EXHIBIT 2
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POWER-ONE, INC.
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
Rights Agent
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RIGHTS AGREEMENT
Dated as of July 27, 2000
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TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions..............................................................1
Section 2. Appointment of Rights Agent......................................................4
Section 3. Issuance of Right Certificates...................................................4
Section 4. Form of Right Certificates.......................................................5
Section 5. Countersignature and Registration................................................6
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates.....................................7
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights....................7
Section 8. Cancellation and Destruction of Right Certificates...............................9
Section 9. Reservation and Availability of Shares; Registration............................10
Section 10. Record Date.....................................................................10
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights..............11
Section 12. Certification of Adjusted Purchase Price or Number of Shares....................17
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power............17
Section 14. Fractional Rights and Fractional Shares.........................................20
Section 15. Rights of Action................................................................20
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 16. Agreement of Right Holders......................................................21
Section 17. Right Certificate Holder Not Deemed a Stockholder...............................21
Section 18. Concerning the Rights Agent.....................................................21
Section 19. Merger or Consolidation or Change of Name of Rights Agent.......................22
Section 20. Duties of Rights Agent..........................................................23
Section 21. Change of Rights Agent..........................................................24
Section 22. Issuance of New Right Certificates..............................................25
Section 23. Redemption......................................................................25
Section 24. Notice of Proposed Actions......................................................25
Section 25. Notices.........................................................................26
Section 26. Supplements and Amendments......................................................27
Section 27. Exchange........................................................................27
Section 28. Successors......................................................................28
Section 29. DeterminationS and Actions Taken by the Board of Directors......................28
Section 30. Benefits of this Agreement......................................................28
Section 31. Governing Law...................................................................28
Section 32. Counterparts....................................................................29
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TABLE OF CONTENTS
(CONTINUED)
PAGE
Section 33. Section Headings................................................................29
Section 34. Severability....................................................................29
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of July 27, 2000, between
Power-One, Inc., a Delaware corporation (the "Company"), and American Stock
Transfer & Trust Company as Rights Agent.
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company has authorized
and declared the distribution of one right for (i) each share of Common Stock of
the Company ("Common Stock") outstanding at the Close of Business (as
hereinafter defined) on August 7, 2000 (the "Rights Record Date"), each right
representing the right to purchase one Unit consisting, initially, of one
one-thousandth of a share of Junior Participating Preferred Stock, and (ii) each
additional share of Common Stock which shall become outstanding between the
Rights Record Date and the earliest of the Distribution Date, the Expiration
Date (as such terms are hereinafter defined) and the date, if any, on which such
rights may be redeemed, all upon the terms and subject to the conditions
hereinafter set forth (each such right being hereinafter referred to as a
"Right");
NOW, THEREFORE, the parties agree as follows:
Section 1. CERTAIN DEFINITIONS.
(a) For purposes of this Agreement, the following terms
have the meanings indicated:
"ACQUIRING PERSON" shall mean any Person who or which, alone
or together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner (within the meaning of Section 1(b)) of a Substantial Block of
Voting Stock, but shall not include (i) an Exempt Person or (ii) any Person who
or which acquires a Substantial Block of Voting Stock in connection with a
transaction or series of transactions approved prior to such transaction or
transactions by the Board of Directors of the Company; provided that no person
shall become an Acquiring Person solely as a result of a reduction in the number
of shares of Voting Stock outstanding, unless and until such Person shall
thereafter become the Beneficial Owner of additional shares constituting 1% or
more of the general voting power of the Company.
"AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect as of the date hereof.
"BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or day on which banking institutions in the State of California are
authorized or obligated by law or executive order to close.
"CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m.,
Los Angeles time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m., Los Angeles time, on the next succeeding
Business Day.
"COMMON STOCK" shall have the meaning assigned to it in the
preamble; and "COMMON STOCK" when used with reference to Persons other than the
Company shall mean: (i) in the case of Persons organized in corporate form, the
capital stock or equity security with the greatest voting power of such Person
or, if such Person is a Subsidiary of another Person, of the Person or Persons
which ultimately control such first-mentioned Person; and (ii) in the case of
Persons not organized in corporate form, the units of beneficial interest which
(A) represent the right to participate generally in the profits and losses of
such Person (including without limitation any flow-through tax benefits
resulting from an ownership interest in such Person) and (B) are entitled to
exercise the greatest voting power of such Person or, in the case of a limited
partnership, shall have the power to remove the general partner or partners.
"DISTRIBUTION DATE" shall have the meaning assigned to it in
Section 3(a).
"EQUIVALENT STOCK" shall have the meaning assigned to it in
Section 7(a).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended from time to time.
"EXEMPT PERSON" shall mean the Company, any Subsidiary of the
Company and any employee benefit plan or employee stock plan of the Company or
of any Subsidiary of the Company, or any trust or other entity organized,
established or holding shares of Common Stock by, for or pursuant to, the terms
of any such plan, or Xxxxxxxx Group, Inc. or its affiliates.
"EXPIRATION DATE" shall have the meaning assigned to it in
Section 7(a).
"OFFER DATE" shall have the meaning assigned to it in Section
3(a).
"PERSON" shall mean any individual, firm, corporation,
partnership, trust or other entity and shall include any successor by merger (or
otherwise) of any of the foregoing.
"PRINCIPAL PARTY" shall have the meaning assigned to it in
Section 13(b).
"PURCHASE PRICE" shall mean the price payable for one Unit
upon exercise of a Right.
"QUALIFIED OFFER" shall mean a tender or exchange offer for
all outstanding Common Stock at a price and on terms determined to be adequate
and otherwise in the best interests of the Company and its stockholders (other
than the Person or an Affiliate or Associate thereof on whose behalf the offer
is made) by at least a majority of the Directors who are not representatives of
or affiliated with the Person making such offer or any Affiliate or Associate of
such Person.
"REDEMPTION PRICE" shall have the meaning assigned to it in
Section 23(a).
"RIGHT" shall have the meaning assigned to it in the preamble.
"RIGHTS RECORD DATE" shall have the meaning assigned to it in
the preamble.
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"SUBJECT SHARES" shall mean the class or series of shares then
issuable on exercise of the Rights.
"STOCK ACQUISITION DATE" shall mean the date of the first
public announcement by the Company or an Acquiring Person (which, for purposes
of this definition, shall include, without limitation, a report filed pursuant
to Section 13(d) under the Exchange Act) that an Acquiring Person has become
such.
"SUBSIDIARY" shall mean, with respect to any Person, a
corporation or other entity the securities or other ownership interests of which
having ordinary voting power sufficient to elect a majority of the board of
directors or other persons performing similar functions are at the time directly
or indirectly owned by such Person and any Affiliate of such Person.
"SUBSTANTIAL BLOCK" shall mean a number of shares of Voting
Stock having in the aggregate 15 percent or more of the general voting power.
"TRADING DAY" shall have the meaning assigned to it in Section
11(d).
"UNIT" shall mean the shares or other securities issuable upon
exercise of one Right, initially one one-thousandth of a share of Junior
Participating Preferred Stock of the Company having the rights and preferences
set forth in Exhibit C, before any adjustment pursuant to Section 11(a)(ii) or
Section 13.
"VOTING STOCK" shall mean shares of the Company's capital
stock the holders of which have general voting power.
(b) For purposes of this Agreement, a Person shall be deemed
the "Beneficial Owner" of any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing), or upon the
exercise of any conversion, exchange or purchase rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted for payment
or exchange; or (B) the right to vote or to direct the voting of, pursuant to
any agreement, arrangement or understanding (whether or not in writing); or (C)
the right to dispose or to direct the disposition of, pursuant to any agreement,
arrangement or understanding (whether or not in writing); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or understanding
(whether or not in writing) for the purpose of acquiring, holding, voting or
disposing of any securities of the Company;
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provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to Beneficially Own, any security if the agreement, arrangement or understanding
to vote such security (1) arises solely from the grant of a revocable proxy or
consent given to such Person in connection with a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable rules and
regulations under the Exchange Act, and (2) is not also then reportable on
Schedule 13(d) (or any comparable or successor report) under the Exchange Act;
provided, further, that a Person engaged in business as an underwriter of
securities shall not be deemed the "Beneficial Owner" of securities acquired
through such person's participation in good faith in a firm commitment
underwriting until the expiration of the 40-day period immediately following the
date of such acquisition.
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 Agent or
Agents as it may deem necessary or desirable and determine the respective duties
of the Rights Agent and the Co-Rights Agent or Agents.
Section 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) Until the Close of Business on the earlier of (i) the
tenth Business Day after a Stock Acquisition Date or (ii) the tenth Business Day
(or such later date as the Company's Board of Directors shall determine) after
the date of the commencement by any Person (other than an Exempt Person) of, or
the date of the first public announcement (such commencement date or
announcement date being herein referred to as the "Offer Date") of the intent of
any Person (other than an Exempt Person) to commence, a tender or exchange offer
upon the successful consummation of which such Person, together with its
Affiliates and Associates, would be the Beneficial Owner of 15 percent or more
of the then outstanding Voting Stock (irrespective of whether any shares are
actually purchased pursuant to such offer) (the tenth Business Day after the
first to occur of a Stock Acquisition Date or an Offer Date being herein
referred to as the "Distribution Date"),
(i) the Rights will automatically attach to, and
be evidenced by, the certificates for Common Stock registered in the names of
the holders of Common Stock (which certificates for Common Stock shall be deemed
also to be Right Certificates) and not by separate Right Certificates, and
(ii) each Right will be transferable only in
connection with the transfer of the underlying shares of Common Stock.
As soon as practicable after the Distribution Date, the Rights
Agent will mail, by first-class, insured, postage prepaid mail, to each record
holder of Common Stock as of the Close of Business on the Distribution Date, as
shown by the records of the Company at the Close of Business on the Distribution
Date, at the address of such holder shown on such records, a Right Certificate,
in substantially the form attached hereto as Exhibit A, evidencing one Right for
each share of Common Stock so held.
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(b) As soon as practicable after the Rights Record Date,
the Company will send a copy of a Summary of Rights, in substantially the form
attached hereto as Exhibit B, by first-class mail, postage prepaid, to each
record holder of Common Stock as of the Close of Business on the Rights Record
Date, at the address of such holder shown on the records of the Company.
(c) The Company will cause certificates for Common Stock
issued after the Rights Record Date (including replacement certificates for
shares of Common Stock outstanding on or prior to the Rights Record Date), but
prior to the earliest of (i) the Distribution Date, (ii) the Expiration Date and
(iii) the date, if any, on which the Rights may be redeemed, to have impressed
on, printed on, written on or otherwise affixed to them the following legend:
This certificate also entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between the Company
and American Stock Transfer & Trust Company as Rights Agent as the same
shall be amended from time to time (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 set
forth in the Rights Agreement, Rights issued to, or held by, any Person
who is, was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement)
or certain transferees of any thereof, whether currently held by or on
behalf of such Person or by any subsequent holder, may be limited as
provided in Section 7(f) of the Rights Agreement.
With respect to such certificates containing the foregoing
legend, until the Distribution Date, the Rights associated with Common Stock
represented by such certificates shall be evidenced by such certificates alone,
and the surrender for transfer of any such certificates shall also constitute
the transfer of the Rights associated with the Common Stock represented by such
certificate.
(d) Until the Distribution Date, the surrender for
transfer of any of the certificates for Common Stock outstanding on or after the
Rights Record Date, with or without a copy of the Summary of Rights attached
thereto and with or without the legend set forth in subsection (c) above, shall
also constitute the transfer of the Rights associated with such Common Stock.
After the Distribution Date, the Rights will be evidenced solely by the Right
Certificates.
Section 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of assignment
and certification and of election to purchase shares to be printed on the
reverse thereof) shall be in substantially the form of Exhibit A hereto and may
have such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and
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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.
(b) Any Right Certificate issued pursuant to Section 3(a)
or Section 22 that represents Rights Beneficially Owned by: (i) an Acquiring
Person or any Associate or Affiliate of any Acquiring Person, (ii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in such
Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights, or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(f), and any Right Certificate
issued pursuant to Section 6 or Section 11 upon transfer, exchange, replacement
or adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible and reasonably identifiable as such) the
following legend:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as
such terms are defined in the Rights Agreement) or certain
transferees thereof. Accordingly, under certain circumstances
as provided in the Rights Agreement, this Right Certificate
and the Rights represented hereby may be limited as provided
in Section 7(f) of such Agreement.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of
the Company by its Chairman of the Board, its President or any of its Vice
Presidents, either manually or by facsimile signature, and have affixed thereto
the Company's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be manually countersigned by
the Rights Agent and shall not be valid for any purpose unless so countersigned.
In case any officer of the Company who shall have signed any of the Right
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
issued and delivered with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate, shall be a
proper officer (as specified above) of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such person was not such an officer.
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(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each Right Certificate, the date of each
Right Certificate and the number of each Right Certificate.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE
OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section
7(f) and Section 14, at any time after the Close of Business on the
Distribution Date, and prior to the Close of Business on the Expiration Date
or the day prior to the day, if any, on which the Rights are to be redeemed
pursuant to Section 23, any Right Certificate or Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase such number
of Units as the Right Certificate or Right Certificates surrendered then
entitled such holder to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Right Certificate shall make such request
in writing delivered to the Rights Agent, and shall surrender the Right
Certificate(s) to be transferred, split up, combined or exchanged, with the
form of assignment on the reverse side(s) thereof duly completed and
executed, at the stock transfer office of the Rights Agent. Thereupon the
Rights Agent shall countersign and deliver to the persons entitled thereto
the Right Certificate(s) requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates. Notwithstanding the foregoing, neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Right Certificate unless and until the
registered holder shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Right Certificate and
shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request.
(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 Right 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 Right Certificate, if mutilated, the Company will execute and deliver
a new Right Certificate of like tenor to the Rights Agent for delivery to the
registered owner in lieu of the Right Certificate so lost, stolen, destroyed
or mutilated.
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE;
EXPIRATION DATE OF RIGHTS.
(a) Subject to Section 7(f), and unless earlier
redeemed as provided in Section 23, the registered holder of any Right
Certificate may exercise the Rights evidenced thereby in whole or in part at
any time after the Distribution Date upon surrender of the Right Certificate,
with the form of election to purchase on the reverse side thereof duly
completed and executed, to the Rights Agent at the stock transfer office of
the Rights Agent, together with payment of the
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Purchase Price for each Unit as to which the Rights are exercised, at or
prior to the Close of Business on the tenth anniversary of the Rights Record
Date or such other date to which the Rights may be extended as provided in
this Agreement (the latest of such dates being herein referred to as the
"Expiration Date"). If at any time after the Distribution Date but prior to
the Expiration Date the Company is unable, under its Certificate of
Incorporation, to issue the number and class of shares required to be issued
upon the exercise of all of the outstanding Rights, the Company may issue
upon exercise of any of the Rights shares of capital stock or other
securities of the Company of equivalent value to the shares so required to be
issued ("Equivalent Stock"), as determined by the Board of Directors.
(b) The Purchase Price for each Unit pursuant to the
exercise of a Right shall initially be $625.00, shall be subject to
adjustment from time to time as provided in Sections 11 and 13 and shall be
payable in lawful money of the United States of America.
(c) Upon receipt of a Right Certificate, with the form
of election to purchase duly executed, accompanied by payment of the Purchase
Price for the Units to be purchased and an amount equal to any applicable
transfer tax in cash, or by certified check, bank draft or money order
payable to the order of the Company, the Rights Agent shall thereupon
promptly (i) requisition from the Company or any transfer agent of the
Company a certificate for the number of shares to be purchased and the
Company will comply, and hereby irrevocably authorizes its transfer agent to
comply, with all such requests, (ii) requisition from the Company the amount
of cash to be paid in lieu of issuance of a fractional share, when
appropriate, in accordance with Section 14, and (iii) promptly after receipt
of such certificate from any such transfer agent, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and, when appropriate, after receipt promptly deliver such cash in
lieu of a fractional share to or upon the order of the registered holder of
such Right Certificate; provided, however, that in the case of the purchase,
in connection with the exercise of a Right, of securities other than shares
of stock, the Rights Agent shall promptly take the appropriate actions with
respect thereto as shall as nearly as practicable correspond to the actions
described in the foregoing clauses (i) through (iii).
(d) The Company shall not be required to pay any
transfer tax which may be payable in respect of any transfer involved in the
transfer or delivery of Right Certificates, or the issuance or delivery of
certificates in a name other than that of the registered holder of the Right
Certificate evidencing Rights surrendered for exercise, or to issue or
deliver any certificates upon the exercise of any Rights, until any such tax
shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
(e) In case the registered holder of any Right
Certificate shall exercise less than all the Rights evidenced thereby, a new
Right Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Right Certificate or to his duly authorized assigns, subject to the
provisions of Section 14.
(f) Notwithstanding any provision of this Agreement to
the contrary, upon the occurrence of any of the events described in any of
clauses (A), (B), (C) or (D) of Section
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11(a)(ii), the adjustment provided for under Section 11(a)(ii) shall not
apply with respect to any Rights that are at the time of the occurrence of
such event Beneficially Owned by (i) an Acquiring Person or by any Associate
or Affiliate of such Acquiring Person (which Acquiring Person or Affiliate or
Associate engages in, or realizes the benefit of, one or more of the
transactions described in clause (A) or clause (B) of Section 11(a)(ii),
realizes the benefits set forth in clause (C) of Section 11(a)(ii) or, alone
or together, become the Beneficial Owner(s) of a number of shares of Voting
Stock which equals or exceeds the percentage of the general voting power as
provided in clause (D) of Section 11(a)(ii), as the case may be), or (ii) a
transferee of an Acquiring Person or of any Associate or Affiliate of such
Acquiring Person (which Acquiring Person or Associate or Affiliate engages
in, or realizes the benefit of, one or more of the transactions described in
clause (A) or clause (B) of Section 11(a)(ii), realizes the benefits set
forth in clause (C) of Section 11(a)(ii) or, alone or together with such
Acquiring Person or any such Associate or Affiliate, become the Beneficial
Owner(s) of a number of shares of Voting Stock which equals or exceeds the
percentage of the general voting power as provided in clause (D) of Section
11(a)(ii), as the case may be) (A) who becomes a transferee after the
Acquiring Person becomes such, or (B) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights
pursuant to either (1) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (2) a
transfer which the Board of Directors of the Company has determined is part
of a plan, arrangement or understanding which has as a primary purpose or
effect the avoidance of this Section 7(f). Upon the exercise of such Rights,
the holders thereof shall be entitled to receive, upon payment of the
Purchase Price, the number of Units issuable upon exercise of such Rights
without giving effect to the adjustment provided for under Section 11(a)(ii).
The Company shall use all reasonable efforts to insure that the provisions of
this Section 7(f) and Section 4(b) are complied with, but shall have no
liability to any holder of Right Certificates or other Person as a result of
its making or failing to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder.
(g) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence
of any purported exercise as set forth in this Section 7 unless such
registered holder shall have (i) completed and signed the certificate
contained in the form of election to purchase set forth on the reverse side
of the Right Certificate surrendered for such exercise, and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company shall
reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT
CERTIFICATES. All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by 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 Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all
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cancelled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Right Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF SHARES;
REGISTRATION.
(a) The Company covenants and agrees that it shall (i)
on or prior to the Rights Record Date, take all such action as shall be
necessary to cause to be reserved and kept available out of its authorized
and unissued capital stock, the number, class and series of shares that will
be sufficient to permit the exercise in full of all Rights to be outstanding
as of the Rights Record Date, (ii) no later than promptly following the
Distribution Date, take all such action as shall be necessary to cause to be
reserved and kept available out of its authorized and unissued capital stock,
or its authorized and issued shares held in its treasury, the number of
additional shares that will, from time to time, be sufficient to permit the
exercise in full of all Rights from time to time outstanding, (iii) take all
such action as may be necessary to insure that all shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for
such shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable, and (iv) pay when due
and payable any and all federal and state transfer taxes and charges which
may be payable in respect of the issuance or delivery of the Right
Certificates or of any shares upon the exercise of Rights (except as
otherwise provided in Section 7(d)).
(b) The Company agrees to take all such action, from
and after the Distribution Date, as may be necessary or appropriate to permit
the issuance of shares in connection with the exercise of the Rights,
including any required registration under (i) the Securities Act of 1933, as
amended from time to time (the "Securities Act"), and (ii) the securities or
"blue sky" laws of the various states. The Company may temporarily suspend,
for a period of time not to exceed 90 days, the exercisability of the Rights
in order to prepare and file a registration statement or statements for the
purpose of effecting any such registration and permit such statement(s) to
become effective. At the commencement and termination of any such suspension,
the Company shall issue a public announcement and shall provide written
notice to the Rights Agent, stating that the exercisability of the Rights has
been temporarily suspended, or that such suspension has terminated, as the
case may be.
(c) If and so long as the stock issuable upon the
exercise of Rights is listed on any national securities exchange, the Company
shall use its reasonable efforts to cause all shares reserved for issuance
upon exercise of Rights to be listed on such exchange upon official notice of
issuance upon such exercise.
Section 10. RECORD DATE. Each Person in whose name any
stock certificate is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable transfer taxes) was made.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a stockholder of the
Company with respect to shares for which the Rights shall be exercisable,
including without limitation the right to vote or to receive dividends or
other distributions, and
10
such holder shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF
SHARES OR NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares
or other securities covered by each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided in this
Section 11.
(a) (i) If the Company shall at any time after the
date of this Agreement (A) declare and pay a dividend on the shares which are
subject to the Rights ("Subject Shares") payable in shares of stock of the
Company, (B) subdivide or split the Subject Shares, (C) combine or
consolidate the Subject Shares into a smaller number of shares or effect a
reverse stock split of the Subject Shares or (D) issue any shares of its
capital stock in a reclassification of the Subject Shares (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, and in each such
event, except as otherwise provided in this Section 11(a), the Purchase Price
in effect at the time of the record date for such dividend or of the
effective date of such subdivision, split, reverse split, combination,
consolidation or reclassification, and the number and kind of shares of
capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if
such Right had been exercised immediately prior to such date and at a time
when the transfer books of the Company were open, he would have received upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, split, reverse split, combination, consolidation or
reclassification. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for
in this Section 11(a)(i) shall be in addition to, and shall be made prior to,
any adjustment required pursuant to Section 11(a)(ii).
(ii) If at any time after the date of this
Agreement
(A) any Acquiring Person, or any
Associate or Affiliate of any Acquiring Person, directly or indirectly (1)
shall merge into the Company or any of its Subsidiaries or otherwise combine
with the Company or any of its Subsidiaries and the Company or such
Subsidiary shall be the continuing or surviving corporation of such merger or
combination and the Common Stock shall remain outstanding and the outstanding
shares thereof shall not be changed into or exchanged for stock or other
securities of the Company or of any other Person or cash or any other
property, or (2) shall sell or otherwise transfer in one or more
transactions, assets to the Company or any of its Subsidiaries in exchange
for 15 percent or more of the shares of any class of capital stock of the
Company or any of its Subsidiaries, and the Common Stock shall remain
outstanding and unchanged, or
(B) directly or indirectly, any
Acquiring Person, or any Associate or Affiliate of any Acquiring Person,
shall (1) in one or more transactions, transfer any assets to the Company or
any of its Subsidiaries in exchange (in whole or in part) for shares of any
class of capital stock of the Company or any of its Subsidiaries or for
securities exercisable for or convertible into shares of any class of capital
stock of the Company or any of its Subsidiaries or otherwise obtain from the
Company or any of its Subsidiaries, with or without
11
consideration, any additional shares of any class of capital stock of the
Company or any of its Subsidiaries or other securities exercisable for or
convertible into shares of any class of capital stock of the Company or any
of its Subsidiaries (other than as part of a pro rata distribution by the
Company or such Subsidiary to all holders of Common Stock), (2) sell,
purchase, lease, exchange, mortgage, pledge, transfer or otherwise dispose
(in one or more transactions), to, from or with, as the case may be, the
Company or any of its Subsidiaries, assets on terms and conditions less
favorable to the Company or such Subsidiary than the Company or such
Subsidiary would be able to obtain in arm's-length negotiation with an
unaffiliated third party, (3) receive any compensation from the Company or
any of the Company's Subsidiaries other than compensation for full-time
employment as a regular employee, or fees for serving as director, at rates
in accordance with the Company's (or its Subsidiaries') past practices, or
(4) receive the benefit, directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or other financial
assistance provided by the Company or any of its Subsidiaries, on terms and
conditions less favorable to the Company or such Subsidiary than the Company
or such Subsidiary would be able to obtain in arm's-length negotiation with
an unaffiliated third party, or
(C) during any such time as there is
an Acquiring Person, there shall be any reclassification of securities
(including any reverse stock split), or recapitalization of the Company, or
any merger or consolidation of the Company with any of its Subsidiaries or
any other similar transaction or series of transactions involving the Company
or any of its Subsidiaries (whether or not with or into or otherwise
involving an Acquiring Person or any Affiliate or Associate of such Acquiring
Person) which has the effect, directly or indirectly, of increasing by more
than one percent the proportionate share of the outstanding shares of any
class of equity securities, or of securities exercisable for or convertible
into equity securities, of the Company or any of its Subsidiaries which is
directly or indirectly owned by any Acquiring Person or any Associate or
Affiliate of any Acquiring Person, or
(D) any Person shall become an
Acquiring Person otherwise than pursuant to a Qualified Offer,
then, and in each such case, but subject to the provisions of Section 27,
proper provision shall be made so that each holder of a Right, except as
provided below and in Section 7(f), shall, on and after the later of (I) the
date of the occurrence of an event described in clause (A), (B), (C) or (D)
of this Section 11(a)(ii), or (II) the date of the expiration of the period
within which the Rights may be redeemed pursuant to Section 23 (as the same
may have been amended as provided in Section 26), have the right to receive,
upon exercise thereof at the then current Purchase Price, such number of
shares of Common Stock as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the then number of Units for which a Right
is then exercisable and dividing that product by (y) 50 percent of the
current market price per share of Common Stock (determined in accordance with
Section 11(d)) on the date of the occurrence of the relevant event listed
above in clause (A), (B), (C) or (D) of this subparagraph (ii); PROVIDED,
HOWEVER, that if the transaction that would otherwise give rise to the
foregoing adjustment is also subject to the provisions of Section 13, then
only the provisions of Section 13 shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii). The Company shall not consummate any such
merger, combination, transfer or transaction referred to in any of such
clauses (A), (B) and (C) unless prior thereto there shall be sufficient
authorized but unissued Common Stock to
12
permit the exercise in full of the Rights in accordance with the foregoing
sentence, unless the Board of Directors has determined to issue Equivalent
Stock in accordance with Section 7(a); PROVIDED, HOWEVER, that in no case may
the Company consummate any such merger, combination, transfer or transaction
if at the time of or immediately after such transaction there are any rights,
warrants or other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights.
If the Company issues Equivalent Stock upon the exercise of
any Rights pursuant to the immediately preceding paragraph, then, upon any
such exercise, proper provision shall be made so that the holder of a Right
(except as provided in Section 7(f)) shall have the right to receive, upon
such exercise at the then current Purchase Price, such number of shares or
other units of Equivalent Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the number of
Units for which a Right is then exercisable and dividing that product by (y)
50 percent of the current market price per share or other unit of the
Equivalent Stock of the Company (determined on substantially the same basis
as is prescribed by Section 11(d) with respect to the valuation of Common
Stock) on the date of occurrence of the relevant event listed above in clause
(A), (B), (C) or (D) of this subparagraph (ii). If at any time the Company
should be prohibited by law, by any provision of its Certificate of
Incorporation, or by any instrument or agreement to which the Company is a
party or by which it is bound, from issuing, or should be unable under its
Certificate of Incorporation to issue, sufficient Equivalent Stock to permit
the exercise of all outstanding Rights in accordance with the foregoing
sentence, then, in lieu of issuing such Equivalent Stock upon such exercise,
the Company shall pay to each holder of a Right (except as provided in
Section 7(f)) upon surrender of the Right as provided herein but without
payment of the Purchase Price, an amount in cash for each Right equal to the
Purchase Price.
(b) In case the Company shall at any time after the
Rights Record Date fix a record date for the issuance of rights or warrants
to all holders of Common Stock or Subject Shares entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for or
purchase Common Stock or Subject Shares or securities convertible into Common
Stock or Subject Shares at a price per share (or having a conversion price
per share, if a security convertible into Common Stock) less than the current
market price per share (determined in accordance with Section 11(d)) on such
record date, the Purchase Price to be in effect after such record date shall
be determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, of which the numerator shall be the total
number of shares of Common Stock and Subject Shares outstanding on such
record date plus the number of shares of Common Stock which the aggregate
offering price of the total number of shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and of which the
denominator shall be the total number of shares of Common Stock and Subject
Shares outstanding on such record date plus the number of additional shares
to be offered for subscription or purchase (or into which the convertible
securities to be offered are initially convertible). In case such
subscription or purchase price may be paid, in whole or in part, in a form
other than cash, the value of such consideration shall be as determined in
good faith by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent. Shares owned
by or held for the account of the Company shall not be deemed outstanding for
the
13
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and if such rights or warrants are not
so issued, the Purchase Price shall be adjusted to be the Purchase Price
which would then be in effect if such record date had not been fixed.
(c) In case the Company shall at any time after the
Rights Record Date fix a record date for the making of a distribution on the
shares of Common Stock or the Subject Shares, whether by way of a dividend,
distribution, reclassification of stock, recapitalization, reorganization or
partial liquidation of the Company or otherwise (and including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing corporation), of subscription rights or warrants
(excluding those referred to in Section 11(b)), evidences of indebtedness or
other assets (other than (i) regular periodic cash dividends, (ii) a dividend
payable in Common Stock or (iii) a distribution which is part of or is made
in connection with a transaction to which Section 11(a)(ii) or Section 13
applies), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, of which the numerator shall be the current
market price per share of Common Stock (determined in accordance with Section
11(d)) on such record date, less the fair market value applicable to one
share of Common Stock (as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a statement filed
with the Rights Agent) of such assets or evidences of indebtedness or of such
subscription rights or warrants so to be distributed, and of which the
denominator shall be such current market price per share of Common Stock.
Such adjustments shall be made successively whenever such a record date is
fixed; and if such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
(d) For the purpose of any computation hereunder, the
"current market price" per share of Common Stock on any date shall be deemed
to be the average of the daily closing prices per share of such Common Stock
for the 30 consecutive Trading Days immediately prior to such date; provided,
however, that if the current market price per share of Common Stock is
determined during a period following the announcement by the issuer of such
Common Stock of a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of Common
Stock (other than the Rights), and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or distribution, then, and in
each such case, the current market price shall be appropriately adjusted to
reflect the current market price per share of Common Stock in connection with
ex-dividend trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the shares of Common Stock are not listed or admitted to
trading on the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to securities listed
on the principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common Stock are
not listed or admitted to trading on any national securities exchange, the
average of the high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Dealers, Inc.,
Automated Quotation System ("NASDAQ"). If on any such date the shares of
Common Stock are not
14
quoted by any such organization, the fair market value of such shares on such
date as determined in good faith by the Board of Directors of the issuer of
such Common Stock shall be used. Any such determination of current market
price shall be described in a statement filed with the Rights Agent.
For the purpose of any computation hereunder, the "current
market price" of a Unit shall be deemed to be equal to the current market
price per share of Common Stock, and the "current market price" of a Subject
Share shall be deemed to be equal to the current market price per share of
Common Stock divided by the number of Subject Shares which comprise a Unit.
For purposes of this Agreement, the term "Trading Day" shall
mean a day on which the principal national securities exchange on which the
shares of Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not listed or
admitted to trading on any national securities exchange, a Business Day.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or decrease of at
least one percent in such Price; provided, however, that any adjustments
which by reason of this Section 11(e) are not required to be made shall be
carried forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or to
the nearest one-thousandth of a share, as the case may be. Notwithstanding
the proviso to the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i)
three years from the date of the transaction which gives rise to such
adjustment or (ii) the date of the expiration of the right to exercise any
Rights.
(f) If at any time, as a result of an adjustment made
pursuant to Section 11(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock of the Company other
than shares of Common Stock, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to
the provisions, with respect to such shares, contained in Sections 11(a)
through (c), inclusive, and the provisions of Sections 7, 9, 10, 13 and 14
with respect to the shares of Common Stock shall apply on like terms to any
such other shares.
(g) All Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price hereunder shall
represent the right to purchase, at the adjusted Purchase Price, the number
of shares purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price,
that number of shares (calculated to the nearest one-thousandth) obtained by
(i) multiplying (x) the number of shares covered by a Right immediately prior
to such adjustment by (y) the Purchase Price in effect immediately prior to
such adjustment of the Purchase Price and (ii) dividing the
15
product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of shares purchasable upon the
exercise of each Right. Each of the Rights outstanding after such adjustment
of the number of Rights shall be exercisable for the number of Units for
which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one-thousandth)
obtained by dividing the Purchase Price in effect immediately prior to
adjustment of the Purchase Price by the Purchase Price in effect immediately
after adjustment of the Purchase Price. The Company shall make a public
announcement of its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If Right Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i) the Company shall, as
promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing, subject
to Section 14, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause
to be distributed to such holders of record in substitution and replacement
for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall
be issued, executed and countersigned in the manner provided for herein (and
may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Right
Certificates on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the
Purchase Price or the number of shares issuable upon the exercise of the
Rights, the Right Certificates theretofore and thereafter issued may continue
to express the Purchase Price per share and the number of shares which were
expressed in the initial Right Certificates issued hereunder.
(k) In any case in which this Section 11 requires that
an adjustment in the Purchase Price be made effective as of the 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 additional shares or securities of the Company, if any,
issuable as a consequence of such adjustment; provided, however, that the
Company shall deliver to such holder a due xxxx or other appropriate
instrument evidencing such holder's right to receive such additional shares
or securities upon the occurrence of such event.
(l) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such adjustments in
the number of shares which may be acquired upon exercise of the Rights, and
such adjustments in the Purchase Price, in addition to those adjustments
expressly required by the other subsections of this Section 11, as and to the
extent that the Company, in its sole discretion, shall determine to be
advisable, in order that, if (i) any
16
reclassification, consolidation or subdivision of the Common Stock, (ii) any
reorganization or partial liquidation of the Company or similar transaction,
(iii) any issuance wholly for cash of any Common Stock at less than the
current market price, (iv) any issuance wholly for cash of Common Stock or
securities which by their terms are convertible into or exchangeable for
Common Stock, (v) any stock dividends or (vi) any issuance of rights, options
or warrants, hereafter made by the Company to holders of its Common Stock as
provided herein-above in this Section 11, (x) the holders of the Rights in
any such event shall be treated equitably and in accordance with the purpose
and intent of this Agreement, and (y) to the extent reasonably possible, such
event shall not, in the opinion of counsel for the Company, result in the
stockholders of the Company being subject to any United States federal income
tax liability by reason thereof.
Section 12. CERTIFICATION OF ADJUSTED PURCHASE PRICE OR
NUMBER OF SHARES. Whenever an adjustment is made as provided in Section 11 or
13, the Company shall (i) promptly prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such
adjustment, (ii) promptly file with the Rights Agent and with each transfer
agent for the Common Stock a copy of such certificate, and (iii) mail a brief
summary thereof to each holder of a Right Certificate 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, the requirement for such adjustment.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
(a) If, at any time after an Acquiring Person has
become such,
(i) the Company shall consolidate with, or
merge with and into, any other Person and the Company shall not be the
continuing or surviving corporation of such consolidation or merger,
(ii) any other Person(s) shall consolidate or
merge with and into the Company, the Company shall be the continuing or
surviving corporation of such merger and, in connection with such
consolidation or merger, all or part of the Common Stock shall be changed
into or exchanged for stock or other securities of the Company or of any
other Person or cash or any other property, or
(iii) the Company shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating
more than 50 percent of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person, (other than a pro rata
distribution by the Company of assets (including securities) of the Company
or any of its Subsidiaries to all holders of the Company's Common Stock),
then, on and after the later of (I) the date of the occurrence of an event
described in clause (i), (ii) or (iii) of this Section 13(a), or (II) the
date of the expiration of the period within which the Rights may be redeemed
pursuant to Section 23 (as the same may have been amended as provided in
Section 26):
17
(A) proper provision shall be made so
that each holder of a Right shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price, such number of shares of
common stock of the Principal Party as shall be equal to the result obtained by
(x) multiplying the then current Purchase Price by the number of Units for which
a Right is then exercisable and dividing that product by (y) 50 percent of the
current market price per share of the common stock of the Principal Party
(determined in the same manner as the current market price of Common Stock is
determined under Section 11(d)) on the date of consummation of such
consolidation, merger, sale or transfer;
(B) the Principal Party shall
thereafter be liable for, and shall assume, by virtue of such consolidation,
merger, sale or transfer, all the obligations and duties of the Company pursuant
to this Agreement, and proper provision shall be made for the foregoing,
provided that the Principal Party shall, prior to the first occurrence of an
event described in clause (i), (ii) or (iii) of this Section 13(a), have caused
to be reserved out of its authorized and unissued shares of common stock (or its
authorized and issued shares of common stock held in its treasury), for issuance
pursuant to this Agreement, the number of shares of common stock that will be
sufficient to permit the exercise in full of the Rights after the occurrence of
such event;
(C) the term "Company" wherever used in
this Agreement shall thereafter be deemed to refer to such Principal Party; and
(D) the Principal Party shall, in
addition to the reservation of shares of its common stock as provided in the
proviso to clause (B) above, take such steps (including without limitation
compliance with the Company's other obligations as set forth in Section 9) in
connection with such consummation as may be necessary to assure that the
provisions hereof 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; provided, however, that, upon the subsequent
occurrence of any merger, consolidation, sale of all or substantially all
assets, recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the Purchase Price, such cash, shares, rights, warrants and other
property which such holder would have been entitled to receive had such holder,
at the time of such transaction, owned the shares of common stock of the
Principal Party purchasable upon the exercise of a Right, and such Principal
Party shall take such steps (including, but not limited to, reservation of
shares of stock) as may be necessary to permit the subsequent exercise of the
Rights in accordance with the terms hereof for such cash, shares, rights,
warrants and other property.
(b) For purposes of this Agreement, "Principal Party"
shall mean
(i) in the case of any transaction described in
clause (i) or (ii) of Section 13(a), (A) the Person that is the issuer of the
securities into which shares of Common Stock are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer the common
stock of which has the greatest market value, or (B) if no securities are so
issued, (x) the Person that is the other party to the merger or consolidation
and that survives said merger or consolidation, or, if there is more than one
such Person, the Person the common stock of which has the greatest market value
or (y) if the Person that is the other party to the merger or
18
consolidation does not survive the merger or consolidation, the Person that
does so survive (including the Company if it survives); and
(ii) in the case of any transaction described in
clause (iii) of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions 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 be determined, whichever of such Persons is the
issuer of common stock having the greatest market value of shares outstanding;
PROVIDED, HOWEVER, that in any such case, (1) 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 another corporation the common stock of which
is and has been so registered, "Principal Party" shall refer to such other
corporation; (2) if the common stock of such Person is not and has not been so
registered and such Person is not a direct or indirect Subsidiary of another
corporation the common stock of which is and has been so registered, "Principal
Party" shall refer to the corporation which ultimately controls such Person; (3)
in case such Person is a Subsidiary, directly or indirectly, of more than one
corporation, the common stocks of all of which are and have been so registered,
"Principal Party" shall refer to whichever of such corporations is the issuer of
common stock having the greatest market value of shares held by the public; and
(4) if the common stock of such Person is not and has not been so registered and
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 in clauses (1), (2) and (3) above shall 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
Party in each such chain shall bear the obligations set forth in this Section 13
in the same ratio as its direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless prior thereto the Company and the
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement making valid provision for the results described in
clause (A) of Section 13(a) and confirming that the Principal Party will perform
its obligations under this Section 13(a); provided, however, that in no case may
the Company consummate any such consolidation, merger, sale or transfer if (i)
at the time of or immediately after such transaction there are any rights,
warrants or other instruments or securities outstanding or agreements in effect
which would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (ii) prior to, simultaneously with or
immediately after such transaction, the stockholders of the Person which
constitutes, or would constitute, the Principal Party for purposes of this
Section 13 shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates.
(d) The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales or other transfers. This
Section 13 shall not be applicable to a transaction described in Subparagraphs
(i), (ii) or (iii) of Subsection (a) of this Section if (i) such transaction is
consummated with a Person or Persons who acquired Common Stock pursuant to a
Qualified Offer (or a wholly owned subsidiary of any such Person or Persons),
(ii) the price per share of Common Stock offered in such transaction or
distributable to stockholders upon
19
conclusion of such transaction is not less than the price per share of Common
Stock paid to all holders of Common Stock whose shares were purchased
pursuant to such Qualified Offer and (iii) the form of consideration being
offered to the remaining holders of Common Stock pursuant to such transaction
or distributable to stockholders upon conclusion of such transaction is the
same as the form of consideration paid pursuant to such Qualified Offer. Upon
conclusion of any transaction described in the foregoing sentence, all Rights
shall expire.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions
of Rights or to distribute Right Certificates which evidence fractional Rights.
If the Company shall elect not to issue such fractional Rights, in lieu of such
fractional Rights, there shall be paid to the registered holders of the Right
Certificates with regard to which such Fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the average
of the high bid and low asked prices in the over-the-counter market, as reported
by NASDAQ. If on any such date the Rights are not quoted by any such
organization, the fair value of the Rights on such date as determined in good
faith by the Board of Directors of the Company shall be used. Any such
determination of current market value shall be described in a statement filed
with the Rights Agent.
(b) The Company shall not be required to issue fractions
of shares upon exercise of a Right or to distribute certificates which evidence
fractional shares. In lieu of fractional shares, the Company shall pay to the
registered holders of Right Certificates at the time such Right Certificates are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of a share of Common Stock. For purposes of this Section
14, the current market value of a share of Common Stock shall be the closing
price of a share of Common Stock (as determined pursuant to the second sentence
of Section 11(d)) for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right by the acceptance thereof
expressly waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right.
Section 15. RIGHTS OF ACTION. All rights of action in respect
of this Agreement are vested in the respective registered holders of the Right
Certificates (and prior to the Distribution Date, the registered holders of the
Common Stock), and any registered holder of any Right Certificate (or, prior to
the Distribution Date, any registered holder of the Common Stock), without the
consent of the Rights Agent or of the holder of any other Right Certificate (or,
prior
20
to the Distribution Date, any other registered holder of the Common Stock),
may, on his own behalf and for his own benefit, enforce, and may institute
and maintain, any suit, action or proceeding against the Company to enforce,
or otherwise act in respect of, his right to exercise the Rights evidenced by
such Right Certificate in the manner provided in such Right Certificate and
in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this
Agreement and will be entitled to specific performance of the obligations
under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Agreement.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a
Right by accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) on and after the Distribution Date, the Right
Certificates will be transferable only on the registry books of the Rights Agent
and then if surrendered at the 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 the Right 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 Right Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Right Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of Common Stock
or any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) 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
21
and execution of this Agreement and the exercise and performance of its
duties hereunder. The Company also agrees to indemnify the Rights Agent for,
and to hold it harmless against, any loss, liability, or expense incurred,
without negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur
no liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Right
Certificate or Certificate for Common Stock or for other securities of the
Company, instrument of assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate, statement, or other
paper or document believed by it, acting with reasonable care, to be genuine and
to be signed, executed and, where necessary, verified or acknowledged, by the
proper person or persons.
If and for so long as the Rights are listed on the New York
Stock Exchange or the American Stock Exchange, the Rights Agent, if its
principal offices are located outside New York City, shall maintain in the New
York City area facilities for the servicing of the Rights in the area of
Manhattan located south of Xxxxxxxx Street. Such facilities may consist of
either an office or agency where transactions in the Rights are serviced
directly or a "drop" where Common Stock certificates, Right Certificates, and
other instruments relating to transactions in Rights may be received for
redelivery to an office or agency outside New York City, all in accordance with
the applicable rules of the stock exchange on which the Rights are listed.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21. In
case at the time such successor Rights Agent shall succeed to the agency created
by this Agreement any of the Right Certificates shall have been countersigned
but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned, and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned, and in
case at that time any of the Right Certificates shall not have been
22
countersigned, the Rights Agent may countersign such Right Certificates
either in its prior name or in its changed name, and in all such cases such
Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the President,
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
its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason
of any of the statements of fact or recitals contained in this Agreement or in
the Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof), nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Right
Certificate, nor shall it be responsible for any adjustment required under the
provisions of Section 11 or 13 or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice of any such adjustment), nor
shall it by any act hereunder be deemed to make any representation or warranty
as to the authorization or reservation of any shares of stock to be issued
pursuant to this Agreement or any Right Certificate or as to whether any shares
of stock 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
23
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 of the Board, the President, 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.
(h) The Rights Agent and any stockholder, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, provided reasonable care was exercised in
the selection and continued employment thereof.
(j) If, with respect to any Right 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 obtaining the
Company's approval.
Section 21. CHANGE OF RIGHTS AGENT. Unless the Company and
the Rights Agent agree to a shorter time period, the Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon 15 days' notice in writing mailed to the Company and to each
transfer agent of Common Stock by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. Unless the Company and
the Rights Agent agree to a shorter time period, the Company may remove the
Rights Agent or any successor Rights Agent upon 15 days' notice in writing,
mailed to the Rights Agent or successor Rights Agent, as the case may be, and to
each transfer agent of Common Stock by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 15 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 the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the Company),
then the registered holder of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of the State of California (or of any other state of the United States
24
so long as such corporation is authorized to do business as a banking
institution in the State of California) in good standing, having a stock
transfer office in the State of California, which is authorized under such
laws to exercise stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$100,000,000. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed, but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not
later than the effective date of any such appointment, the Company shall file
notice thereof in writing with the predecessor Rights Agent and each transfer
agent of Common Stock and mail a notice thereof in writing to the registered
holders of the Right Certificates. Failure to give any notice provided for in
this Section 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 RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Expiration Date, the Purchase Price per
share or the number or kind or class of shares of stock or other securities or
property purchasable under the Right Certificates made in accordance with the
provisions of this Agreement.
Section 23. REDEMPTION.
(a) The Board of Directors of the Company may, at its
option and as provided herein, and notwithstanding the provisions of Sections 11
and 13 of this Agreement, elect to redeem all but not less than all of the then
outstanding Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend, reclassification or similar
transaction occurring after the date hereof (such redemption price being herein
referred to as the "Redemption Price") at any time up to the Close of Business
on a Stock Acquisition Date.
(b) Immediately upon the action of the Board of Directors
of the Company electing to redeem the Rights, the Company shall make a public
announcement thereof, and from and after the date of such announcement, 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. As soon as practicable after the
election of the Board of Directors to redeem the Rights, the Company shall give
notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made.
Section 24. NOTICE OF PROPOSED ACTIONS. In case the
Company, after the Rights become exercisable, shall propose (i) to pay any
dividend payable in stock of any class to the holders of its Common Stock or the
Subject Shares or to make any other distribution to the
25
holders of its Common Stock or Subject Shares (other than a regular periodic
cash dividend), or (ii) to offer to the holders of its Common Stock or
Subject Shares rights or warrants to subscribe for or to purchase any
additional shares of Common Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any reclassification
of its Common Stock or Subject Shares (other than a reclassification
involving only the subdivision of outstanding shares of Common Stock) or any
recapitalization or reorganization of the Company, or (iv) to effect any
consolidation or merger into or with, or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or other
transfer), in one or more transactions, of more than 50 percent of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to,
any other Person, or (v) to effect the liquidation, dissolution or winding up
of the Company, then, in each such case, the Company shall give to each
holder of a Right, in accordance with Section 25, a notice of such proposed
action, which shall specify the record date for the purposes of such
dividend, distribution of rights or warrants, or the date on which such
reclassification, recapitalization, reorganization, consolidation, merger,
sale, transfer, liquidation, dissolution or winding up is to take place and
the date of participation therein by the holders of Common Stock and/or
Subject 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 (i) or (ii) above at least
twenty days prior to the record date for determining holders of the Common
Stock and/or Subject Shares for purposes of such action, and in the case of
any such other action, at least twenty days prior to the date of the taking
of such proposed action or the date of participation therein by the holders
of Common Stock and/or Subject Shares, whichever shall be the earlier. The
failure to give notice required by this Section 24 or any defect thereon
shall not affect the legality or validity of the action taken by the Company
or the vote upon any such action.
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 Right
Certificate to or on the Company shall be sufficiently given or made if sent by
courier, facsimile, or first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:
Power-One, Inc.
000 Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Chairman of the Board and CEO
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 Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by courier, facsimile or first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx
26
Notices or demands authorized by this Agreement to be given
or made by the Company or the Rights Agent to or on the holder of any Right
Certificate shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 26. SUPPLEMENTS AND AMENDMENTS. Prior to the
Distribution Date and subject to the penultimate sentence of this Section 26,
the Company and the Rights Agent shall, if the Company so directs, supplement
or amend any provision of this Agreement without the approval of any holders
of certificates representing shares of Common Stock. From and after the
Distribution Date and subject to the penultimate sentence of this Section 26,
the Company and the Rights Agent shall, if the Company so directs, supplement
or amend this Agreement without the approval of any holders of Right
Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten or lengthen
any time period, or (iv) to change or supplement the provisions hereof in any
manner which the Company may deem necessary or desirable and which shall not
adversely affect the interests of the holders of Right Certificates;
provided, however, this Agreement may not be supplemented or amended to
lengthen, pursuant to clause (iii) of this sentence, (A) a time period
relating to when the Rights may be redeemed at such time as the Rights are
not then redeemable, or (B) any other time period, unless such lengthening is
for the purpose of protecting, enhancing or clarifying the rights of, and/or
the benefits to, the holders of Rights. Upon the delivery of a certificate
from an appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 26,
the Rights Agent shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary: (1) no supplement or
amendment shall be made which changes the Redemption Price, the Purchase
Price or the number of shares or Units for which a Right is exercisable; and
(2) the duration of the Rights may not be shortened without the written
consent of the registered holders thereof (other than by a redemption of the
Rights pursuant to Section 23). Prior to the Distribution Date, the interests
of the holders of Rights shall be deemed coincident with the interests of the
holders of Common Stock.
Section 27. EXCHANGE.
(a) The Board of Directors of the Company may, at its
option, at any time after any Person becomes an Acquiring Person, exchange
all or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become subject to the provisions of Section 7(f)
hereof) for Common Stock at an exchange ratio of one share of Common Stock
per Right, appropriately adjusted to reflect any stock split, stock dividend
or similar transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio").
(b) Immediately upon the action of the Board of
Directors of the Company ordering the exchange of any Rights pursuant to
subsection (a) of this Section and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that number of
shares of Common Stock equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give public
notice of any such exchange;
27
provided, however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company promptly shall
mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the Common Stock
for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than Rights which have
become subject to the provisions of Section 7(f) hereof) held by each holder
of Rights.
(c) If there shall not be sufficient authorized Common
Stock to permit an exchange of Rights as contemplated in accordance with this
Section, the Company shall take all such action as may be necessary to authorize
additional Common Stock or Equivalent Stock for issuance upon exchange of the
Rights.
Section 28. 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 29. DETERMINATION AND ACTIONS TAKEN BY THE BOARD OF
DIRECTORS. For all purposes of this Agreement, any calculation of the number of
shares of Common Stock (or other applicable securities hereunder) outstanding at
any particular time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock (or other securities) of
which any Person is the Beneficial Owner, shall be made in accordance with the
last sentence of Rule 13d-3(d)(1)(i) (as in effect on the date of this
Agreement) of the General Rules and Regulations under the Exchange Act. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to such Board or to the Company, or as may be necessary or advisable in
the administration of this Agreement, including without limitation the right and
power to (i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including a determination to redeem or not redeem the Rights or to
amend the Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (B) below, all omissions with
respect to the foregoing) which are done or made by the Board in good faith,
shall (A) be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties, and (B) not subject the Board to
any liability to the holders of the Rights.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this
Agreement shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the holders of Common Stock) any legal or equitable
right, remedy or claim under this Agreement. This Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, the
holders of Common Stock).
Section 31. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State
28
applicable to contracts to be made and performed entirely within such State.
The rights and obligations of the Rights Agent under this Agreement shall be
governed by and construed in accordance with the laws in effect in the State
of Delaware.
Section 32. COUNTERPARTS. This Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. SECTION HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 34. SEVERABILITY. If any term, provision, covenant
or restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, illegal, or unenforceable, (i) such invalid,
illegal or unenforceable term, provision, covenant or restriction shall
nevertheless be valid, legal and enforceable to the extent, if any, provided by
such court or authority, and (ii) the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force and
effect and shall in no way be affected, impaired or invalidated.
29
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
POWER-ONE, INC.:
/s/ Xxxxxx X. Xxxxxxx
--------------------------------------------
By: Xxxxxx X. Xxxxxxx
----------------------------------------
Title: Chairman and Chief Executive Officer
-------------------------------------
AMERICAN STOCK TRANSFER & TRUST COMPANY:
/s/ Xxxxxxx X. Xxxxxx
--------------------------------------------
By: Xxxxxxx X. Xxxxxx
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Title: Vice President
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S-1
EXHIBIT A
[Form of Right Certificate]
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER PUBLIC ANNOUNCEMENT OF REDEMPTION IS
MADE. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.01 PER RIGHT ON THE TERMS SET FORTH IN THE AGREEMENT. IF THE RIGHTS
REPRESENTED BY THIS CERTIFICATE ARE ISSUED TO A PERSON WHO IS AN ACQUIRING
PERSON OR AN ASSOCIATE OR AFFILIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) OR CERTAIN TRANSFEREES THEREOF, THIS RIGHT CERTIFICATE AND
THE RIGHTS REPRESENTED HEREBY MAY BE SUBJECT TO CERTAIN LIMITATIONS IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7 OF THE RIGHTS AGREEMENT.
RIGHT CERTIFICATE
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 July 27, 2000 (the "Rights
Agreement"), between Power-One, Inc., a Delaware corporation (the "Company"),
and American Stock Transfer & Trust Company (the "Rights Agent"), to purchase
from the Company, unless the Rights have been previously redeemed, at any
time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to the Expiration Date (as such term is defined in the
Rights Agreement), or the date, if any, on which the Rights evidenced by this
Certificate may be redeemed, at the stock transfer office of the Rights
Agent, or its successors as Rights Agent, one one-thousandth of a fully paid
and nonassessable share of Junior Participating Preferred Stock ("Preferred
Shares"), at a purchase price of $625.00 (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly completed and executed. The number of Rights
evidenced by this Right Certificate as set forth above (and the number of
shares which may be purchased upon exercise thereof), and the Purchase Price
set forth above, are the number and Purchase Price as of the date of the
Rights Agreement based on the shares of Common Stock of the Company as
constituted at such date.
Upon the occurrence of an event described in clause (A),
(B), (C) or (D) of Section 11(a)(ii) of the Rights Agreement, the holder of
any Rights that are, or were, beneficially owned by an Acquiring Person or an
Associate or Affiliate thereof (as such terms are defined in the Rights
Agreement) or certain transferees thereof which engaged in, or realized the
benefit of, an event or transaction or transactions described in clause (A),
(B), (C) or (D) of such Section 11(a)(ii), shall not be entitled to the
benefit of the adjustment described in such Section 11(a)(ii).
As provided in the Rights Agreement, the Purchase Price and
the number and class of shares which may be purchased upon the exercise of
the Rights evidenced by this Right Certificate are subject to modification
and adjustment upon the happening of certain events.
A-1
This Right Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Right Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under specific circumstances
set forth in the Rights Agreement. Copies of the Rights Agreement are on file
at the above-mentioned office of the Rights Agent and at the principal office
of the Company.
This Right Certificate, with or without other Right
Certificates, upon surrender at the stock transfer office of the Rights Agent
set forth above, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase such number of shares as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder
to purchase. If this Right Certificate shall be exercised in part, the holder
shall be entitled to receive upon surrender hereof another Right Certificate
or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the Company at its
option at a redemption price of $.01 per Right.
No fractional shares will be issued upon the exercise of
any Rights evidenced hereby, but in lieu thereof a cash payment may be made,
as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of shares
or of any other securities of the Company which may at any time be issuable
on the exercise hereof, nor shall anything contained in the Rights Agreement
or herein be construed to confer upon the holder hereof, as such, any of the
rights of a stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
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WITNESS the facsimile signatures of the proper officers of
the Company. Dated as of ________________,_______.
Attest:
__________________________________ By: _________________________
Secretary Title:
Countersigned:
__________________________________
By: ______________________________
Authorized Signature
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED _____________________________ hereby sells,
assigns and transfers unto _____________________________________________________
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint _________________ Attorney
to transfer the within Right Certificate on the books of the within-named
Corporation, with full power of substitution.
Dated: ____________, ____ _________________________________
Signature
Signature Guaranteed:
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CERTIFICATE
The undersigned hereby certifies (after due inquiry and to
the best knowledge of the undersigned) by checking the appropriate boxes that:
(1) this Right Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement);
(2) the undersigned [ ] did [ ] did not acquire the
Rights evidenced by this Right Certificate from any Person who is, was or
subsequently became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: ____________, ____ ____________________________________
Signature
Signature Guaranteed:
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NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any
change whatsoever.
A-6
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise the Right Certificate.)
To the Company and the Rights Agent:
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented by this Right Certificate and to
purchase the shares issuable upon the exercise of such Rights and requests
that certificates for such shares be issued in the name of:
Please insert social security
or other identifying number: _____________________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number: _____________________________
_______________________________________________________________________________
(Please print name and address)
_______________________________________________________________________________
Dated: ______________, ____
Signature: _______________________
(Signature must conform in all
respects to name of holder as
specified on the face of this Right
Certificate)
Signature Guaranteed:
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CERTIFICATE
The undersigned hereby certifies (after due inquiry and to
the best knowledge of the undersigned) by checking the appropriate boxes that:
(1) the Rights evidenced by this Right Certificate [ ]
are [ ] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement);
(2) the undersigned [ ] did [ ] did not acquire the
Rights evidenced by this Right Certificate from any person who is, was or
subsequently became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: ____________, ____ ________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or
any change whatsoever.
A-8
EXHIBIT B
SUMMARY OF RIGHTS
On July 26, 2000, the Board of Directors of Power-One, Inc.
(the "Company") declared a distribution of one Right for each outstanding share
of common stock (the "Common Shares") of the Company. The distribution is to be
made as of August 7, 2000 (the "Record Date") to the stockholders of record on
that date. Each Right entitles the registered holder to purchase from the
Company, initially, one one-thousandth of a share of Junior Participating
Preferred Stock ("Preferred Shares") at a price of $625.00 (the "Purchase
Price"), subject to adjustment. The description and terms of the Rights are set
forth in a Rights Agreement between the Company and American Stock Transfer &
Trust Company as Rights Agent. The Rights are designed to protect the Company
from unfair takeovers.
A Preferred Share purchasable upon exercise of the Rights will
be entitled to dividends of 1,000 times the dividends, per share, declared on
the Common Shares and in the event of liquidation will be entitled to a minimum
preferential liquidating distribution of $1,000 per share and an aggregate
liquidating distribution, per share, of 1,000 times the distribution made per
Common Share. The Preferred Shares will vote together with the Common Shares and
in the event of any merger, consolidation or other transaction in which Common
Shares are exchanged, each Preferred Share will be entitled to receive 1,000
times the amount received per Common Share.
Because of the Preferred Shares' dividend and liquidation
rights, the value when issued of the one one-thousandth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
Until the earlier to occur of (i) 10 business days following a
public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired beneficial ownership of 15% or more of the
Company's general voting power other than pursuant to a Qualified Offer (as
defined below), the date of such public announcement being called the "Stock
Acquisition Date," or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors) following the commencement of,
or announcement of an intention to make, a tender offer or exchange offer the
consummation of which would result in the beneficial ownership by a person or
group of 15% or more of the Company's general voting power (the date of such
earlier occurrence being called the "Distribution Date"), the Rights will be
evidenced by the certificates representing the Common Shares and will be
transferred with and only with the Common Shares. New Common Share certificates
issued after the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference, and the
surrender for transfer of any certificate for Common Shares, even without such
notation or a copy of this Summary of Rights being attached thereto, will also
constitute the transfer of the Rights associated with the Common Shares
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights ("Right
Certificates")
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will be mailed to holders of record of the Common Shares as of the close of
business on the Distribution Date and such separate Right Certificates alone
will evidence the Rights.
The Rights are not exercisable until the Distribution Date.
The Rights will expire on the tenth anniversary of the Record Date (the "Final
Expiration Date"), unless the Final Expiration Date is extended or unless the
Rights are earlier redeemed or exchanged by the Company, as described below.
The Purchase Price payable, the number of shares or other
securities or property issuable upon exercise of the Rights, and the number of
outstanding Rights, are subject to adjustment from time to time to prevent
dilution.
A Qualified Offer is a tender offer or exchange offer for all
outstanding Common Shares which is determined by the non-affiliated directors to
be fair to and otherwise in the best interests of the Company and its
shareholders.
If any person becomes an Acquiring Person other than by a
purchase pursuant to a Qualified Offer, proper provision shall be made so that
each holder of a Right, other than Rights beneficially owned by the Acquiring
Person (which will not be entitled to the benefit of such adjustment) will
thereafter have the right to receive upon exercise that number of Common Shares
or Common Share equivalents having a market value of two times the exercise
price of the Right.
If, at any time after an Acquiring Person has become such, the
Company is acquired in a merger or other business combination transaction (other
than a merger which follows a Qualified Offer at the same or a higher price) or
50% or more of its consolidated assets or earning power are sold, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock of the acquiring company
which at the time of such transaction will have a market value of two times the
exercise price of the Right.
At any time after an Acquiring Person has become such, the
Board of Directors of the Company may exchange the Rights (other than Rights
owned by such person or group), in whole or in part, at an exchange ratio of one
Common Share per Right (subject to adjustment).
At any time up to close of business on a Stock Acquisition
Date, the Board of Directors of the Company may redeem the Rights in whole, but
not in part, at a price of $.01 per Right (the "Redemption Price"). Immediately
upon any redemption of the Rights, the right to exercise them will terminate and
the only right of the holders will be to receive the Redemption Price.
The terms of the Rights may be amended by the Board of
Directors without the consent of the holders of the Rights at any time prior to
the Distribution Date. Thereafter the Rights may be amended to make changes
which do not adversely affect the interests of the holders of the Rights, or
which shorten or lengthen time periods, subject to certain limitations set forth
in the Rights Agreement.
B-2
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company.
A copy of the Rights Agreement will be filed with the
Securities and Exchange Commission as an Exhibit to a registration statement on
Form 8-A. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
incorporated herein by reference.
B-3
EXHIBIT C
CERTIFICATE OF DESIGNATIONS
of
JUNIOR PARTICIPATING PREFERRED STOCK
of
POWER-ONE, INC.
Power-One, Inc., a Delaware corporation (the "Corporation"),
hereby certifies that the following resolution has been duly adopted by the
Board of Directors of the Corporation:
RESOLVED, that pursuant to the authority granted to the Board
of Directors of the Corporation by the Restated Certificate of Incorporation, a
series of shares of the Preferred Stock of the Corporation is hereby established
and the number of shares constituting such series and the designation thereof,
and the rights, preferences, privileges and restrictions of the shares of such
series, are fixed and established as follows:
I. DESIGNATION AND AMOUNT
The shares of such series shall be designated as "Junior
Participating Preferred Stock" (the "Junior Preferred Stock") and the number of
shares constituting the Junior Preferred Stock shall be three hundred thousand
(300,000). 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 Junior 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 Junior
Preferred Stock.
II. DIVIDENDS AND DISTRIBUTIONS
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and
superior to the Junior Preferred Stock with respect to dividends, the
holders of shares of Junior Preferred Stock, in preference to the
holders of Common Stock of the Corporation, 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 first 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 Junior
Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share
amount of all cash dividends, and 1,000 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
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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
Junior Preferred Stock. If the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock)
into a greater or lesser number of shares of Common Stock, then in
each such case the amount to which holders of shares of Junior
Preferred Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence shall be adjusted by
multiplying such amount 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 Junior 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, if 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 $1.00 per share on the Junior 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 Junior Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares,
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 Junior 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 Junior 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 Junior Preferred Stock
entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
III. VOTING RIGHTS
The holders of shares of Junior Preferred Stock shall have the
following voting rights:
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(A) Subject to the provision for adjustment hereinafter set forth,
each share of Junior Preferred Stock shall entitle the holder thereof
to 1,000 votes on all matters submitted to a vote of the stockholders
of the Corporation.
(B) Except as otherwise provided herein, or in any other
resolutions of the Board creating a series of Preferred Stock or any
similar stock, or by law, the holders of shares of Junior 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.
(C) Except as set forth herein, in the Corporation's Restated
Certificate of Incorporation or as otherwise provided by law, holders
of Junior Preferred Stock shall have no voting rights.
IV. CERTAIN RESTRICTIONS
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Junior Preferred Stock as provided in
Section II are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not declared, on shares of
Junior Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, 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 Junior Preferred Stock;
(ii) declare or pay dividends, 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 Junior Preferred Stock, except dividends
paid ratably on the Junior 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 Junior 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 Junior
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Junior Preferred Stock, or any
shares of stock ranking on a parity with the Junior 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.
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(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 IV purchase or otherwise acquire
such shares at such time and in such manner.
V. REACQUIRED SHARES
Any shares of Junior 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 subject to the
conditions and restrictions on issuance set forth herein, in the Restated
Certificate of Incorporation, in any other Certificate of Designations creating
a series of Preferred Stock or any similar stock or as otherwise required by
law.
VI. LIQUIDATION, DISSOLUTION OR WINDING UP
Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (1) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Junior Preferred Stock unless, prior thereto, the holders of
shares of Junior Preferred Stock shall have received $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, provided that the holders of
shares of Junior Preferred Stock shall be entitled to receive an aggregate
amount per share, subject to the provision for adjustment hereinafter set forth,
equal to 1,000 times the aggregate amount to be distributed per share to holders
of shares of Common Stock, or (2) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Junior Preferred Stock, except distributions made ratably on the Junior
Preferred Stock and all 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. If the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the aggregate amount to which holders of shares of Junior
Preferred Stock were entitled immediately prior to such event under the proviso
in clause (1) of the preceding sentence shall be adjusted by multiplying such
amount 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.
VII. 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 each share of Junior Preferred Stock shall at
the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the
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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. If the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise than by
payment of a dividend in shares of Common Stock) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth
in the preceding sentence with respect to the exchange or change of shares of
Junior Preferred Stock shall be adjusted by multiplying such amount 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.
VIII. REDEMPTION
The shares of Junior Preferred Stock shall not be redeemable.
IX. RANK
The Junior Preferred Stock shall rank, with respect to the
payment of dividends and the distribution of assets, junior to all series of any
other class of the Corporation's Preferred Stock.
X. AMENDMENT
The Restated Certificate of Incorporation of the Corporation
shall not be amended in any manner which would alter or change the powers,
preferences or special rights of the Junior Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of at least two-thirds of
the outstanding shares of Junior Preferred Stock, voting together as a single
class.
IN WITNESS WHEREOF, this Certificate of Designations is
executed on behalf of the Corporation by its Chief Executive Officer and
attested by its Secretary, each of whom affirms that the facts stated herein are
true this 27th day of July, 2000.
-----------------------------
By: Xxxxxx X. Xxxxxxx
Title: Chief Executive Officer
Attest:
--------------------------------
By: Xxxxx X. Xxxxxxx
Title: Secretary
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