person or
the determination of Current 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 specifically prescribed
in this Agreement) may be deemed to be conclusively proved and established
by a certificate signed by the Chairman, the Chief Executive Officer, the
President, the Chief Financial Officer, the General Counsel, the Treasurer,
any Vice President or the Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to the
Rights Agent for any action taken or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for the
negligence, bad faith, willful misconduct or breach of this Agreement by it
or its attorneys or agent.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in
the Rights Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery of
this Agreement (except the due execution and delivery of this Agreement 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 Agreement or in any Rights Certificate; nor shall it be
responsible for any change or adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in
Sections 3, 11, 13 or 23 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 of
any 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 shares of Preferred Stock, Common Stock or other
securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any shares of Preferred Stock, Common Stock or
other securities will, when issued, be validly authorized and issued, fully
paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and assurances
as may reasonably be required by the Rights Agent for the carrying out or
performance by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder
from the Chairman, the Chief Executive Officer, the President, the Chief
Financial Officer, the General Counsel, the Treasurer, any Vice President
or the Secretary of the Company, and to apply to such officers for advice
or instructions in connection with its duties, and it shall not be liable
for any action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer. Any application by the
Rights Agent for written instructions from the Company may, at the option
of the Rights Agent, set forth in writing any action proposed to be taken
or omitted by the Rights Agent under this Agreement and the date on or
after which such action shall be taken of such omission shall be effective.
The Rights Agent shall not be liable for any action taken by, or omission
of, the Rights Agent in accordance with a proposal included in any such
application on or after the date specified in such application (which date
shall not be less than ten Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to taking any
such action (or the effective date in the case of an omission), the Rights
Agent shall have received written instructions in response to such
application subject to the proposed action or omission and/or specifying
the action to be taken or omitted.
(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
the Rights Agent were not serving as such under this Agreement. Nothing in
this Agreement shall preclude the Rights Agent from acting in any other
capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents.
(j) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be, has
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 or transfer without first consulting
with the Company.
(k) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk
or liability is not reasonably assured to it.
(l) The Rights Agent shall not be required to take notice or
be deemed to have notice of any fact, event or determination (including,
without limitation, any dates or events defined in this Agreement or the
designation of any Person as an Acquiring Person, Affiliate or Associate)
under this Agreement unless and until the Rights Agent shall be
specifically notified in writing by the Company of such fact, event or
determination.
Section 21 Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon notice of 30 days in writing mailed to the Company and
to each transfer agent of the Common Stock or Preferred Stock by registered
or certified mail and, at the expense of the Company, to the holders of the
Rights Certificates by either (i) first-class mail or (ii) by disclosure in
a periodic report of the Company required to be filed under the Exchange
Act, any permitted report under the Exchange Act, a press release of the
Company or in any proxy or other communication of the Company with its
stockholders. The Company may remove the Rights Agent or any successor
Rights Agent upon notice of 30 days 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 or Preferred Stock by registered or certified mail, and
to the holders of the Rights Certificates by either (i) first-class mail or
(ii) by disclosure in a periodic report of the Company required to be filed
under the Exchange Act, any permitted report under the Exchange Act, a
press release of the Company or in any proxy or other communication of the
Company with its stockholders. 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. Notwithstanding any other
provision of this Agreement, in no event shall the resignation or removal
of a Rights Agent be effective until a successor Rights Agent shall have
been appointed and have accepted such appointment. If the Company shall
fail to make such appointment within a period of 30 days after such removal
or after it has been notified in writing of such resignation or incapacity
by the resigning or incapacitated Rights Agent or by any holder of a Rights
Certificate (who shall, with such notice, submit his Rights Certificate for
inspection by the Company), then the incumbent Rights Agent or the
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 (i) a corporation organized and doing business under the
laws of the United States or of the State of New York (or of any other
state of the United States so long as such corporation is authorized to
conduct a banking, corporate trust or stock transfer business in the State
of New York) in good standing, which is authorized under such laws to
exercise corporate trust or stock transfer powers and is subject to super-
vision 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 $50,000,000 or (ii) a subsidiary of a corporation described in
clause (i) 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 such 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 or
Preferred Stock; the Company shall also either (i) mail a notice thereof in
writing to the registered holders of the Rights Certificates or (ii) make a
disclosure with respect thereto in a periodic report of the Company
required to be filed under the Exchange Act, any permitted report under the
Exchange Act, a press release of the Company or in any proxy or other
communication of the Company with its stockholders. Failure to give any
notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of
the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.
Section 22 Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights Certificates to
the contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by a majority of the
Board of Directors of the Company to reflect any adjustment or change in
the Purchase Price per share and the number or kind or class of securities,
cash or other property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement.
Section 23 Redemption and Termination.
(a) The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (i) the Trigger Date and (ii) the
Expiration Date, redeem all but not less than all of the then-outstanding
Rights at a redemption price of $.01 per Right (the "Redemption Price")
appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date of this Agreement. The
Company may, at its option, pay the Redemption Price in cash, shares
(including fractional shares) of Common Stock (based on the Current Market
Price of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors. The redemption
of the Rights by the Board of Directors of the Company may be made
effective at such time, on such basis and with such conditions as the Board
of Directors of the Company in its sole discretion may establish.
(b) At the time and date of effectiveness set forth in any
resolution of the Board of Directors of the Company ordering the redemption
of the Rights, without any further action and without any further 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; provided, however, that such resolution of the Board of Directors of
the Company may be revoked, rescinded or otherwise modified at any time
prior to the time and date of effectiveness set forth in such resolution,
in which event the right to exercise will not terminate at the time and
date originally set for such termination by the Board of Directors of the
Company. The Company shall promptly give public notice of any such
redemption; provided, however, that the failure to give, or any defect in,
any such notice shall not affect the validity of such redemption. The
Company shall also give notice of such redemption to the Rights Agent. The
Company may elect to give notice of such redemption to the holders of the
then-outstanding Rights by mailing such notice to all such holders at their
last addresses as they appear upon the registry books of the Rights Agent
or, prior to the issuance of Rights Certificates, on the registry books of
the transfer agent for the Common Stock. Any notice which is mailed in the
manner provided in this Agreement shall be deemed given, whether or not the
holder receives the notice. In connection with any redemption permitted
under this Section 23, the Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press release
announcing the manner of redemption of the Rights and (ii) mailing payment
of the Redemption Price to the registered holders of the Rights at their
last addresses as they appear on the registry books of the Rights Agent or,
prior to the issuance of the Rights Certificates, on the registry books of
the transfer agent for the Common Stock, and upon such action, all
outstanding Rights Certificates shall be null and void without any further
action by the Company. 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 that specifically set forth in this Section 23,
and other than in connection with the purchase of shares of Common Stock
prior to the earlier of the Trigger Date and the Expiration Date.
Section 24 Notice of Certain Events. In case the Company, on or
after the Distribution Date, shall propose to (a) pay any dividend payable
in stock of any class to the holders of its Common Shares or to make any
other distribution to the holders of its Common Shares (other than a
regular periodic cash dividend at an annual rate not in excess of 125% of
the annualized rate of the cash dividend paid on the Common Shares during
the immediately preceding fiscal year), or (b) offer to the holders of its
Common Shares rights, options or warrants to subscribe for or to purchase
any additional shares of Common Shares or shares of stock of any class or
any other securities, rights or options, or (c) effect any reclassification
of the Common Shares (other than a reclassification involving only the
subdivision of outstanding shares of Common Shares, a change in the par
value of such Common Shares or a change from par value to no par value), or
(d) directly or indirectly effect any consolidation or merger into or with,
or effect any sale, lease, exchange, or other transfer or disposition (or
to permit one or more of its Subsidiaries to effect any sale, lease,
exchange or other transfer or disposition), in one transaction or a series
of related transactions, of more than 50% of the assets or earning power of
the Company and its Subsidiaries (taken as a whole) to, any other Person,
or (e) effect the liquidation, dissolution or winding up of the Company,
then, in each such case, the Company shall give to each holder of a Right,
in accordance with Section 25, a notice of such proposed action, which
shall specify any record date for the purposes of such stock dividend or
distribution of rights, or the date on which such reclassification,
consolidation, merger, sale, lease, exchange, transfer, disposition,
liquidation, dissolution or winding up is to take place and if such holders
will or may participate therein, the date of participation therein by the
holders of Common Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (a) or (b)
above at least 20 days prior to the record date for determining holders of
the Common Shares for purposes of such action, and in the case of any such
other action, at least 20 days prior to the date of the taking of such
proposed action or the date of participation therein, if any, by the
holders of Common Shares, whichever shall be the earlier. The failure to
give notice as required by this Section 24 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.
In case any Triggering Event or Business Combination shall occur, then, in
any such case, the Company shall as soon as practicable thereafter give to
each holder of a Rights Certificate, in accordance with Section 25, notice
of the occurrence of such Triggering Event or Business Combination, which
shall specify the Triggering Event or Business Combination and include a
description of the consequences of such event to holders of Rights under
Section 11 or 13.
Section 25 Notices. Notices or demands authorized by this
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 made
if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand authorized by
this 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 registered or certified mail and shall be deemed given upon
receipt and addressed (until another address is filed in writing with the
Company) as follows:
Xxxxxx Trust and Savings Bank
000 Xxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Notices or demands authorized by this 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 (or, if no Rights Certificates have been
issued, if sent by first-class mail, postage prepaid, addressed to each
holder of a certificate representing shares of Common Stock at the address
of such holder as shown on the Company's Common Stock registry books).
Section 26 Supplements and Amendments.
(a) At any time prior to the Trigger Date, a majority of the
Board of Directors of the Company may, and the Rights Agent shall, if so
directed, supplement or amend any provision of this Agreement (including,
without limitation, (i) the Beneficial Ownership percent as set forth in
Section 1 at which a Person becomes an Acquiring Person, (ii) the
definition of Exempt Person as set forth in Section 1 to include any Person
in addition to the Persons described therein, and (iii) to the extent
permitted by applicable law, the number, designation, preferences and
rights of shares of the Preferred Stock as set forth in Exhibit A) without
the approval of any holders of Rights.
(b) Except as otherwise provided in Section 26(c):
(1) The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted
to the Board of Directors or the Company, or as may be
necessary or advisable in the administration of this
Agreement, including, without limitation, the right and
power to (i) interpret the provisions of this Agreement and
(ii) make all determinations deemed necessary or advisable
for the administration of this Agreement (including a
determination to redeem or not redeem the Rights, to
exchange or not exchange the Rights for Common Stock, or to
amend or supplement this Agreement).
(2) 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 of Directors of the Company in good
faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all
other Persons and (y) not subject the Board of Directors of
the Company to any liability to the holders of the Rights.
(c) From and after the Trigger Date:
(1) No amendment or other change shall be made in this
Agreement or the terms of the Rights (including the number,
designation, preferences and rights of shares of the
Preferred Stock as set forth in Exhibit A) which would have
an effect prohibited by Section 11(j) or Section 13(f) or
which would otherwise adversely affect the interests of the
holders of Rights Certificates (other than an Acquiring
Person or any other Person in whose hands the Rights are
void under the provisions of Section 7(e)). Notwithstanding
the foregoing, a majority of the Board of Directors may, and
the Rights Agent shall, if so directed, amend this Agreement
prior to the Trigger Date effective upon the Trigger Date.
(2) The Board of Directors of the Company shall not be
entitled to exercise the powers specified in Section 26(b)
after the Trigger Date unless the Board of Directors can
establish by clear and convincing evidence that its action
satisfies the requirement in Section 26(c)(1).
(d) Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment that changes the rights and duties of
the Rights Agent under this Agreement will be effective against the Rights
Agent without the execution of such supplement or amendment by the Rights
Agent.
Section 27 Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 28 Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of Rights any legal or equitable right,
remedy or claim under this Agreement; and this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights.
Section 29 Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be valid and
enforceable under applicable law, but if any provision of this Agreement
shall be held to be prohibited by or unenforceable under applicable law,
(i) such provision shall be applied to accomplish the objectives of the
provision as originally written to the fullest extent permitted by law and
(ii) all other provisions of this Agreement shall remain in full force and
effect. No rule of strict construction, rule resolving ambiguities against
the person who drafted the provision giving rise to such ambiguities, or
other such rule of interpretation shall be applied against any party with
respect to this Agreement.
Section 30 Governing Law. This 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 internal laws of Delaware applicable
to contracts to be made and performed entirely within Delaware.
Section 31 Counterparts. This Agreement may be executed in
counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and both such counterparts shall together constitute but
one and the same instrument.
Section 32 Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions of this Agreement.
Section 33 Grammatical Construction. Throughout this Agreement,
where such meanings would be appropriate, (a) any pronouns used herein
shall include the corresponding masculine, feminine or neuter forms (e.g.,
references to "he" shall also include "she" and "it" and references to
"who" and "whom" shall also include "which") and (b) the plural form of
nouns and pronouns shall include the singular and vice-versa.
* * * * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and their respective corporate seals to be hereunto
affixed and attested, all as of the day and year first above written.
MOTOROLA, INC.
By________________________________
Title: Senior Vice President and Treasurer
XXXXXX TRUST AND SAVINGS BANK
as Rights Agent
By________________________________
Title: Vice President
Exhibit A
FORM OF
CERTIFICATE OF DESIGNATION, PREFERENCES AND RIGHTS
OF JUNIOR PARTICIPATING PREFERRED STOCK, SERIES B
OF
MOTOROLA, INC.
Pursuant to Section 151 of the Corporation Law
of the State of Delaware
Motorola, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware, in accordance with the provisions
of Section 151 thereof, DOES HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors
by the Certificate of Incorporation of the Corporation, the Board of
Directors on November 5, 1998, adopted the following resolution creating a
series of two hundred and fifty thousand (250,000) shares of Preferred
Stock designated as Junior Participating Preferred Stock, Series B:
RESOLVED, that pursuant to the authority vested in the Board of
Directors by ARTICLE FOUR of the Certificate of Incorporation and out of
the Preferred Stock authorized therein, the Board hereby authorizes that a
series of Preferred Stock of the Corporation be, and it hereby is, created
and approved for issuance in accordance with the Rights Agreement dated as
of November 5, 1998, between the Corporation and Xxxxxx Trust and Savings
Bank, and that the designation and amount thereof and the voting powers,
preferences and relative, participating, optional and other special rights
of the shares of such series, and the qualifications, limitations or
restrictions thereof be, and hereby are, as follows:
Section 1 Designation and Amount. The shares of such series shall
be designated as "Junior Participating Preferred Stock, Series B" (the
"Series B Preferred Stock") and the number of shares constituting such
series shall be 250,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no
decrease shall reduce the number of shares of Series B Preferred Stock to a
number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding securities
issued by the Corporation convertible into Series B Preferred Stock.
Section 2 Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any
outstanding shares of any series of Preferred Stock ranking prior and
superior to the shares of Series B Preferred Stock with respect to
dividends, the holders of shares of Series B Preferred Stock, in preference
to the holders of Common Stock and of any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends payable in
cash on the fifteenth day of March, June, September and December in each
year (each such date being referred to herein as a "Quarterly Dividend
Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series B
Preferred Stock, in an amount per share (rounded to the nearest cent) equal
to the greater of (a) $250.00 or (b) the Adjustment Number (as defined
below) times the aggregate per share amount of all cash dividends, and the
Adjustment Number times the aggregate per share amount (payable in kind) of
all non-cash dividends or other distributions other than a dividend payable
in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common
Stock since the immediately preceding Quarterly Dividend Payment Date or,
with respect to the first Quarterly Dividend Payment Date, since the first
issuance of any share or fraction of a share of Series B Preferred Stock.
The "Adjustment Number" shall initially be 10,000. In the event the
Corporation shall at any time after November 5, 1998 (i) declare or pay any
dividend on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock into a greater number of shares or (iii)
combine the outstanding Common Stock into a smaller number of shares, then
in each such case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately
prior to such event.
(B) The Corporation shall declare a dividend or distribution on
the Series B Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment
Date and the next subsequent Quarterly Dividend Payment Date, a dividend of
$250.00 per share on the Series B Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series B Preferred Stock from the Quarterly Dividend
Payment Date next preceding the date of issue of such shares of Series B
Preferred Stock, unless the date of issue of such shares is prior to the
record date for the first Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from the date of issue of
such shares, or unless the date of issue is a Quarterly Dividend Payment
Date or is a date after the record date for the determination of holders of
shares of Series B Preferred Stock entitled to receive a quarterly dividend
and before such Quarterly Dividend Payment Date, in either of which events
such dividends shall begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series B Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares
of Series B Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be no more than 30
days prior to the date fixed for the payment thereof.
Section 3 Voting Rights. The holders of shares of Series B
Preferred Stock shall have the following voting rights:
(A) Each share of Series B Preferred Stock shall entitle the
holder thereof to a number of votes equal to the Adjustment Number (as
adjusted from time to time pursuant to Section 2(A) hereof) on all matters
submitted to a vote of the stockholders of the Corporation.
(B) Except as otherwise provided herein, by law or in the
Certificate of Incorporation or By-Laws, the holders of shares of Series B
Preferred Stock and the holders of shares of Common Stock and any other
capital stock of the Corporation having general voting rights shall vote
together as one class on all matters submitted to a vote of stockholders of
the Corporation.
(i) If at any time dividends on any Series B Preferred Stock
shall be in arrears in an amount equal to six quarterly dividends thereon,
the occurrence of such contingency shall xxxx the beginning of a period
(herein called a "default period") that shall extend until such time when
all accrued and unpaid dividends for all previous quarterly dividend
periods and for the current quarterly period on all shares of Series B
Preferred Stock then outstanding shall have been declared and paid or set
apart for payment. During each default period, (1) the number of Directors
shall be increased by two, effective as of the time of election of such
Directors as herein provided, and (2) the holders of Series B Preferred
Stock and the holders of other Preferred Stock upon which these or like
voting rights have been conferred and are exercisable (the "Voting
Preferred Stock") with dividends in arrears equal to six quarterly
dividends thereon, voting as a class, irrespective of series, shall have
the right to elect such two Directors.
(ii) During any default period, such voting right of the
holders of Series B Preferred Stock may be exercised initially at a special
meeting called pursuant to subparagraph (iii) of this Section 3(C) or at
any annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that such voting right shall not be exercised unless
the holders of at least one-third in number of the shares of Voting
Preferred Stock outstanding shall be present in person or by proxy. The
absence of a quorum of the holders of Common Stock shall not affect the
exercise by the holders of Voting Preferred Stock of such voting right.
(iii) Unless the holders of Voting Preferred Stock shall,
during an existing default period, have previously exercised their right to
elect Directors, the Board of Directors may order, or any stockholder or
stockholders owning in the aggregate not less than 10% of the total number
of shares of Voting Preferred Stock outstanding, irrespective of series,
may request, the calling of a special meeting of the holders of Voting
Preferred Stock, which meeting shall thereupon be called by the Chairman of
the Board, the President, an Executive Vice President, a Vice President or
the Secretary of the Corporation. Notice of such meeting and of any annual
meeting at which holders of Voting Preferred Stock are entitled to vote
pursuant to this paragraph (C)(iii) shall be given to each holder of record
of Voting Preferred Stock by mailing a copy of such notice to him at his
last address as the same appears on the books of the Corporation. Such
meeting shall be called for a time not earlier than 10 days and not later
than 60 days after such order or request or, in default of the calling of
such meeting within 60 days after such order or request, such meeting may
be called on similar notice by any stockholder or stockholders owning in
the aggregate not less than 10% of the total number of shares of Voting
Preferred Stock outstanding. Notwithstanding the provisions of this
paragraph (C)(iii), no such special meeting shall be called during the
period within 60 days immediately preceding the date fixed for the next
annual meeting of the stockholders.
(iv) In any default period, after the holders of Voting
Preferred Stock shall have exercised their right to elect Directors voting
as a class, (x) the Directors so elected by the holders of Voting Preferred
Stock shall continue in office until their successors shall have been
elected by such holders or until the expiration of the default period, and
(y) any vacancy in the Board of Directors may be filled by vote of a
majority of the remaining Directors theretofore elected by the holders of
the class or classes of stock which elected the Director whose office shall
have become vacant. References in this paragraph (C) to Directors elected
by the holders of a particular class or classes of stock shall include
Directors elected by such Directors to fill vacancies as provided in clause
(y) of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x)
the right of the holders of Voting Preferred Stock as a class to elect
Directors shall cease, (y) the term of any Directors elected by the holders
of Voting Preferred Stock as a class shall terminate and (z) the number of
Directors shall be such number as may be provided for in the Certificate of
Incorporation or By-Laws irrespective of any increase made pursuant to the
provisions of paragraph (C) of this Section 3 (such number being subject,
however, to change thereafter in any manner provided by law or in the
Certificate of Incorporation or By-Laws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in the
preceding sentence may be filled by a majority of the remaining Directors.
(C) Except as set forth herein, holders of Series B Preferred
Stock shall have no special voting rights and their consent shall not be
required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
Section 4 Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of Series B
Preferred Stock outstanding shall have been paid in full, the Corporation
shall not:
(i) declare or pay dividends on, or make any other
distributions on, any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series B
Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series B
Preferred Stock, except dividends paid ratably on the Series B Preferred
Stock and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series B Preferred
Stock, provided that the Corporation may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in exchange for shares of
any stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series B Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series B Preferred Stock, or any shares of stock ranking on a
parity with the Series B Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as the
Board of Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph
(A) of this Section 4, purchase or otherwise acquire such shares at such
time and in such manner.
Section 5 Reacquired Shares. Any shares of Series B Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized
but unissued shares of preferred stock and may be reissued as part of a new
series of preferred stock to be created by resolution or resolutions of the
Board of Directors, subject to the conditions and restrictions on issuance
set forth herein, in the Certificate of Incorporation or By-laws or
otherwise required by law.
Section 6 Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution
shall be made (A) to the holders of shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the
Series B Preferred Stock unless, prior thereto, the holders of shares of
Series B Preferred Stock shall have received the greater of (i) $1,000 per
share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such
payment, and (ii) an aggregate amount per share, equal to the Adjustment
Number (as adjusted from time to time pursuant to Section 2(A) hereof)
times the aggregate amount to be distributed per share to holders of Common
Stock, or (B) to the holders of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series B
Preferred Stock, except distributions made ratably on the Series B
Preferred Stock and all other such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up.
Section 7 Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property,
then in any such case the shares of Series B Preferred Stock then
outstanding shall at the same time be similarly exchanged or changed in an
amount per share equal to the Adjustment Number (as adjusted from time to
time pursuant to Section 2(A) hereof) times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged.
Section 8 No Redemption. The shares of Series B Preferred Stock
shall not be redeemable.
Section 9 Amendment. The Certificate of Incorporation of the
Corporation shall not be amended in any manner which would materially alter
or change the powers, preferences or special rights of the Series B
Preferred Stock so as to affect them adversely without the affirmative vote
of the holders of two-thirds of the outstanding shares of Series B
Preferred Stock, if any, voting together as a single class. At any time
when there are no shares of Series B Preferred Stock outstanding, the
number, designation, preferences and rights of the Series B Preferred Stock
as set forth in this Certificate of Designation may be amended by the Board
of Directors in the manner provided in Section 151(g) of the Delaware
General Corporation Law.
IN WITNESS WHEREOF, I have executed and subscribed this Certificate
and do affirm the foregoing as true under the penalties of perjury as of
the 5th day of November, 1998.
________________________________________
Exhibit B
[Form of Rights Certificate]
Certificate No. R- __________Rights
NOT EXERCISABLE AFTER NOVEMBER 20, 2008 OR EARLIER IF
NOTICE OF REDEMPTION OR EXCHANGE IS GIVEN. THE RIGHTS ARE
SUBJECT TO REDEMPTION OR EXCHANGE, AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Rights Certificate
MOTOROLA, 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 November 5, 1998 (the
"Rights Agreement") between Motorola, Inc., a Delaware corporation (the
"Company"), and Xxxxxx Trust and Savings Bank, an Illinois banking
corporation (the "Rights Agent"), unless notice of redemption or exchange
shall have been previously given by the Company, 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. Chicago, Illinois time) on
November 20, 2008, at the principal corporate trust office of the Rights
Agent, or at the office of its successor as Rights Agent, one ten-
thousandth of a fully paid nonassessable share of the Junior Participating
Preferred Stock, Series B, par value $100 per share, of the Company (the
"Preferred Stock"), at a purchase price (the "Purchase Price") of $200 per
one ten-thousandth share, upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase duly executed. The
Purchase Price may be paid in cash or by certified bank check or bank draft
payable to the order of the Company.
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. Capitalized terms used but not defined in this Rights
Certificate that are defined in the Rights Agreement shall have the same
meanings ascribed to them in the Rights Agreement. Copies of the Rights
Agreement are on file at the principal executive offices of the Company and
the above-mentioned office of the Rights Agent.
As provided in the Rights Agreement, the Purchase Price and the number
of shares of Preferred Stock or other securities, cash or other property
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.
If the Rights evidenced by this Rights Certificate are or were
formerly beneficially owned, on or after the earlier of the Distribution
Date and the Trigger Date, by (i) an Acquiring Person or any Associate or
Affiliate of an Acquiring Person, (ii) a direct or indirect transferee of
an Acquiring Person (or of any Associate or Affiliate of an Acquiring
Person) who becomes or becomes entitled to be a transferee after the
Acquiring Person becomes such, or (iii) a direct or indirect transferee of
an Acquiring Person (or of an Associate or Affiliate of such Acquiring
Person) who becomes or becomes entitled to be a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a direct or indirect transfer (whether or not
for consideration) from the Acquiring Person (or from an Associate or
Affiliate of such Acquiring Person) to holders of equity interests in such
Acquiring Person (or to holders of equity interests in any Associate or
Affiliate of such Acquiring Person) or to any Person with whom the
Acquiring Person (or an Associate or Affiliate of such Acquiring Person)
has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a direct or indirect transfer which a majority of
the Board of Directors of the Company determines is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of Section 7(e) of the Rights Agreement, such Rights shall,
immediately upon the occurrence of a Triggering Event and without any
further action, be null and void and no holder of such Rights (including
any subsequent holder) shall have any rights whatsoever with respect to
such Rights whether under the Rights Agreement or otherwise, provided,
however, that, in the case of transferees under clause (ii) or clause (iii)
above, any Rights beneficially owned by such transferee shall be null and
void only if and to the extent such Rights were formerly beneficially owned
by a Person who was, at the time such Person beneficially owned such
Rights, or who later became, an Acquiring Person or an Affiliate or
Associate of such Acquiring Person.
This Rights Certificate, with or without other Rights Certificates,
upon surrender at the principal corporate trust office of the Rights Agent,
may be exchanged for another Rights Certificate or Rights Certificates of
like tenor and date evidencing Rights entitling the holder to purchase a
like aggregate number of shares of Preferred Stock or other property as the
Rights evidenced by the Rights Certificate or Rights Certificates
surrendered 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 Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (a) may be redeemed by the Board of Directors
of the Company at its option at a redemption price of $.01 per Right,
subject to adjustment, payable, at the election of the Company, in cash or
shares (including fractional shares) of Common Stock or such other
consideration as the Board of Directors of the Company may determine, at
any time prior to the earlier of (i) the Trigger Date and (ii) the
Expiration Date, or (b) may be exchanged by the Board of Directors of the
Company, at its option, in whole or in part, for shares of the Company's
Common Stock or other equivalent securities on a one-for-one basis, at any
time after the Trigger Date and prior to (i) any Person (other than an
Exempt Person), together with all Affiliates and Associates of such Person,
becoming the Beneficial Owner of 50% or more of the Common Stock then
outstanding and (ii) the occurrence of a Business Combination.
No fractional shares of Preferred Stock (other than fractions that are
integral multiples of one ten-thousandth of a share of Preferred Stock,
which may, at the election of the Company, be evidenced by depository
receipts) are required to be issued upon the exercise of any Right or
Rights evidenced hereby, but in lieu thereof the Company may elect to
(i) evidence fractional shares by depositary receipts, (ii) issue scrip or
warrants in registered form (either represented by a certificate or
uncertificated) or in bearer form (represented by a certificate) which
shall entitle the holder to receive a full share upon the surrender of such
scrip or warrants aggregating a full share, or (iii) make a cash payment,
as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to
vote or to receive dividends on, or shall be deemed for any purpose the
holder of, Preferred Stock or any other securities, cash or property which
may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or this Certificate be construed to
confer upon the holder hereof, as such, any of the rights of a stockholder
of the Company, including, without limitation, 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 to institute, as a holder of Preferred Stock or
other securities issuable on the exercise of the Rights represented by this
Certificate, any derivative action, or otherwise, until and only to the
extent 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.
* * * * *
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _______ __, ____.
MOTOROLA, INC.
By: ________________________________
Title: ________________________________
Countersigned:
XXXXXX TRUST AND SAVINGS BANK
By: __________________________
Authorized Officer
[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)
_________ Rights evidenced by this Rights Certificate, together with all
right, title and interest therein, and does hereby irrevocably constitute
and appoint ________________________ with a power of Attorney to transfer
the said Rights and a Rights Certificate evidencing such Rights on the
books of ________________, with full power of substitution.
A new Rights Certificate evidencing the remaining balance, if any, of
such Rights not hereby sold, assigned and transferred shall be mailed to
and registered in the name of the undersigned unless such person requests
that such Rights Certificate be registered in the name of and mailed to
(complete only if a Rights Certificate evidencing any remaining balance of
Rights is to be registered in a name other than the undersigned):
Please insert Social Security or
other identifying number of transferee: ________________________
__________________________________________________________________________
(Please print name and address)
__________________________________________________________________________
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate or any Rights evidenced hereby ?
are ? are 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 an
Acquiring Person (as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned ? did ? did not acquire any of the Rights
evidenced by this Rights Certificate from any Person who is or was an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: ____________________ _________________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution with
membership in a recognized signature guarantee medallion program as
approved by the Stock Transfer Association.
NOTICE
The signature on the foregoing Form of Assignment must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment is not completed, the Company will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement) and,
in the case of an assignment or other transfer of this Rights Certificate
or any Rights evidenced hereby, will affix a legend to that effect on any
Rights Certificate issued in whole or partial exchange for this Rights
Certificate.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
the Rights represented by this Rights Certificate)
To: MOTOROLA, INC.
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock or other securities, cash or other property issuable upon
the exercise of such Rights and requests that certificates for such shares
or other securities be issued in the name of, and such cash or other
property be paid to:
Please insert social security
or other identifying number: ________________________
__________________________________________________________________________
(Please print name and address)
__________________________________________________________________________
A new Rights Certificate evidencing the remaining balance, if
any, of such Rights not hereby exercised shall be mailed to and registered
in the name of the undersigned unless such person requests that such Rights
Certificate be registered in the name of and mailed to (complete only if
Rights Certificate evidencing any remaining balance of Rights is to be
registered in a name other than the undersigned):
Please insert social security
or other identifying number: ________________________
__________________________________________________________________________
(Please print name and address)
_________________________________________________________________________
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate ? are ?
are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement);
(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 an Acquiring Person.
Dated: ______________________ _________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution with
membership in a recognized signature guarantee medallion program as
approved by the Stock Transfer Association.
NOTICE
The signature on the foregoing Form of Election to Purchase must
correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change
whatsoever.
In the event the certification set forth above in the Form of
Election to Purchase is not completed, the Company will deem the beneficial
owner of the Rights evidenced by this Rights Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) and, in the case of an assignment or other transfer of this
Rights Certificate or any Rights evidenced hereby, will affix a legend to
that effect on any Rights Certificate issued in whole or partial exchange
for this Rights Certificate.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
ADOPTION OF NEW RIGHTS PLAN
On November 5, 1998, the Board of Directors of Motorola, Inc. (the
"Company") authorized the issuance of one preferred share purchase right (a
"Right") for each outstanding share of common stock, par value $3 per share
(the "Common Shares"), of the Company. The distribution is payable to
stockholders of record at the close of business on November 20, 1998 (the
"Record Date"), and with respect to all Common Shares that become
outstanding after the Record Date and prior to the earliest of the
Distribution Date (as defined below), the redemption of the Rights, the
exchange of the Rights, and the expiration of the Rights (and, in certain
cases, following the Distribution Date).
Each Right entitles the registered holder to purchase from the Company
one ten-thousandth of a share of Junior Participating Preferred Stock,
Series B, par value $100 per share, of the Company (the "Preferred Shares")
at a price of $200 per one ten-thousandth of a Preferred Share (the
"Purchase Price"), subject to adjustment. The description and terms of the
Rights are set forth in a Rights Agreement (the "Rights Agreement") between
the Company and Xxxxxx Trust and Savings Bank, as Rights Agent (the "Rights
Agent").
The Rights have certain anti-takeover effects. The Rights may cause
substantial dilution to a person or group that attempts to acquire the
Company on terms not approved by the Board of Directors, except pursuant to
an offer conditioned on a substantial number of Rights being acquired. The
Rights should not interfere with any merger or other business combination
approved by the Board of Directors because of the Board of Directors
ability to redeem the Rights, as discussed below.
The Rights replace the preferred stock purchase rights issued pursuant
to a Rights Agreement dated as of November 9, 1988, as amended, between the
Company and Xxxxxx Trust and Savings Bank as Rights Agent. That agreement
and the old rights are scheduled to expire as of the close of business on
November 20, 1998 pursuant to their terms.
RIGHTS ATTACH TO COMMON SHARES INITIALLY
Initially and until a Distribution Date (as defined below) occurs, the
Rights are attached to all Common Shares and no separate Rights
certificates will be issued. During this initial period:
- The Rights are not exercisable;
- Holders, as such, have no voting right;
- The Rights are transferred with the Common Shares and are not
transferable separately from the Common Shares;
- No dividends are paid on the Rights;
- New Common Share certificates or book entry shares issued will
contain a notation incorporating the Rights Agreement by reference;
- The transfer of any Common Shares will also constitute the
transfer of the Rights; and
The Rights expire November 20, 2008 (the "Expiration Date") unless
earlier redeemed or exchange by the Company as described below.
DISTRIBUTION OF RIGHTS
Separate certificates evidencing the Rights will be mailed to holders
of record of the Common Shares on the "Distribution Date." The
Distribution Date is the earlier to occur of the following two events:
- The tenth day after a public announcement that a person or group
of affiliated or associated persons has acquired or obtained the right to
acquire 10% or more of the outstanding Common Shares; or
- The tenth business day after the commencement or public disclosure
of an intention to commence a tender offer or exchange offer by a person
other than an exempt person if, upon consummation of the offer, such person
could acquire beneficial ownership of 10% or more of the outstanding of
Common Shares.
RIGHT TO PURCHASE MOTOROLA STOCK
If a person or group acquires or obtains the right to acquire 10% or
more of the outstanding Common Shares (thereby becoming an "Acquiring
Person") each holder of a Right (except those held by the Acquiring Person
and its affiliates and associates) will have the right to purchase, upon
exercise, Common Shares (or, in certain circumstances, Preferred Shares,
Common Share equivalents or cash) having a value equal to two times the
exercise price of the Right. In other words, the Rights holders other than
the Acquiring Person may purchase Common Shares at a 50% discount.
For example, at the exercise price of $200 per Right, each Right not
owned by an Acquiring Person would entitle its holder to purchase $400
worth of Common Shares (or other consideration, as noted above) for $200.
Assuming a value of $100 per Common Share at such time, the holder of each
valid Right would be entitled to purchase four Common Shares for $200.
RIGHTS TO PURCHASE ACQUIRING PERSON STOCK
In the event that, at the time or after a person becomes an Acquiring
Person, the Company is involved in a merger or other business combination
in which (i) the Company is not the surviving corporation, (ii) Common
Stock is changed or exchanged, or (iii) 50% or more of the Company's
consolidated assets or earning power are sold, then each Right (other than
Rights that are or were owned by the Acquiring Person and certain related
persons and transferees, which will thereafter be void) shall thereafter be
exercisable for a number of shares of common stock of the acquiring company
having a market value of two times the exercise price of the Right. In
other words, a Rights holder may purchase the acquiring company's common
stock at a 50% discount.
EXCHANGE OF MOTOROLA STOCK FOR RIGHTS
At any time after any person or group becomes an Acquiring Person and
before the Acquiring Person acquires 50% or more of the outstanding Common
Shares, the Board of Directors may exchange the Rights (other than Rights
owned by the Acquiring Person which will have become void), in whole or in
part, at an exchange ratio of one Common Share, or one ten-thousandth of a
Preferred Share (or a Common Share equivalent), per Right (subject to
adjustment).
REDEMPTION
The Rights are redeemable by the Company in whole but not in part at a
price of $.01 per Right at any time prior to the time that a person or a
group has become an Acquiring Person. Immediately upon redemption, the
right to exercise will terminate and the only right of holders will be to
receive the redemption price.
AMENDMENTS
As long as the Rights are redeemable, the terms of the Rights may be
amended by the Board of Directors in its discretion without the consent of
the Rights holders. After that time, no amendment may adversely affect the
interests of the Rights Holder (other than the Acquiring Person).
TERMS OF PREFERRED SHARES
The Preferred Shares purchasable upon exercise of the Rights will not
be redeemable. Each Preferred Share will be entitled to a minimum
preferential quarterly dividend payment equal to the greater of $250 per
share and 10,000 times the dividend declared per Common Share. In the
event of liquidation, the holders of the Preferred Shares will be entitled
to a minimum preferential liquidation payment equal to the greater of
$1,000 per share and 10,000 times the payment made per Common Share. Each
Preferred Share will have 10,000 votes per share, voting together with the
Common Shares. In the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, each Preferred Share will
be entitled to receive 10,000 times the amount received per Common Share.
MISCELLANEOUS
The Purchase Price payable, and the number and kind of securities,
cash or other property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a
stock dividend or distribution on, or a subdivision or combination of, the
Common Shares, (ii) upon the grant to holders of the Common Shares of
rights, options or warrants to subscribe for Common Shares or securities
convertible into Common Shares at less than the current market price, (iii)
upon the distribution to holders of the Common Shares of securities, cash,
evidences of indebtedness or assets (excluding regular periodic cash
dividends out of earnings or retained earnings) and (iv) in connection with
recapitalizations of the Company or reclassifications of the Common Shares.
No fractional Common Shares or Preferred Shares will be required to be
issued (other than fractions of Preferred Shares which are integral
multiples of one ten-thousandth of a Preferred Share, which may, at the
election of the Company, be evidenced by depositary receipts) and in lieu
thereof, an adjustment in cash will be made based on the market price of
Common Shares or Preferred Shares on the last trading date prior to the
date of exercise.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of the one ten-thousandth interest in a
Preferred Share that may be purchased upon exercise of each Right should
approximate the value of one Common Share.
A copy of the Rights Agreement has been filed with the Securities and
Exchange commission as an Exhibit to an application for Registration on
Form 8-A and as an Exhibit to the Company's Current Report on Form 8-K. 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.
