EXHIBIT 4.1
RIGHTS AGREEMENT
DATED AS OF
DECEMBER 28, 2000
BETWEEN
SUPERIOR TELECOM INC.
AND
AMERICAN STOCK TRUST & TRANSFER COMPANY
AS RIGHTS AGENT
INDEX
Section 1. CERTAIN DEFINITIONS.........................................1
Section 2. APPOINTMENT OF RIGHTS AGENT.................................7
Section 3. ISSUE OF RIGHT CERTIFICATES.................................7
Section 4. FORM OF RIGHT CERTIFICATES..................................9
Section 5. COUNTERSIGNATURE AND REGISTRATION...........................9
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT
CERTIFICATES........................................................10
Section 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS...........................................................11
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.........12
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK..............12
Section 10. PREFERRED SHARES RECORD DATE...............................13
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR
NUMBER OF RIGHTS. ..................................................13
Section 12. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS
OR EARNING POWER....................................................22
Section 13. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES...........................................................24
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES....................25
Section 15. RIGHTS OF ACTION...........................................26
Section 16. AGREEMENT OF RIGHT HOLDERS.................................26
Section 17. RIGHT HOLDER AND RIGHT CERTIFICATE HOLDER NOT
DEEMED A STOCKHOLDER................................................27
Section 18. CONCERNING THE RIGHTS AGENT. ..............................27
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT........................................................28
(i)
Section 20. DUTIES OF RIGHTS AGENT.....................................28
Section 21. CHANGE OF RIGHTS AGENT.....................................30
Section 22. ISSUANCE OF NEW RIGHT CERTIFICATES.........................31
Section 23. REDEMPTION.................................................31
Section 24. EXCHANGE...................................................32
Section 25. NOTICE OF CERTAIN EVENTS...................................33
Section 26. NOTICES....................................................34
Section 27. SUPPLEMENTS AND AMENDMENTS.................................35
Section 28. SUCCESSORS.................................................35
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.......35
Section 30. BENEFITS OF THIS AGREEMENT. ...............................36
Section 31. SEVERABILITY...............................................36
Section 32. GOVERNING LAW..............................................36
Section 33. COUNTERPARTS...............................................36
Section 34. DESCRIPTIVE HEADINGS.......................................36
Exhibit A Form of Certificate of Designation of
Series A Junior Participating Preferred Stock.............A-1
Exhibit B Form of Right Certificate.................................B-1
Exhibit C Summary of Rights to Purchase Preferred Stock.............C-1
(ii)
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of December 28, 2000 (the "AGREEMENT"),
between Superior TeleCom Inc., a Delaware corporation (the "COMPANY"), and
American Stock Transfer & Trust Company (the "RIGHTS AGENT").
The Board of Directors of the Company has authorized and declared a
dividend distribution of one preferred share purchase right (a "RIGHT") for each
Common Share (as hereinafter defined) outstanding as of the close of business on
January 10, 2001 (the "RECORD DATE"), and authorized and directed the issuance
of one Right in respect of each such share of Common Shares of the Company that
shall become outstanding between the Record Date and the earlier of the
Distribution Date and the Expiration Date (as such terms are hereinafter
defined); each Right representing the right to purchase one one-hundredth of a
Preferred Share (as hereinafter defined), or such different amount and/or kind
of securities as shall be hereinafter provided.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the then outstanding Common Shares (other than as a result of
a Permitted Offer) or was such a Beneficial Owner at any time after the Close of
Business on the date hereof, whether or not such Person continues to be the
Beneficial Owner of 15% or more of the then outstanding Common Shares but shall
not include (i) the Company, (ii) any Subsidiary of the Company, (iii) any
Benefit Plan, (iv) any Grandfathered Stockholder or Permitted Transferee or (v)
any Person or entity organized, appointed or established by the Company for or
pursuant to the terms of any Benefit Plan.
Notwithstanding the foregoing, no Person shall become an "Acquiring
Person":
(i) as a result of the acquisition of Common Shares by the
Company which, by reducing the number of Common Shares outstanding, increases
the proportional number of shares Beneficially Owned by such Person together
with all Affiliates and Associates of such Person; PROVIDED, HOWEVER, that if
(A) a Person would be or become an Acquiring Person (but for the operation of
this subparagraph (i)) as a result of the acquisition of Common Shares by the
Company and (B) after such share acquisition by the Company, such Person, or an
Affiliate or Associate of such Person, becomes the Beneficial Owner of any
additional Common Shares, then such Person shall be deemed an Acquiring Person;
or
(ii) if the Board of Directors determines in good faith that a
Person who would otherwise be an "Acquiring Person" has become such
inadvertently, and such Person (A) does not attempt to exercise any control over
the business affairs or management of the Company, including by means of a proxy
solicitation, and (B) divests as promptly as practicable a sufficient number of
Common Shares so that such Person would no longer be an "Acquiring Person," then
such Person shall not be deemed an "Acquiring Person" solely by reason of the
inadvertent acquisition for any purposes of this Agreement.
(b) "ADJUSTMENT SHARES" shall have the meaning set forth in Section
11(a)(ii).
(c) "AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
promulgated under the Exchange Act, as in effect on the date hereof.
(d) "ALPINE" shall mean The Alpine Group, Inc., a Delaware corporation.
(e) "ALPINE CHANGE OF CONTROL" shall mean the occurrence of any of the
following events:
(i) any Person, other than any Affiliate of Alpine, becomes
the Beneficial Owner, directly or indirectly, of more than 50% of the total
voting power represented by the outstanding capital stock of Alpine pursuant to
which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the Board of Directors
(irrespective of whether or not at the time the stock of any other class shall
or might have voting power by reason of the happening of any contingency)
("VOTING STOCK");
(ii) Alpine consolidates with, or merges with or into, another
Person or conveys, transfers, leases or otherwise disposes of all or
substantially all of its assets to any Person, or any Person consolidates with,
or merges with or into, Alpine, in any such event pursuant to a transaction in
which the outstanding Voting Stock of Alpine is converted into or exchanged for
cash, securities or other property, other than any such transaction where (I)
the outstanding Voting Stock of Alpine is not converted or exchanged at all
(except to the extent necessary to reflect a change in the jurisdiction of
incorporation of Alpine) or is converted into or exchanged for Voting Stock of
the surviving or transferee corporation and (II) immediately after such
transaction, the condition described in paragraph (i) above has not occurred
with respect to the outstanding Voting Stock of the surviving or transferee
corporation;
(iii) during any consecutive two-year period, individuals who
at the beginning of such period constituted the Board of Directors of Alpine
(together with any new directors whose election by the Board of Directors or
whose nomination for election by the stockholders of Alpine was approved by (x)
a vote of at least a majority of the directors then still in office who were
either directors
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at the beginning of such period or whose election or nomination for election was
previously so approved (as described in this clause (x) or in the following
clause (y)) or (y) any Affiliate of Alpine) cease for any reason to
constitute a majority of the Board of Directors then in office; or
(iv) Alpine is liquidated or dissolved or adopts a plan of
liquidation or dissolution.
(f) (i) A Person shall be deemed the "BENEFICIAL OWNER" of, and shall
be deemed to "BENEFICIALLY OWN," any securities:
(A) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly, pursuant to Rules 13d-3
and 13d-5 under the Exchange Act, as such Rules are in effect on the date
hereof;
(B) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has (1) the right to acquire (whether such
right is exercisable immediately or only after the passage of time or the
fulfillment of a condition or both) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or options, or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed the Beneficial
Owner of, or to Beneficially Own, (I) securities tendered pursuant to a tender
offer or exchange offer made pursuant to and in accordance with the applicable
rules and regulations promulgated under the Exchange Act by or on behalf of such
Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange and (II) securities subject to
an option granted by the Company to such Person in connection with the execution
of an agreement to acquire or merge with the Company; or (2) the right to vote
pursuant to any agreement, arrangement or understanding (whether or not in
writing); PROVIDED, HOWEVER, that a Person shall not be deemed the Beneficial
Owner of, or to Beneficially Own, any security if the agreement, arrangement or
understanding to vote such security (x) arises solely from a revocable proxy
given in response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations under the Exchange
Act and (y) is not also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(C) which are Beneficially Owned, directly or indirectly,
pursuant to Rules 13d-3 and 13d-5 under the Exchange Act, as such Rules are in
effect on the date hereof, by any other Person (or any Affiliate or Associate
thereof) with which the Person whose beneficial ownership is being determined
(or any of such Person's Affiliates or Associates) has any agreement,
arrangement or understanding (whether or not in writing), other than customary
agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities, for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described in the
proviso to Section 1(d)(i)(B)) or disposing of any voting securities of the
Company.
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(ii) Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "THEN OUTSTANDING", when used with
reference to a Person's Beneficial Ownership of securities of the Company, shall
mean the number of such securities then issued and outstanding together with the
number of such securities not then actually issued and outstanding which such
Person would be deemed to own beneficially hereunder.
(g) "BENEFIT PLAN" shall mean any employee benefit plan of the Company
or of any Subsidiaries of the Company.
(h) "BOARD OF DIRECTORS" shall mean the Board of Directors of the
Company.
(i) "BUSINESS DAY" shall mean any day other than a Saturday, Sunday,
Federal holiday or a day on which banking institutions in New York City are
authorized or obligated by law or executive order to close.
(j) "CLOSE OF BUSINESS" on any given date shall mean 5:00 P.M., New
York City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding
Business Day.
(k) "COMMON SHARES," when used with respect to the Company, shall mean
the common stock, par value $.01 per share, of the Company or, in the event of a
subdivision, combination or consolidation with respect to the Common Shares, the
Common Shares resulting from such subdivision, combination or consolidation.
"Common Shares," when used with reference to any Person other than the Company,
shall mean the capital stock (or equity interests) with the greatest voting
power of such other Person, or if such other Person is a Subsidiary of another
Person, the Person or Persons that ultimately control such first-mentioned
Person.
(l) "COMMON STOCK EQUIVALENTS" shall have the meaning set forth in
Section 11(a) (iii).
(m) "CURRENT MARKET PRICE" shall have the meaning set forth in Section
11(d).
(n) "CURRENT VALUE" shall have the meaning set forth in Section
11(a)(iii).
(o) "DISTRIBUTION DATE" shall have the meaning set forth in Section 3.
(p) "EQUIVALENT PREFERRED STOCK" shall have the meaning set forth in
Section 11(b).
(q) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended.
(r) "EXCHANGE RATIO" shall have the meaning set forth in Section 24(a).
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(s) "EXPIRATION DATE" shall mean the earlier of the Final Expiration
Date or the Redemption Date.
(t) "FINAL EXPIRATION DATE" shall mean December 28, 2010.
(u) "GRANDFATHERED STOCKHOLDER" shall mean (i) Alpine, provided,
however, that, upon the occurrence of an Alpine Change of Control, Alpine
shall cease to be a Grandfathered Stockholder, (ii) Xxxxxx X. Xxxxxx, (iii)
any Affiliate or Associate thereof (provided that, in the case of Alpine,
there has not occurred an Alpine Change of Control) and (iv) any Permitted
Transferee thereof (provided that, in the case of Alpine, there has not
occurred an Alpine Change of Control).
(v) "PERMITTED OFFER" shall mean a tender or exchange offer which is
for all outstanding Common Shares at a price and on terms determined, prior to
the purchase of shares under such tender or exchange offer, by resolution
adopted by the Board of Directors to be adequate (taking into account all
factors that such directors deem relevant) and otherwise in the best interests
of the Company and its stockholders (other than the Person or any Affiliate or
Associate thereof on whose behalf the offer is being made) taking into account
all factors that such directors may deem relevant.
(w) "PERMITTED TRANSFER" means any Transfer of Beneficial Ownership of
some or all of the Common Shares Beneficially Owned by a Grandfathered
Stockholder (i) upon the death of the Grandfathered Stockholder, to his
respective heirs, executors, administrators, testamentary trustees, legatees,
beneficiaries or similar Persons; (ii) to the Grandfathered Stockholder's
siblings or spouse (or to the siblings or spouse of any such siblings or spouse)
or direct lineal descendants of any such Grandfathered Stockholder, siblings or
spouse (any of the foregoing, a "FAMILY MEMBER"), or to a trust, the
beneficiaries of which, or to a corporation, partnership or other entity, the
stockholders or limited or general partners or other equity holders of which,
include only the Grandfathered Stockholder and the Grandfathered Stockholder's
Family Members (a "GRANDFATHERED STOCKHOLDER'S TRUST"), or a Transfer made by
such a Grandfathered Stockholder's Trust to the Grandfathered Stockholder or any
Family Member thereof; (iii) to any charitable entity established by a
Grandfathered Stockholder or a Family Member thereof; or (iv) to any corporation
or other entity controlled by the Grandfathered Stockholder and/or Family
Members thereof.
(x) "PERMITTED TRANSFEREE" means any transferee of Common Shares
pursuant to a Permitted Transfer.
(y) "PERSON" shall mean any individual, firm, corporation, partnership,
limited liability company, trust, association, joint venture, group (as such
term is used in Rule 13d-5 under the Exchange Act, as such Rule is in effect on
the date hereof) or other entity, and shall include any successor (by merger or
otherwise) of such entity.
(z) "PREFERRED SHARES" shall mean shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the Company, having
the rights, preferences and limitations set forth in the form of Certificate of
Designation attached to this Agreement as EXHIBIT A.
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(aa) "PRINCIPAL PARTY" shall have the meaning set forth in Section
12(b).
(bb) "PURCHASE PRICE" shall have the meaning set forth in Section 7(b).
(cc) "RIGHT CERTIFICATES" shall have the meaning set forth in Section
3(a).
(dd) "REDEMPTION DATE" shall have the meaning set forth in Section 23.
(ee) "REDEMPTION PRICE" shall have the meaning set forth in Section 23.
(ff) "SECTION 11(a)(ii) EVENT" shall mean any event described in
Section 11(a)(ii).
(gg) "SECTION 12(a) EVENT" shall mean any event described in clause
(x), (y) or (z) of Section 12(a).
(hh) "SECURITIES ACT" means the Securities Act of 1933, as amended and
as in effect on the date of this Agreement.
(ii) "SPREAD" shall have the meaning set forth in Section 11(a)(iii).
(jj) "STOCK ACQUISITION DATE" shall mean the earlier of the date of (i)
the public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to the Exchange Act) by the Company
or an Acquiring Person that an Acquiring Person has become such and (ii) the
public disclosure of facts by the Company or an Acquiring Person indicating that
an Acquiring Person has become such.
(kk) "SUBSIDIARY" of any Person shall mean any corporation or other
entity of which a majority of the voting power of the voting equity securities
or equity interests is owned, directly or indirectly, by such Person.
(ll) "SUBSTITUTION PERIOD" shall have the meaning set forth in Section
11(a)(iii).
(mm) "SUMMARY OF RIGHTS" shall mean the Summary of Rights to Purchase
Preferred Stock in substantially the form of EXHIBIT C.
(nn) "TRADING DAY" shall have the meaning set forth in Section
11(d)(i).
(oo) "TRANSFER" shall mean any sale, assignment, transfer or other
disposition.
(pp) "TRIGGERING EVENT" shall mean any Section 11(a)(ii) Event or any
Section 12(a) Event.
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(qq) "TRADING DAY" shall have the meaning set forth in Section 12(a).
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable.
Section 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the tenth day after the Stock Acquisition
Date or (ii) the Close of Business on the tenth Business Day, or such later date
as may be determined by resolution of the Board of Directors, after the date of
the commencement by any Person (other than the Company, any Subsidiary of the
Company, or any entity holding Common Shares for or pursuant to the terms of any
Benefit Plan) of, or the first public announcement of an intention of any Person
(other than the Persons referred to in the preceding parenthetical) to make, a
tender or exchange offer the consummation of which would result in any Person
becoming an Acquiring Person (including, in the case of both (i) and (ii), any
such date which is after the date of this Agreement and prior to the issuance of
the Rights) (the earlier of (i) and (ii) being herein referred to as the
"DISTRIBUTION DATE"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Shares
registered in the names of the holders thereof (which certificates shall also be
deemed to be Right Certificates) and not by separate Right Certificates and (y)
the right to receive Right Certificates will be transferable only simultaneously
and together with the transfer of the underlying Common Shares, PROVIDED,
HOWEVER, that if a tender or exchange offer is terminated prior to the
occurrence of a Distribution Date, then no Distribution Date shall occur as a
result of such tender or exchange offer. Until the Distribution Date, the
surrender for transfer of any certificate for Common Shares outstanding on the
Record Date shall also constitute the transfer of the Rights associated with
such Common Shares. As soon as is practicable after the Distribution Date, the
Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send), by first-class, postage prepaid mail, to each record holder of Common
Shares as of the Close of Business on the Distribution Date, at the address of
such holder shown on the records of the Company, one or more right certificates,
in substantially the form attached hereto as EXHIBIT B (the "RIGHT
CERTIFICATES"), evidencing one Right for each Common Share so held, subject to
adjustment as provided herein. As of and after the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of the Summary of Rights by first-class, postage-prepaid mail,
to each record holder of Common Shares as of the Close of Business on the Record
Date, at the address of such holder shown on the records of the Company. With
respect to certificates for Common Shares outstanding as of the Record Date,
until the Distribution Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates
together with a copy of the Summary of Rights
7
attached thereto. Until the Distribution Date (or the earlier of the Redemption
Date or the Final Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding on the Record Date, with or without a
copy of the Summary of Rights attached thereto, shall also constitute the
transfer of the Rights associated with the Common Shares evidenced thereby.
(c) Certificates for Common Shares which become outstanding (including,
without limitation, reacquired Common Shares referred to in the last sentence of
this Section 3(c)) after the Record Date but prior to the Expiration Date shall
be deemed also to be certificates for Rights and shall bear the following
legend:
This certificate also evidences and entitles the
holder hereof to certain rights as set forth in a Rights
Agreement between Superior TeleCom Inc. and American Stock
Trust & Transfer Company, dated as of December 28, 2000, as
the same may 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 Superior TeleCom Inc. 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. Superior TeleCom Inc.
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 an Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement) and certain related Persons, whether currently held
by or on behalf of such Person or by any subsequent holder,
may be or may become null and void.
With respect to such certificates containing the foregoing legend,
until the Distribution Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates alone
and registered owners of Common Shares shall also be the registered holders of
the associated Rights, and the surrender for transfer of any such certificate
shall also constitute the transfer of the Rights associated with the Common
Shares represented thereby. In the event that the Company purchases or acquires
any Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated with
the Common Shares which are no longer outstanding.
Section 4. FORM OF RIGHT CERTIFICATES.
8
(a) The Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof) shall be
substantially in the form set forth as EXHIBIT B to this Agreement and may have
such marks of identification or designation and such legends, summaries or
endorsements printed thereon as the Company may deem appropriate and are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law, rule or regulation or with any rule or
regulation of any stock exchange on which the Rights may from time to time be
listed, or to conform to usage. Subject to the provisions of Section 11 and
Section 22, the Right Certificates, whenever distributed, shall be dated as of
the Record Date and shall entitle the holders thereof to purchase such number of
one- hundredths of a Preferred Share as shall be set forth therein at the price
per one one-hundredth of a Preferred Share set forth therein, but the amount and
type of securities purchasable upon the exercise of each Right and the Purchase
Price shall be subject to adjustment as provided herein.
(b) Any Right Certificate issued pursuant to Section 3(a) or Section 22
that represents Rights which are null and void pursuant to Section 11(a)(ii) of
this Agreement 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)
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).
Accordingly, this Right Certificate and the Rights represented
hereby may be or may become null and void in the circumstances
specified in Section 11(a)(ii) of the Rights Agreement.
The provisions of Section 11(a)(ii) of this Rights Agreement shall be
operative whether or not the foregoing legend is contained on any such Right
Certificate.
Section 5. COUNTERSIGNATURE AND REGISTRATION. The Right Certificates
shall be executed on behalf of the Company by its Chairman, Chief Executive
Officer or President, either manually or by facsimile signature, and have
affixed thereto the Company's seal or a facsimile thereof, and shall be attested
by the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Right Certificates shall be countersigned by the Rights
Agent, either manually or by facsimile signature, and shall not be valid for any
purpose unless so countersigned. In case any officer of the Company whose manual
or facsimile signature is affixed to 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 may nevertheless
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. Any Right Certificate may be signed on
behalf of
9
the Company by any person who, at the actual date of the execution of such Right
Certificate, shall be a proper officer 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.
Following the Distribution Date, the Rights Agent will keep or cause to
be kept, at its office or offices designated as the appropriate place for
surrender of Right Certificates upon exercise or transfer, 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 the face of each of the Right
Certificates, the date of each of the Right Certificates and the Right
Certificate number.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES. Subject
to the provisions of Section 14, at any time after the Close of Business on the
Distribution Date, and prior to the Expiration Date, any Right Certificate or
Right Certificates (other than Right Certificates representing Rights that have
become void pursuant to Section 11(a)(ii) or that have been exchanged pursuant
to Section 24) may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates, entitling the registered holder to
purchase a like number of one one-hundredths of a Preferred Share (or following
a Triggering Event, Common Shares, other securities, cash or other assets, as
the case may be) as the Right Certificate or Right Certificates surrendered then
entitled such holder (or former holder in the case of a transfer) 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 or Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any such
surrendered Right Certificates 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.
Thereupon the Rights Agent shall countersign and deliver to the Person entitled
thereto a Right Certificate or Right Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any tax
or governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
Upon (i) receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them (a) of the loss, theft, destruction or
mutilation of a Right Certificate and, (b) in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, (ii) at
the request of the Company, reimbursement to the Company and the Rights Agent of
all reasonable expenses incidental thereto, and (iii) in case of mutilation of a
Right Certificate, surrender to the Rights Agent and cancellation of such Right
Certificate, the Company will issue and deliver a new Right Certificate of
like tenor to the Rights
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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 11(a)(ii) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to the Rights
Agent at the office or offices of the Rights Agent designated for each purpose,
together with payment of the aggregate Purchase Price for the total number of
one one-hundredths of a Preferred Share (or other securities, as the case may
be) as to which the surrendered Rights are exercised, at or prior to the earlier
of the Close of Business on the Expiration Date and the time at which the right
to exercise the Rights terminates under Section 24 hereof.
(b) The purchase price for each one one-hundredth of a Preferred Share
pursuant to the exercise of a Right shall initially be $10.88 (the "PURCHASE
PRICE"), shall be subject to adjustment from time to time as provided in Section
11 and Section 12 and shall be payable in lawful money of the United States of
America in accordance with Section 7(c).
(c) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one one-hundredth of a Preferred Share (or other securities, cash or
other assets, as the case may be) to be purchased as set forth below and an
amount equal to any applicable tax or charge required to be paid by the holder
of such Right Certificate in accordance with Section 9 of this Agreement, by
certified check, cashier's check or money order payable to the order of the
Company, the Rights Agent shall thereupon promptly (i)(A) requisition from any
transfer agent of the Preferred Shares (or make available, if the Rights Agent
is the transfer agent) certificates for the number of Preferred Shares to be
purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or, (B) if the Company in its sole discretion
shall have elected to deposit the Preferred Shares issuable upon exercise of the
Rights into a depository, requisition from the depositary agent depositary
receipts representing such number of one one-hundredths of a Preferred Share as
are to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary agent to comply
with such request, (ii) requisition from the Company, when appropriate, the
amount of cash to be paid in lieu of issuance of fractional shares in accordance
with Section 14, (iii) after receipt of such requisitioned certificates or
depositary receipts, 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 (iv) when appropriate, after receipt of
such cash, deliver that cash to or upon the order of the registered holder of
such Right Certificate. In the event that the Company is obligated to issue
other securities
11
(including Common Shares) of the Company, pay cash and/or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or other property
are available for distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate shall
exercise fewer 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, or the Rights
Agent shall place an appropriate notation on the Right Certificate with respect
to those Rights exercised.
(e) 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)
properly 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 canceled form,
or, if surrendered to the Rights Agent, shall be canceled 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 canceled Right Certificates
to the Company or shall, at the written request of the Company, destroy such
canceled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will, to the extent
reasonably practicable, cause to be reserved and kept available out of its
authorized and unissued Preferred Shares, or any Preferred Shares held in its
treasury, the number of Preferred Shares that will be sufficient to permit the
exercise in full of all outstanding Rights in accordance with Section 7 hereof.
(b) So long as the Preferred Shares (and, following the occurrence of a
Triggering Event, Common Shares or other securities) issuable upon the exercise
of Rights may be listed on any national securities exchange, the Company shall
use its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
12
(c) The Company covenants and agrees that it will take all such action
as may be necessary to insure that all one one-hundredths of a Preferred Share
(and, following the occurrence of a Triggering Event, Common Shares or other
securities) deliverable upon exercise of Rights shall, at the time of delivery
of the certificates for such securities (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable securities.
(d) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any one one-hundredths of a Preferred Share (or Common Shares and/or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required to pay any tax or charge which may be payable in
respect of any transfer or delivery of Right Certificates to a Person other
than, or the issuance or delivery of certificates or depositary receipts for a
number of one one-hundredths of a Preferred Share (or Common Shares and/or other
securities, as the case may be) 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 for a number of one one-hundredths of a
Preferred Share (or Common Shares and/or other securities, as the case may be)
upon the exercise of any Rights until any such tax has 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.
Section 10. PREFERRED SHARES RECORD DATE. Each Person in whose name any
certificate for a number of one one-hundredths of a Preferred Share is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Preferred 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 taxes or charges) was made; PROVIDED, HOWEVER, that if the date of
such surrender and payment is a date upon which the transfer books of the
Company for the Preferred Shares are closed, such Person shall be deemed to have
become the record holder of such shares (fractional or otherwise) on, and such
certificate shall be dated, the next succeeding Business Day on which the
transfer books of the Company for the Preferred Shares are open. 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, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number and kind of shares, or fractions thereof,
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) If the Company shall at any time after the date of this
Agreement (A) declare a dividend on the Preferred Shares payable in Preferred
Shares, (B) subdivide the outstanding Preferred
13
Shares, (C) combine the outstanding Preferred Shares into a smaller number of
shares or (D) issue any of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a), the Purchase
Price in effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, and the
number and kind of Preferred Shares or capital stock, as the case may be,
issuable on such date, shall be proportionately adjusted so that the holder of
any Right exercised after such time shall be entitled to receive the aggregate
number and kind of Preferred Shares or capital stock, as the case may be, which,
if such Right had been exercised immediately prior to such date and at a time
when the transfer books of the Company for the Preferred Shares were open, such
holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both Section 11(a)(i) and
Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii); PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of Rights be less than the aggregate
par value of the capital stock of the Company issuable upon exercise of such
Rights.
(ii) Subject to Section 24 of this Agreement, if any Person,
alone or together with his Affiliates and Associates, shall become an Acquiring
Person, then proper provision shall be made so that each holder of a Right,
except as provided below, shall thereafter have the right to receive, upon
exercise thereof at the then-current Purchase Price in accordance with the terms
of this Agreement, in lieu of the number of one one-hundredths of a Preferred
Share for which such Right was otherwise then exercisable, such number of Common
Shares as shall equal the result obtained by (x) multiplying the then-current
Purchase Price by the number of one one- hundredths of a Preferred Share for
which a Right was then exercisable immediately prior to the first occurrence of
such Section 11(a)(ii) Event, and (y) dividing that product by 50% of the
Current Market Price per Common Share (determined pursuant to Section 11(d)
hereof) on the date of such first occurrence (such number of shares being
hereinafter referred to as the "ADJUSTMENT SHARES").
Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any Rights
Beneficially Owned by (i) an Acquiring Person, or an Associate or Affiliate of
an Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to
holders of equity interests in such Acquiring Person or to any Person with whom
the Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section
11(a)(ii), shall become null and
14
void without any further action and no holder of such Rights shall have any
rights whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. No Right Certificate shall be issued pursuant to
Section 3 that represents Rights Beneficially Owned by an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any Associate or
Affiliate thereof; no Right Certificate shall be issued at any time upon the
transfer of any Rights to an Acquiring Person whose Rights would be void
pursuant to the preceding sentence or any Associate or Affiliate thereof or to
any nominee of such Acquiring Person, Associate or Affiliate; and any Right
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be void pursuant to the preceding sentence or any Associate
or Affiliate thereof shall be canceled. The Company shall use all reasonable
efforts to insure that the provisions of this Section 11(a)(ii) and Section 4(b)
are complied with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or any of its Affiliates,
Associates or transferees hereunder.
(iii) If the number of Common Shares which are authorized by
the Company's Certificate of Incorporation, as amended, and not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights, is
not sufficient to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii), or should the Board of Directors so elect, the Company shall:
(A) determine the excess of (1) the value of the Adjustment Shares issuable upon
the exercise of a Right (the "CURRENT VALUE") over (2) the Purchase Price
attributable to a Right (such excess, the "SPREAD") and (B) with respect to each
Right, make adequate provision to substitute for the Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) other equity securities of the Company (including, without
limitation, Preferred Shares, or units of Preferred Shares, which the Board of
Directors has determined to have the same value as the Common Shares (such
Preferred Shares, "COMMON STOCK EQUIVALENTS"), (4) debt securities of the
Company, (5) other assets or (6) any combination of the foregoing having an
aggregate value equal to the Current Value, where such aggregate value has been
determined by action of the Board of Directors; PROVIDED, HOWEVER, that if the
Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the first occurrence of a
Section 11(a)(ii) Event, then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right Certificate and without requiring payment
of the Purchase Price, Common Shares (to the extent available) and, if
necessary, cash, securities and/or assets that in the aggregate are equal to the
Spread. If the Board of Directors shall determine in good faith that it is
likely that sufficient additional Common Shares could be authorized for issuance
upon exercise in full of the Rights, the thirty (30) day period set forth above
may be extended to the extent necessary, but not more than one
hundred twenty (120) days after the first occurrence of a Section 11(a)(ii)
Event, in order that the Company may seek stockholder approval for the
authorization of such additional shares (such period as it may be extended, the
"SUBSTITUTION PERIOD"). To the extent that the Company determines as provided
above that some action is to be taken pursuant to this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 11(a)(ii), that such action shall
apply uniformly to all outstanding Rights and (y) may suspend the exercisability
of the Rights until the expiration of the Substitution Period in order to seek
any
15
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to the first sentence of this Section
11(a)(iii) and to determine the value thereof. In the event of any such
suspension, the Company shall deliver notice to the Rights Agent and issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as deliver notice to the Rights Agent and issue a
public announcement at such time as the suspension is no longer in effect. For
purposes of this Section 11(a)(iii), the value of the Common Shares shall be the
Current Market Price per Common Share (as determined pursuant to Section
11(d)(i)) on the date of the first occurrence of the event described in Section
11(a)(ii) and any Common Stock Equivalents shall be deemed to have the same
value as the Common Shares on such date.
(b) If the Company shall fix a record date for the issuance of rights,
options or warrants to all holders of Preferred Shares entitling them for a
period expiring within 45 calendar days after such record date to subscribe for
or purchase Preferred Shares (or shares having the same rights, privileges or
preferences as Preferred Shares ("EQUIVALENT PREFERRED STOCK") or securities
convertible into Preferred Shares or Equivalent Preferred Stock) at a price per
Preferred Share or per share of Equivalent Preferred Stock (or having a
conversion or exercise price per share, if a security convertible into or
exercisable for Preferred Shares or Equivalent Preferred Stock) less than the
Current Market Price per Preferred Share (as determined pursuant to Section
11(d)(ii)) on such record date, the Purchase Price in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of Preferred Shares outstanding on such record date plus the number of
Preferred Shares which the aggregate offering price of the total number of
Preferred Shares and/or Equivalent Preferred Stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities so to be
offered) would purchase at such Current Market Price, and the denominator of
which shall be the number of Preferred Shares outstanding on such record date,
plus the number of additional Preferred Shares and/or Equivalent Preferred Stock
to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); PROVIDED, HOWEVER, that
in no event shall the consideration to be paid upon the exercise of Rights be
less than the aggregate par value of the capital stock of the Company issuable
upon exercise of such Rights. In case such subscription price may be paid in a
consideration, part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding upon the Rights Agent. Preferred Shares owned
by or held for the account of the Company shall not be deemed outstanding for
the purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and if such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for the making of a
distribution to all holders of Preferred Shares (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness, cash or other
assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares, but
16
including any dividend payable on stock other than Preferred Shares) or
convertible securities, subscription rights or warrants (excluding those
referred to in Section 11(b)), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the Current Market Price per Preferred Share (as determined pursuant to
Section 11(d)(ii) hereof) on such record date less the fair market value (as
determined in good faith by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent and shall be binding upon
the Rights Agent) of the portion of such evidences of indebtedness, cash or
other assets or convertible securities, subscription rights or warrants
applicable to one Preferred Share, and the denominator of which shall be such
Current Market Price per Preferred Share; PROVIDED, HOWEVER, that in no event
shall the consideration to be paid upon the exercise of Rights be less than the
aggregate par value of the capital stock of the Company issuable upon exercise
of such Rights. Such adjustment 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) (i) For the purpose of any computation hereunder, the Current
Market Price per Common Share on any date shall be deemed to be the average of
the daily closing prices per Common Share for the 30 consecutive Trading Days
immediately prior to such date; PROVIDED, HOWEVER, that if the Current Market
Price per Common Share is determined during a period following the announcement
by the issuer of such Common Shares of (x) a dividend or distribution on such
Common Shares payable in Common Shares or securities convertible into such
Common Shares or (y) any subdivision, combination or reclassification of such
Common Shares and prior to the expiration of 30 Trading Days after the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such case, the
Current Market Price per Common Share shall be appropriately adjusted to reflect
the Current Market Price per share equivalent of such Common Shares. The closing
price for each day shall be the last sale price, regular way or, in case no such
sale takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the Common Shares 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 Common Shares
are listed or admitted to trading or, if the Common Shares are not listed or
admitted to trading on any national securities exchange, the last quoted price
or, if not quoted, the average of the high bid and low asked prices in the over-
the-counter market, as reported by the Nasdaq Stock Market ("NASDAQ") or such
other system then in use, or, if on any such date the Common Shares are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Common Shares
selected by the Board of Directors. If on any such date no market maker is
making a market in the Common Shares, the fair value of such shares on such
date, as determined in good faith by the Board of Directors, shall be used. The
term "TRADING DAY" shall mean a day on which the principal national
17
securities exchange on which the Common Shares are listed or admitted to trading
is open for the transaction of business or, if the Common Shares are not listed
or admitted to trading on any national securities exchange, a Business Day. If
the Common Shares are not publicly held or not so listed or traded, the Current
Market Price per share shall mean the fair value per share as determined in good
faith by the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the Current
Market Price per Preferred Share shall be determined in the same manner as set
forth for the Common Shares in Section 11(d)(i) (other than the last sentence
thereof). If the Current Market Price per Preferred Share cannot be determined
in the manner provided above or if the Preferred Share is not publicly held or
listed or traded in a manner described in Section 11(d)(i), the Current Market
Price per Preferred Share shall be conclusively deemed to be an amount equal to
100 (as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common Shares
occurring after the date of this Agreement) multiplied by the Current Market
Price per Common Share. If neither the Common Shares nor the Preferred Shares
are publicly held or so listed or traded, the Current Market Price per Preferred
Share shall mean the fair value per share as determined in good faith by the
Board of Directors, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding (except the last
sentence of this Section 11(e)), no adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or decrease of at
least 1% 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 ten-thousandth of
a Common Share or other security or one-millionth of a Preferred Share, as the
case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which mandates such
adjustment or (ii) the Expiration Date.
(f) If, as a result of an adjustment made pursuant to Section 11(a)(ii)
or Section 12(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Preferred
Shares, thereafter the Purchase Price and the number of such other shares so
receivable upon exercise of any Right and the number of Rights outstanding shall
be subject to adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the Preferred Shares
contained in Section 11(a), (b) and (c) and the provisions of Sections 7, 9, 10,
12 and 14 with respect to the Preferred Shares 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 evidence the right to
purchase, at the adjusted Purchase Price, the
18
number of one one-hundredths of a Preferred Share 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 one one- hundredths of
a Preferred Share (calculated to the nearest one-millionth) obtained by (i)
multiplying (x) the number of one one-hundredths of a share covered by a Right
immediately prior to such adjustment to the Purchase Price by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the 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 Preferred Shares purchasable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of the number of
Rights shall be exercisable for the number of one one- hundredths of a Preferred
Share for which such 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 ten-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 hereof, 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) Notwithstanding any adjustment or change in the Purchase Price or
the number of Preferred Shares, or fraction thereof, issuable upon the exercise
of the Rights, the Right Certificates
19
theretofore and thereafter issued may continue to express the Purchase Price and
the number of one one-hundredths of a share which were expressed in the initial
Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one one-hundredth of the then par value, if any, of a
Preferred Share issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be necessary in order
that the Company may validly and legally issue such number of fully paid and
nonassessable one one-hundredths of a Preferred Share at such adjusted Purchase
Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
of the Preferred Shares and any other capital stock or securities of the
Company, if any, issuable upon such exercise, over and above the Preferred
Shares and other capital stock or securities of the Company, if any, issuable
upon such exercise on the basis of the Purchase Price in effect prior to such
adjustment; PROVIDED, HOWEVER, that the Company shall deliver to such holder a
due xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) or securities upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Board of Directors shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this Section 11,
as and to the extent that it in its sole discretion shall determine to be
advisable in order that any (i) consolidation or subdivision of the Preferred
Shares, (ii) issuance wholly for cash of any Preferred Shares at less than the
current market price, (iii) issuance wholly for cash of Preferred Shares or
securities which by their terms are convertible into or exchangeable for
Preferred Shares, (iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the Company to the
holders of its Preferred Shares shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not at any time
after the Distribution Date (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)),
(ii) merge with or into any other Person (other than a Subsidiary of the Company
in a transaction which complies with Section 11(o)), or (iii) sell or transfer
(or permit any Subsidiary to sell or transfer), in one or more transactions,
assets or earning power aggregating more than 50% of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)), if at the time of or
immediately after such consolidation, merger or sale there are any charter or
by-law provisions, securities outstanding (including but not limited to rights,
warrants or other instruments), agreements in effect or other actions taken
which would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or prior to, simultaneously with or immediately
after such consolidation, merger or sale, the
20
stockholders of the Person who constitutes, or would constitute, the Principal
Party (as hereinafter defined) shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates. The
Company shall not consummate any such consolidation, merger, sale or transfer
unless prior thereto the Company and such other Person shall have executed and
delivered to the Rights Agent a supplemental agreement evidencing compliance
with this Section 11(n).
(o) The Company covenants and agrees that, after the earlier of the
Distribution Date or the time any Person becomes an Acquiring Person, it will
not, except as permitted by Section 23 or Section 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) If, after the date of this Agreement and prior to the Distribution
Date, the Company shall (i) declare or pay any dividend on the Common Shares
payable in Common Shares or (ii) effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares) into a greater or lesser number of Common
Shares, then in any such case (x) the number of one one-hundredths of a
Preferred Share purchasable after such event upon exercise of each Right shall
be determined by multiplying the number of one one-hundredths of a Preferred
Share so purchasable immediately before such event by a fraction, the numerator
of which is the number of Common Shares outstanding immediately before such
event and the denominator of which is the number of Common Shares outstanding
immediately after such event, and (y) each Common Share outstanding immediately
after such event shall have issued with respect to it that number of Rights
which each Common Share outstanding immediately prior to such event had issued
with respect to it. The adjustments provided for in this Section 11(p) shall be
made successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
(q) The exercise of Rights under Section 11(a)(ii) shall only result in
the loss of rights under Section 11(a)(ii) to the extent so exercised and shall
not otherwise affect the rights represented by the Rights under this Rights
Agreement, including the rights represented by Section 12.
Section 12. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) If, on or following the Stock Acquisition Date, directly or
indirectly, (x) 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, (y) any Person shall consolidate
with the Company or merge with and into the Company, and the Company shall be
the continuing or surviving corporation of such consolidation or merger, other
than, in the case of any transaction described in (x) or (y), a merger or
consolidation which results in all of the securities generally entitled to vote
in the election of directors ("VOTING SECURITIES") of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into
21
securities of the continuing or surviving entity) all of the Voting Securities
of the Company or such continuing or surviving entity outstanding immediately
after such merger or consolidation and the holders of such securities not having
changed as a result of such merger or consolidation, or (z) the Company shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or series of related transactions,
assets or earning power aggregating 50% or more of the assets or earning power
of the Company and its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) hereof), then, and in
each such case, proper provision shall be made so that (i) each holder of a
Right, except as provided in Section 11(a)(ii) hereof, shall thereafter have the
right to receive, upon the exercise thereof at the then-current Purchase Price
in accordance with the terms of this Agreement, such number of shares of validly
authorized and issued, fully paid and non-assessable Common Shares of the
Principal Party, not subject to any liens, encumbrances, rights of call or first
refusal or other adverse claims, as shall be equal to the result obtained by (A)
multiplying the then-current Purchase Price by the number of one one-hundredths
of a Preferred Share for which a Right was then exercisable immediately prior to
the first occurrence of such Section 12(a) Event (or, if a Section 11(a)(ii)
Event had occurred prior to such Section 12(a) Event, multiplying the number of
such one one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of such Section 11(a)(ii) Event by the
Purchase Price in effect immediately prior to such first occurrence), and (B)
dividing that product by 50% of the Current Market Price per Common Share of
such Principal Party (determined pursuant to Section 11(d)(i) on the date of
consummation of such Section 12(a) Event); (ii) 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; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply to such Principal Party following the first
occurrence of a Section 12(a) Event; and (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of Common Shares in accordance with Section 9 hereof) 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 Common
Shares thereafter deliverable upon the exercise of the Right.
(b) "PRINCIPAL PARTY" shall mean
(i) in the case of any transaction described in (x) or (y) of
the first sentence of Section 12(a), the Person that is the issuer of any
securities into which the Common Shares of the Company are converted in such
merger or consolidation, and if no securities are so issued, the Person that is
the other party to such merger or consolidation (including, if applicable, the
Company if it is the surviving corporation); and
(ii) in the case of any transaction described in (z) of the
first sentence of Section 12(a), the Person that is the party receiving the
greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions; PROVIDED, HOWEVER, that in any such case, (x) if
22
the Common Shares of such Person are not at such time and have 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
Person, the Common Shares of which are and have been so registered, "Principal
Party" shall refer to such other Person; (y) in case such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Shares
of all of which are and have been so registered, "Principal Party" shall refer
to whichever of such Persons is the issuer of the Common Shares having the
greatest market value of shares held by the public; and (z) in case such Person
is owned, directly or indirectly, by a joint venture formed by two or more
Persons that are not owned, directly or indirectly, by the same Person, the
rules set forth in (x) and (y) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were a
"Subsidiary" of both or all of such joint venturers and the Principal Parties in
each such chain shall bear the obligation set forth in this Section 12 in the
same ratio as their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
its authorized Common Shares which have not been issued or reserved for issuance
to permit the exercise in full of the Rights in accordance with this Section 12
and unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement providing
for the terms set forth in Section 12(a) and (b) and confirming that all rights
of first refusal or preemptive rights in respect of the issuance of Common
Shares of such Principal Party upon exercise of outstanding Rights have been
waived and that such transactions shall not result in a default by such
Principal Party under the Rights Agreement, and further providing that, as soon
as practicable after the date of any consolidation, merger or sale or transfer
of assets or earning power referred to in Section 12(a) hereof, such Principal
Party will:
(i) prepare and file a registration statement on an
appropriate form under the Securities Act with respect to the Rights and the
securities purchasable upon exercise of the Rights; use its best efforts to
cause such registration statement to become effective as soon as practicable
after such filing; and use its best efforts to cause such registration statement
to remain effective (with a prospectus at all times meeting the requirements of
the Securities Act) until the date of expiration of the Rights, and similarly
comply with applicable state securities laws;
(ii) use its best efforts to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility requirements for
quotation on the Nasdaq National Market;
(iii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under the blue sky
laws of such jurisdictions as may be necessary or appropriate; and
23
(iv) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates which comply in
all respects with the requirements for registration on Form 10 (or any successor
form) under the Exchange Act.
The provisions of this Section 12 shall similarly apply to successive mergers or
consolidations or sales or other transfers. The rights under this Section 12
shall be in addition to the rights to exercise Rights and adjustments under
Section 11(a)(ii) and shall survive any exercise thereof.
(d) Notwithstanding anything in this Agreement to the contrary, this
Section 12 shall not be applicable to a transaction described in subparagraph
(x) or (y) of Section 12(a) if: (i) such transaction is consummated with a
Person or Persons which acquired Common Shares pursuant to a Permitted Offer (or
a wholly owned Subsidiary of any such Person or Persons); (ii) the price per
Common Share offered in such transaction is not less than the price per Common
Share paid to all holders of Common Shares whose shares were purchased pursuant
to such Permitted Offer; and (iii) the form of consideration offered in such
transaction is the same as the form of consideration paid pursuant to such
Permitted Offer. Upon consummation of any such transaction contemplated by this
Section 12(d), all Rights hereunder shall expire.
Section 13. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or Section 12, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
and a brief statement of the facts relating to such adjustment, (b) promptly
file with the Rights Agent, and with each transfer agent for the Common Shares
and Preferred Shares, a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Right Certificate (or if prior to the Distribution
Date, to each holder of a certificate representing Common Shares in accordance
with Section 25 of this Agreement). Notwithstanding the foregoing sentence, the
failure of the Company to make such certificates or give such notice shall not
affect the validity or the force or effect of the requirement for such
adjustment, and, prior to the earlier to occur of the Distribution Date and the
Stock Acquisition Date, the Company may, in its discretion, satisfy the
obligation set forth in clause (c) above by including such summary in its next
regular report to stockholders. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained. Any
adjustment to be made pursuant to Section 11 or 12 shall be effective as of the
date of the event giving rise to such adjustment.
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. In lieu of
such fractional Rights, at the election of the Company, there shall be paid to
the registered holders of the Right Certificates with regard to which such
fractions of 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
24
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 last quoted price, or, if not so quoted,
the average of the high bid and low asked prices in the over- the-counter
market, as reported by Nasdaq or such other system then in use or, if on any
such date the Rights are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker
(selected by the Board of Directors) making a market in the Rights. If on any
such date no such market maker is making a market in the Rights, the fair value
of the Rights on such date, as determined in good faith by the Board of
Directors, shall be used, whose determination shall be described in a statement
filed with the Rights Agent and shall be conclusive for all purposes.
(b) The Company shall not be required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one one-hundredth
of a Preferred Share) upon exercise of the Rights, or to distribute certificates
which evidence fractional Preferred Shares (other than fractions which are
integral multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred Share
may, at the election of the Company, be evidenced by depositary receipts,
pursuant to an appropriate agreement between the Company and a depositary
selected by it, PROVIDED that such agreement shall provide that the holders of
such depositary receipts shall have all the rights, privileges and preferences
to which they are entitled as Beneficial Owners of the Preferred Shares. With
respect to fractional Preferred Shares that are not integral multiples of one
one- hundredth of a Preferred Share, if the Company does not issue fractional
shares of depositary receipts in lieu thereof, the Company shall pay to the
registered holders of Right Certificates at the time such Rights are exercised
as herein provided an amount in cash equal to the same fraction of the current
market value of one one-hundredth of a Preferred Share. For purposes of
this Section 14(b), the current market value of one one-hundredth of a Preferred
Share shall be one one-hundredth of the closing price of Preferred Shares (as
determined pursuant to Section 11(d)(ii)) for the Trading Day immediately prior
to the date of such exercise.
(c) The Company shall not be required to issue fractions of Common
Shares upon exercise of the Rights pursuant to Section 11(a)(ii) or 12(a) or to
distribute certificates which evidence fractional Common Shares. In lieu of
fractional Common Shares, the Company may pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one Common
Share. For the purposes of this Section 14(c), the current market value of one
Common Share shall be the closing price of a Common
25
Share (as determined pursuant to Section 11(d)(i)) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right, by the acceptance of such Right, expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right except as permitted by this Section 14.
Section 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, any registered holder of Common Shares), without the
consent of the Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of Common Shares), may, in 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 shall be entitled to specific performance
of the obligations hereunder 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 such Right, 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 shall be evidenced by
the certificates for Common Shares registered in the name of the holders of such
shares (which certificates for Common Shares shall also constitute certificates
for Rights) and each Right will be transferable only in connection with the
transfer of Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or offices of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer and with the
appropriate form and certificates fully executed;
(c) subject to Sections 6, 7(e) and 11(a)(ii) hereof, 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 certificate for
Common Shares) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificate or the associated certificate for Common Shares made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever; and
26
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder of a
Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, that prohibits or otherwise restrains the
performance of such obligation; provided, however, the Company must use its best
efforts to have any such order, decree or ruling lifted or otherwise overturned
as soon as possible.
Section 17. RIGHT HOLDER AND RIGHT CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER. No holder, as such, of any Right or Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the holder of
Preferred Shares or any other securities of the Company which may at any time be
issuable upon 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 or 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 25), 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
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 Preferred Shares or Common Shares or for other securities of
the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
Person or Persons or otherwise upon the advice of counsel as set forth in
Section 20.
27
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any Person 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 Person succeeding to all or
substantially all of the corporate trust or stock transfer business of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any 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 counter signature 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 Certificate either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such 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 counter signature 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 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 (which may be legal
counsel for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any action taken
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of Current Market Price) be proved or established by the Company
prior to taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proven and established by a certificate signed or
reasonably believed by the Rights Agent to be signed by any one of the Chairman
of the Board, the Chief Executive Officer, the President, any Vice President,
the
28
Treasurer or the Secretary of the Company and delivered to the Rights Agent;
and such certificate shall be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
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
Certificate (except its countersignature thereof) or be required to verify the
same, and 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 authorization, execution and delivery 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 change in the exercisability of
the Rights or any adjustment required under the provisions of Section 11 or 12
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 adjustments
(except with respect to the exercise of Rights evidenced by Right Certificates
after receipt of the certificate described in Section 12); nor shall it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any Common Shares or Preferred Shares to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
shares of Common Shares or Preferred Shares will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing 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 Chief Executive Officer, the President, any Vice
President, the Secretary or the Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer or for any delay in acting
while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or
29
lend money to the Company or otherwise act as fully and freely as though it were
not the 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) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
it believes in good faith that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has not been
completed, the Rights Agent shall not take any further action with respect to
such requested exercise or transfer without first consulting with the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares or Preferred Shares by registered or certified mail, and,
subsequent to the Distribution Date, to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares or Preferred Shares by registered or certified mail, and,
subsequent to the Distribution Date, 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 30 days after such removal or after it has been notified in writing of
such resignation or incapacity by the resigning or incapacitated Rights Agent or
by 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 one of the States thereof, in
good standing, which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or examination by federal
or state authority and which has at the time of its appointment as Rights Agent,
a combined capital and surplus of at least $50 million. After appointment, the
successor Rights Agent shall be vested with the same powers, rights,
30
duties and responsibilities as if it had been originally named as Rights Agent
without further act or deed; but the predecessor Rights Agent shall deliver and
transfer to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance, conveyance, act or
deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and, subsequent to the Distribution Date, 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 resolution of its Board of Directors to reflect any
adjustment or change in the Purchase Price and the number or kind of 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) At any time prior to the earlier of (i) the time that any Person
becomes an Acquiring Person or (ii) the Final Expiration Date, the Board of
Directors may, at its option, redeem all, but not less than all, the then
outstanding Rights at a redemption price of $.01 per Right, as such amount may
be appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (the "REDEMPTION PRICE"). The
Company may, at its option, pay the Redemption Price either in Common Shares
(based on the Current Market Price per Common Share at the time of redemption,
as determined pursuant to Section 11(d)(i)) or cash; PROVIDED, HOWEVER, that if
the Company elects to pay the Redemption Price in Common Shares, the Company
shall not be required to issue any fractional Common Shares and the number of
Common Shares issuable to each holder of Rights shall be rounded down to the
next whole share. The redemption of the Rights by the Board of Directors may be
made effective at such time, on such basis and with such conditions as the Board
of Directors in its sole discretion may establish.
(b) Immediately upon the time of the effectiveness of the redemption of
the Rights pursuant to Section 23(a) or such earlier time as may be determined
by the Board of Directors in the action ordering such redemption (although not
earlier than the time of such action) (such time, the "REDEMPTION DATE") and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so held. Promptly after
the action of the Company ordering the redemption of the Rights, the Company
shall give notice of such redemption to the Rights Agent and the holders of the
then outstanding Rights in the manner set forth in Section 26, PROVIDED,
HOWEVER, that the
31
failure to give, or any defect in, any such notice shall not affect the validity
of such redemption. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of redemption will state the method by which the payment of the
Redemption Price will be made. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time in
any manner other than that specifically set forth in this Section 23 and other
than in connection with the purchase of shares of Common Shares prior to the
Distribution Date.
Section 24. EXCHANGE.
(a) Subject to Section 24(c) and 24(d), the Board of Directors may, at
any time after the time that 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 void pursuant to the provisions of Section
11(a)(ii)) for Common Shares at an exchange ratio of one Common Share per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (the "EXCHANGE RATIO").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any
Subsidiary of the Company, any Grandfathered Stockholder, any Benefit Plan, any
entity holding Common Shares for or pursuant to the terms of any Benefit Plan or
any trustee, administrator or fiduciary of any Benefit Plan), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights in accordance with this Section 24
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of Common Shares equal to the number of
such Rights held by such holder multiplied by the Exchange Ratio. The Company
shall promptly give public notice of any such exchange; 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 Common Shares 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 void pursuant to the provisions of Section 11(a)(ii)) held by
each holder of Rights.
(c) If the number of Common Shares which are authorized by the
Company's Certificate of Incorporation, as amended , and not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights, is
not sufficient to permit any exchange of Rights as contemplated in accordance
with this Section 24, the (i) Company shall take all such action as may be
necessary to authorize
32
additional Common Shares for issuance upon exchange of the Rights or (ii) the
Board of Directors may determine to exchange Common Shares for then outstanding
and exercisable Rights at such exchange ratio of less than one Common Share per
Right, appropriately adjusted as set forth in Section 24(a), so that all (and
not less than all) of the Common Shares issued but not outstanding or authorized
but unissued (and not reserved for issuance other than upon exercise of the
Rights) are issued in the exchange contemplated by this Section 24.
(d) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Preferred Shares or Common Stock Equivalents for Common
Shares exchangeable for Rights, at the initial rate of one one-hundredth of a
Preferred Share (or an appropriate number of Common Stock Equivalents) for each
Common Share, as appropriately adjusted to reflect adjustments in dividend,
liquidation and voting rights of Preferred Shares pursuant to the terms thereof,
so that the fraction of a Preferred Share delivered in lieu of each Common Share
shall have essentially the same voting rights as one Common Share.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company proposes, at any time after the Distribution
Date, (i) to declare or pay any dividend payable in stock of any class to the
holders of Preferred Shares or to make any other distribution to the holders of
Preferred Shares (other than a regular quarterly cash dividend out of earnings
or retained earnings of the Company) or (ii) to offer to the holders of
Preferred Shares options, rights or warrants to subscribe for or to purchase any
additional Preferred Shares or shares of stock of any class or any other
securities, rights or options, or (iii) to effect any reclassification of
Preferred Shares (other than a reclassification involving only the subdivision
of outstanding Preferred Shares), or (iv) to effect any consolidation or merger
with or into any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o)), 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 transaction or a series of related transactions, of more
than 50% of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the Company and/or
any of its Subsidiaries in one or more transactions each of which complies with
Section 11(o)), 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 Certificate, in accordance with Section 26, a notice of such proposed
action to the extent feasible and file a certificate with the Rights Agent to
that effect, which shall specify the record date for the purposes of such stock
dividend, or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution or winding up is to take place and the date of participation therein
by the holders of record of the Preferred 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 20 days prior to the record date for
determining holders of the shares of Preferred Shares for purposes of such
action, and in the case of any such other action, at least 20 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the Preferred Shares, whichever shall be the earlier. The
33
failure to give notice required by this Section 25 or any defect therein shall
not affect the legality or validity of the action taken by the Company or the
vote upon any such action.
(b) Notwithstanding anything in this Agreement to the contrary, prior
to the Distribution Date, a filing by the Company with the Securities and
Exchange Commission shall constitute sufficient notice to the holders of the
securities of the Company, including the Rights, for purposes of this Agreement
and no other notice need be given to such holders.
(c) In case any Section 11(a)(ii) Event shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, notice of
the occurrence of such event, which notice shall specify the event and the
consequences thereof to holders of Rights under Section 11(a)(ii) hereof, and
(ii) all references in Section 25(a) to Preferred Shares shall be deemed
thereafter to refer to Common Shares and/or, if appropriate, other securities.
Section 26. 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 first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
Superior TeleCom Inc.
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Secretary
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Company) as follows:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Corporate Trust Department
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to 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.
34
Section 27. SUPPLEMENTS AND AMENDMENTS. The Company may from time to
time, 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 to cure any ambiguity, to correct or supplement any provision contained
herein which may be defective or inconsistent with any other provision herein,
or to make any change to or delete any provision hereof or to adopt any other
provisions with respect to the Rights which the Company may deem necessary or
desirable; PROVIDED, HOWEVER, that from and after such time as any Person
becomes an Acquiring Person, this Agreement shall not be amended or supplemented
in any manner which would adversely affect the interests of the holders of
Rights (other than an Acquiring Person and its Affiliates and Associates). Any
supplement or amendment authorized by this Section 27 will be evidenced by a
writing signed by the Company and the Rights Agent. Notwithstanding anything in
this Agreement to the contrary, no supplement or amendment that changes the
rights and duties of the Rights Agent under this Agreement will be effective
against the Rights Agent without the execution of such supplement or amendment
by the Rights Agent.
Section 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. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors or 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, without limitation, a determination
to redeem or not redeem the Rights or to amend the Agreement) and whether any
proposed amendment adversely affects the interests of the holders of Right
Certificates. All such actions, calculations, interpretations and determinations
(including, for purpose of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board of Directors in good faith (x)
shall be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Right Certificates and all other parties and (y) shall not
subject the Board to any liability to the holders of the Right Certificates.
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, registered holders of the Common Shares) any legal or equitable right,
remedy or claim under this Agreement; but 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,
registered holders of the Common Shares).
Section 31. 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, void or unenforceable, the
35
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.
Section 32. GOVERNING LAW. This Agreement, each Right 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 the State of Delaware applicable to
contracts to be made and performed entirely within the State of Delaware.
Section 33. 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 34. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
[Remainder of Page is Intentionally Blank]
36
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed, all as of the date first written above.
Attest: SUPERIOR TELECOM INC.
By: By:
------------------------------ ------------------------------
Name: Name:
Title: Title:
AMERICAN STOCK TRANSFER &
Attest: TRUST COMPANY
By: By:
------------------------------ ------------------------------
Name: Name:
Title: Title:
37
EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATION
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
SUPERIOR TELECOM INC.
-----------------------------------------------
(Pursuant to Section 151 of the General Corporation
Law of the State of Delaware)
-----------------------------------------------
Superior TeleCom Inc., a Delaware corporation (the
"CORPORATION"), hereby certifies that the following resolution was adopted by
the Board of Directors of the Corporation as required by Section 151 of the
Delaware General Corporation Law at a meeting duly called and held on December
28, 2000:
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of the Corporation (the "BOARD") in accordance with
the provisions of the Certificate of Incorporation, as amended (the "CERTIFICATE
OF INCORPORATION"), of the Corporation, a series of Preferred Stock, par value
$.01 per share (the "PREFERRED STOCK"), of the Corporation is hereby created and
the designation and number of shares, and the relative rights, preferences and
limitations thereof, are as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series
shall be designated as Series A Junior Participating Preferred Stock, par value
$.01 per share (the "SERIES A PREFERRED STOCK"), and the number of shares
constituting such series shall be 500,000. Such number of shares may be
increased or decreased by resolution of the Board; PROVIDED, HOWEVER, that no
decrease shall reduce the number of shares of Series A 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 any and all
A-1
outstanding options, rights or warrants to purchase, or upon the conversion of
any outstanding securities issued by the Corporation convertible into, Series A
Preferred Stock.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to the rights of the holders of shares of any
series of Preferred Stock ranking prior and superior to the Series A Preferred
Stock with respect to dividends, the holders of shares of Series A Preferred
Stock shall be entitled to receive, when, as and if declared by the Board out of
funds legally available for the purpose, quarterly dividends payable in cash
(except as provided below) on the last day of January, April, July and October
in each year (each such date being referred to herein as a "QUARTERLY DIVIDEND
PAYMENT DATE"), commencing on the first Quarterly Dividend Payment Date after
the first issuance of a share or fraction of a share of Series A Preferred
Stock, in an amount (rounded to the nearest cent), subject to the provision for
adjustment as hereinafter set forth, equal to 100 times the aggregate per share
amount of all cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all non-cash dividends or other distributions, other than a
dividend payable in shares of Common Stock, par value $.01 per share (the
"COMMON STOCK"), of the Corporation or a subdivision of the outstanding shares
of Common Stock (by reclassification or otherwise) declared on the Common Stock
since the immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred Stock. If the Corporation
shall at any time declare or pay any dividend or distribution 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 Series A Preferred Stock were entitled
immediately prior to such event under 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 was
outstanding immediately prior to such event.
(b) The Corporation shall declare a dividend or distribution
on the Series A Preferred Stock as provided in Section 2(a) immediately after it
declares a dividend or distribution on the Common Stock (other than a dividend
or distribution payable in shares of Common Stock).
(c) Dividends due pursuant to Section 2(a) shall begin to
accrue and be cumulative on outstanding shares of Series A Preferred Stock from
the Quarterly Dividend Payment Date immediately preceding the date of issue of
such shares of Series A Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such dividends
shall begin
A-2
to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued
but unpaid dividends shall accumulate but shall not bear interest. Dividends
paid on the shares of Series A 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 may fix a record date for the determination of holders of
shares of Series A 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.
Section 3. VOTING RIGHTS. The holders of Shares of Series A
Preferred Stock shall have the following voting rights:
(a) Subject to the provisions for adjustment as hereinafter
set forth, each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes (and each one one- hundredth of a share of Series A
Preferred Stock shall entitle the holder thereof to one vote) on all matters
submitted to a vote of the stockholders of the Corporation. 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 number of votes per
share to which holders of shares of Series A Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that was outstanding immediately prior to such
event.
(b) Except as otherwise provided in the Certificate of
Incorporation, including any other Certificate of Designation creating a series
of Preferred Stock, or by law, the holders of shares of Series A Preferred Stock
and the holders of shares of Common Stock shall vote together as one class on
all matters submitted to a vote of stockholders of the Corporation.
(c) Except as set forth herein, or as otherwise required by
law, holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any
corporation action.
(d) Nothing herein shall prevent the directors or stockholders
from taking any action to increase the number of authorized shares of Series A
Preferred Stock, increasing the number of authorized shares of Preferred Stock
of a different class than the Series A Preferred Stock or the number of
authorized shares of Common Stock, or changing the par value of the Common Stock
or Preferred Stock, or issuing options, warrants or rights to any class of stock
of the Corporation, as authorized by the Certificate of Incorporation as now in
effect or as it may hereafter be amended.
A-3
Section 4. CERTAIN RESTRICTIONS.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire
for consideration, any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A 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 Series A Preferred Stock, except
dividends paid ratably on the Series A 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; or
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise
acquire shares of any such parity stock in exchange for shares
of any stock of the Corporation ranking junior (both as to
dividends and upon dissolution, liquidation or winding up) to
the Series A Preferred Stock.
(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 Section 4(a),
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. REACQUIRED SHARES. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancellation become authorized but unissued
shares of Preferred Stock, without designation as to series, and may be reissued
as part of a new series of Preferred Stock to be created by resolution of the
Board, subject to the conditions and restrictions on issuance set forth in the
Certificate of Incorporation, including any Certificate of Designations creating
a series of Preferred Stock or any similar stock, or as otherwise required by
law.
A-4
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless, prior thereto, the holders
of shares of Series A Preferred Stock shall have received an aggregate amount
per share, subject to the provision for adjustment hereinafter set forth, equal
to 100 times the aggregate amount to be distributed per share to holders of
Common Stock plus an amount equal to any accrued and unpaid dividends. 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 Series A Preferred Stock were
entitled immediately prior to such event under 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 was
outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction in
which shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, or otherwise changed, then in any
such case each share of Series A 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 100 times the aggregate
amount of stock, securities, cash and/or any other property (payable in kind),
as the case may be, into which or for which each share of Common Stock is
changed or exchanged. 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 Series A 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 was
outstanding immediately prior to such event.
Section 8. RANK. Unless otherwise provided in the Certificate
of Incorporation, including a Certificate of Designation relating to a
subsequent series of Preferred Stock, the Series A Preferred Stock shall rank
junior to all other series of the Preferred Stock as to the payment of dividends
and the distribution of assets on liquidation, dissolution or winding up.
Section 9. FRACTIONAL SHARES. Series A Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise
A-5
voting rights, receive dividends, participate in distributions and to have the
benefit of all other rights of holders of Series A Preferred Stock.
A-6
IN WITNESS WHEREOF, the undersigned has executed this
Certificate of Designation as of this ____ day of January, 2001.
SUPERIOR TELECOM INC.
By:
-----------------------------------
Print name:
Title:
A-7
EXHIBIT B
[Form of Right Certificate]
Certificate No. R-_______ _______ Rights
NOT EXERCISABLE AFTER THE EARLIER OF DECEMBER 28, 2010 AND THE DATE ON WHICH THE
RIGHTS EVIDENCED HEREBY ARE REDEEMED OR EXCHANGED BY THE COMPANY AS SET FORTH IN
THE RIGHTS AGREEMENT. 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 AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE DEFINED
IN THE RIGHTS AGREEMENT) AND CERTAIN RELATED PERSONS, WHETHER CURRENTLY HELD BY
OR ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY BE OR MAY BECOME
NULL AND VOID. [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 AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BE OR MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 11(a)(ii) OF THE RIGHTS AGREEMENT.](1)
RIGHT CERTIFICATE
SUPERIOR TELECOM INC.
This certifies that ___________________, or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of December 28, 2000 (the "Rights Agreement"), between
Superior TeleCom Inc., a Delaware corporation (the "Company"), and American
Stock Transfer & Trust Company (the "Rights Agent"), to purchase from the
Company at any time after the Distribution Date and prior to the Expiration
Date, one one- hundredth of a fully paid, nonassessable share of the Series A
Junior Participating Preferred Stock, par value $.01 per share (the "Preferred
Stock"), of the Company at a purchase price of $10.88 per one one-hundredth of a
share of Preferred Stock (the "Purchase Price") upon presentation and surrender
of this Right Certificate with the Form of Election to Purchase and related
Certificate duly executed.
----------
(1) If applicable, insert this portion of the legend and delete the
preceding sentence.
B-1
Terms used herein and not otherwise defined herein have the meanings
assigned to them in the Rights Agreement.
The number of Rights evidenced by this Right Certificate (and the
number and kind of shares issuable upon exercise of each Right) set forth above
and the Purchase Price set forth above are as of December 28, 2000, and may have
been, or in the future may be, adjusted as a result of the occurrence of certain
events, as more fully set forth in the Rights Agreement.
Upon the occurrence of a Section 11(a)(ii) Event (as set forth in the
Rights Agreement), if the Rights evidenced by this Right Certificate are
Beneficially Owned by (i) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of any such Acquiring Person, Associate or Affiliate or (iii)
under certain circumstances specified in the Rights Agreement, a transferee of a
Person who, concurrent with or after such transfer, became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person, such Rights shall become
null and void and no holder thereof shall have any right with respect to such
Rights from and after the occurrence of such Section 11(a)(ii) Event.
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 the specific circumstances set forth in the Rights Agreement.
Upon surrender at the principal office or offices of the Rights Agent
designated for such purpose and subject to the terms and conditions set forth in
the Rights Agreement, any Right Certificate or Certificates may be transferred
or exchanged for another Right Certificate or Certificates evidencing a like
number of Rights as the Right Certificate or Certificates surrendered.
Subject to the provisions of the Rights Agreement, the Board of
Directors of the Company may, at its option,
(a) at any time prior to the earlier of (i) the time that any
Person becomes an Acquiring Person or (ii) the Final Expiration Date,
redeem all but not less than all the then outstanding Rights at a
redemption price of $.01 per Right (subject to adjustment); or
(b) at any time after the time that any Person becomes an
Acquiring Person (but before such Person, together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Common Shares then outstanding), exchange all or part of
the then outstanding Rights (other than Rights held by the Acquiring
Person and certain
B-2
related Persons) for Common Shares at an exchange ratio of one Common
Share per Right (subject to adjustment).
No fractional shares of Preferred Stock will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one-hundredth of a share of Preferred Stock, which may, at
the election of the Company, be evidenced by depositary receipts); but in lieu
thereof, a cash payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate as such shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of Preferred Stock
or of any other securities of the Company which may at any time be issuable upon
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 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 Rights evidenced by this Right Certificate have been exercised as
provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it has been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of
Attest: SUPERIOR TELECOM INC.
By: By:
------------------------------- ---------------------------------
Secretary Title:
Countersigned:
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Rights Agent
By:
-------------------------------
Authorized Signature
B-3
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 _______________________ 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 Company, with full power of substitution.
Dated: _________________________
______________________________
(Signature)
Signature Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (a
bank, stock broker, savings and loan institution or credit union with membership
in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
of the Securities Exchange Act of 1934.
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not Beneficially Owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
______________________________
(Signature)
B-4
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights represented by the Right
Certificate.)
To: SUPERIOR TELECOM INC.
The undersigned hereby irrevocably elects to exercise
___________________________ Rights represented by this Right Certificate to
purchase the one one-hundredth of a share of Preferred Stock (or such other
number or kind of securities of the Company or of any other person which may be
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 the number of Rights being exercised hereunder are not 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 Guaranteed:
Signatures must be guaranteed by an eligible guarantor institution (a
bank, stock broker, savings and loan institution or credit union with membership
in an approved signature guarantee medallion program) pursuant to Rule 17Ad-15
of the Securities Exchange Act of 1934.
B-5
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not Beneficially Owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
_______________________
Signature
--------------------------------------------------------------------------------
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the Beneficial Owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
B-6
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On December 28, 2000, the Board of Directors of Superior TeleCom Inc.
(the "COMPANY") declared a dividend distribution of one preferred stock purchase
right (a "RIGHT") for each outstanding share of Common Stock, $.01 par value, of
the Company (the "COMMON SHARES"), payable to the stockholders of record on
January 10, 2001 (the "RECORD DATE"). The Board of Directors also authorized and
directed the issuance of one Right with respect to each Common Share issued
thereafter until the Distribution Date (as defined below) (or the earlier
redemption or expiration of the Rights).
Except as set forth below, each Right, when it becomes exercisable,
entitles the registered holder to purchase one one-hundredth of a share of
Series A Junior Participating Preferred Stock, $.01 par value (the "PREFERRED
SHARES"), at a price of $10.88, subject to adjustment (the "PURCHASE PRICE").
The description and terms of the Rights are set forth in a Rights Agreement (the
"RIGHTS AGREEMENT") between the Company and American Stock Transfer & Trust
Company, as Rights Agent (the "RIGHTS AGENT"), dated as of December 28, 2000.
Initially, the Rights will be attached to all certificates representing
Common Shares then outstanding, and no separate Right Certificates (as
hereinafter defined) will be distributed. The Rights will separate from the
Common Shares upon the earliest to occur of (i) the tenth day after public
disclosure that a person or entity (a "PERSON") or group of affiliated or
associated Persons (a "GROUP") has acquired beneficial ownership of 15% or more
of the outstanding Common Shares (except pursuant to a Permitted Offer, as
hereinafter defined); or (ii) 10 business days (or such later date as the Board
of Directors may determine) following the commencement of, or announcement of an
intention to make, a tender offer or exchange offer the consummation of which
would result in a Person or Group becoming an Acquiring Person (as hereinafter
defined) (the earliest of such dates being called the "DISTRIBUTION DATE"). A
Person or Group whose acquisition of Common Shares causes a Distribution Date
pursuant to clause (i) above is an "ACQUIRING PERSON." The date that a Person or
Group becomes an Acquiring Person is the "STOCK ACQUISITION DATE."
Notwithstanding the foregoing, none of The Alpine Group, Inc., the
Company's majority stockholder, Xxxxxx X. Xxxxxx, the Chairman and Chief
Executive Officer of the Company, or any of their affiliates or associates will
be deemed to be Acquiring Persons and their ownership will not cause a
Distribution Date.
In addition, a Person who acquires Common Shares pursuant to a tender
or exchange offer which is for all outstanding Common Shares at a price and on
terms which the Board of Directors determines (prior to acquisition) to be
adequate and in the best interests of the Company and its stockholders (other
than such Person, its affiliates and associates) (a "PERMITTED OFFER") will not
be deemed to be an Acquiring Person and such Person's ownership will not
constitute a Distribution Date.
C-1
The Preferred Shares purchasable upon exercise of the Rights will be
entitled, when, as and if declared, to receive a minimum preferential quarterly
dividend payment of an amount equal to 100 times the dividend declared per
Common Share. In the event of a liquidation, dissolution or winding up of the
Company, the holders of the Preferred Shares will be entitled to receive a
minimum liquidation payment of an amount equal to 100 times the payment made per
Common Share. Each Preferred Share will have 100 votes, voting together with the
Common Shares. In the event of any merger, consolidation or other transaction in
which Common Shares are exchanged, each Preferred Share will be entitled to
receive 100 times the amount and type of consideration received per Common
Share. The rights of the Preferred Shares as to dividends and liquidation, and
in the event of mergers and consolidation, are protected by customary anti-
dilution provisions.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon the transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares outstanding as of the Record Date, even without such notation or a
copy of this Summary of Rights being attached thereto, will also constitute the
transfer of the Rights associated with the Common Shares represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights ("RIGHT CERTIFICATES") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date (and to each initial record holder of certain Common Shares
issued after the Distribution Date), and such separate Right Certificates alone
will evidence the Rights.
THE RIGHTS ARE NOT EXERCISABLE UNTIL THE DISTRIBUTION DATE, and will
expire at the close of business on December 28, 2010, unless earlier redeemed by
the Company as described below.
In the event that any Person becomes an Acquiring Person, each holder
of Rights (other than Rights that have become null and void as described below)
will thereafter have the right (the "FLIP-IN RIGHT") to receive, upon exercise
of such Rights, the number of Common Shares (or, in certain circumstances, other
securities of the Company) having a value (immediately prior to such triggering
event) equal to two times the aggregate exercise price of such Rights. For
example, if a Person became an Acquiring Person at a time when the current per
share market price of the Company's Common Shares is $20 and the Purchase Price
was $100, each holder of a Right (other than a Right which has become null and
void as described herein) would have the right to receive ten Common Shares upon
exercise of the Right and payment of the Purchase Price of $100. Following the
occurrence of the event described above, all Rights that are or (under certain
circumstances specified in the Rights Agreement) were beneficially owned by any
Acquiring Person or any affiliate or associate thereof or certain transferees
thereof will be null and void.
C-2
The Board, at its option, may at any time after any Person becomes an
Acquiring Person exchange all or part of the then issued and outstanding Rights
(other than those that have become null and void as described above) for Common
Shares at an exchange ratio of one Common Share per Right in lieu of the Flip-In
Right, provided no Person is the beneficial owner of 50% or more of the Common
Shares at the time of such exchange.
In the event that, at any time following the Stock Acquisition Date,
(i) the Company is acquired in a merger or other business combination
transaction in which the holders of all of the outstanding Common Shares
immediately prior to the consummation of the transaction are not the holders of
all of the surviving corporation's voting power or (ii) more than 50% of the
Company's assets or earning power is sold or transferred, then each holder of
Rights (except Rights which previously have been voided as set forth above)
shall thereafter have the right (the "FLIP-OVER RIGHT") to receive, upon
exercise of such Rights, common shares of the acquiring company (or, in certain
circumstances, its parent) having a value equal to two times the aggregate
exercise price of the Rights. The Flip-Over Right shall not apply to any
transaction described in clause (i) if such transaction is with a Person or
Persons (or a wholly owned subsidiary of any such Person or Persons) that
acquired Common Shares pursuant to a Permitted Offer and the price and form of
consideration offered in such transaction is the same as that paid to all
holders of Common Shares whose shares were purchased pursuant to the Permitted
Offer. The holder of a Right will continue to have the Flip-Over Right whether
or not such holder exercises or surrenders the Flip-In Right.
The Purchase Price payable, and the number of Common Shares or other
securities issuable, upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Common Shares.
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Common Shares will be issued and, in lieu
thereof, an adjustment in cash will be made based on the market price of the
Common Shares on the last trading day prior to the date of exercise.
At any time prior to the earlier to occur of (i) a Person becoming an
Acquiring Person or (ii) the expiration of the Rights, the Company may redeem
the Rights in whole, but not in part, at a price of $.01 per Right (the
"REDEMPTION PRICE"), which redemption shall be effective at such time, on such
basis and with such conditions as the Board of Directors may establish in its
sole discretion. The Company may, at its option, pay the Redemption Price in
Common Shares.
All of the provisions of the Rights Agreement may be amended by the
Board of Directors prior to the Distribution Date. After the Distribution Date,
the provisions of the Rights Agreement may be amended by the Board of Directors
in order to cure any ambiguity, defect or inconsistency, to make changes which
do not adversely affect the interests of holders of Rights (excluding the
interests of any
C-3
Acquiring Person), or, subject to certain limitations, to shorten or lengthen
any time period under the Rights Agreement.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders of the Company, stockholders may, depending upon the
circumstances, recognize taxable income should the Rights become exercisable or
upon the occurrence of certain events thereafter.
A copy of the Rights Agreement has been 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.
C-4
