SHAREHOLDER PROTECTION RIGHTS AGREEMENT
BETWEEN
PARKERVISION, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY, AS RIGHTS AGENT
NOVEMBER 21, 2005
TABLE OF CONTENTS
Page
----
ARTICLE I....................................................................1
CERTAIN DEFINITIONS..........................................................1
1.1 Certain Definitions..................................................1
ARTICLE II THE RIGHTS......................................................5
2.1 Issuance of Rights Certificates; Legend..............................5
2.2 Exercise of Rights; Separation of Rights.............................5
2.3 Adjustments to Exercise Price; Number of Rights......................7
2.4 Date on Which Exercise is Effective..................................7
2.5 Execution, Authentication, Delivery and Dating of
Rights Certificates..................................................8
2.6 Registration, Registration of Transfer and Exchange..................8
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates............9
2.8 Persons Deemed Owners................................................9
2.9 Delivery and Cancellation of Certificates. ........................10
2.10 Agreement of Rights Holders.........................................10
ARTICLE III ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN
TRANSACTIONS..................................................10
3.1 Flip-In.............................................................10
3.2 Flip-Over...........................................................12
ARTICLE IV THE RIGHTS AGENT.................................................13
4.1 General.............................................................13
4.2 Merger or Consolidation or Change of Name of Rights Agent...........13
4.3 Duties of Rights Agent:.............................................14
4.4 Change of Rights Agent..............................................15
ARTICLE V MISCELLANEOUS...................................................16
5.1 Redemption..........................................................16
5.2 Expiration..........................................................16
5.3 Issuance of New Rights Certificates.................................16
5.4 Supplements and Amendments..........................................17
5.5 Fractional Shares...................................................17
5.6 Rights of Action....................................................17
5.7 Holder of Rights Not Deemed a Stockholder...........................18
5.8 Notice of Proposed Actions..........................................18
5.9 Notices.............................................................18
5.10 Suspension of Exercisability........................................18
5.11 Costs of Enforcement................................................19
5.12 Successors..........................................................19
5.13 Benefits of this Agreement..........................................19
5.14 Determination and Actions by the Board of Directors, Etc............19
5.15 Descriptive Headings................................................19
5.16 Governing Law.......................................................19
5.17 Counterparts........................................................19
5.18 Severability........................................................19
i
SHAREHOLDER PROTECTION RIGHTS AGREEMENT
THIS SHAREHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time to
time, this "Agreement") is made and entered into as of November 21, 2005,
between ParkerVision, Inc., a Florida corporation (the "Corporation"), and
American Stock Transfer & Trust Company, as rights agent (the "Rights Agent,"
which term shall include any successor rights agent hereunder).
W I T N E S S E T H:
WHEREAS, on October 18, 2005, the Board of Directors of the Corporation
has authorized the issuance of one right ("Right") in respect of each share of
Common Stock which is or becomes outstanding after the Record Time (as
hereinafter defined) and prior to the Separation Time (as hereinafter defined);
WHEREAS, subject to Sections 3.1, 5.1 and 5.10, each Right entitles the
holder thereof, after the Separation Time, to purchase securities of the
Corporation (or, in certain cases, of certain other entities) pursuant to the
terms and subject to the conditions set forth herein; and
WHEREAS, the Corporation desires to appoint the Rights Agent to act on
behalf of the Corporation, and the Rights Agent is willing so to act, in
connection with the issuance, transfer, exchange and replacement of Rights
Certificates (as hereinafter defined), the exercise of Rights and other matters
referred to herein.
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
-------------------
1.1 Certain Definitions. For purposes of this Agreement, the following
terms have the meanings indicated:
"Acquiring Person" shall mean any Person who, alone or together with all
Affiliates and Associates of such Person, is a Beneficial Owner of 15% or more
of the outstanding shares of Common Stock; provided, however, that the term
"Acquiring Person" shall not include any Person (i) who is the Beneficial Owner
of 15% or more of the outstanding shares of Common Stock on the date of this
Agreement or who shall become the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock solely as a result of an acquisition by the
Corporation of shares of Common Stock, until such time hereafter or thereafter
as any such Person shall become the Beneficial Owner (other than by means of a
stock dividend or stock split) of any additional shares of Common Stock, (ii)
who is the Beneficial Owner of 15% or more of the outstanding shares of Common
Stock but who acquired Beneficial Ownership of shares of Common Stock without
any plan or intention to seek or affect control of the Corporation, if such
Person promptly enters into an irrevocable commitment promptly to divest, and
thereafter promptly divests (without exercising or retaining any power,
including voting power, with respect to such shares), sufficient shares of
Common Stock (or securities convertible into, exchangeable into or exercisable
for Common Stock) so that such Person ceases to be the Beneficial Owner of 15%
or more of the outstanding shares of Common Stock or (iii) who Beneficially Owns
shares of Common Stock consisting solely of one or more of (A) shares of Common
Stock Beneficially Owned pursuant to the grant or exercise of an option granted
to such Person by the Corporation in connection with an agreement to merge with,
or acquire, the Corporation entered into prior to a Flip-In Date, (B) shares of
Common Stock (or securities convertible into, exchangeable into or exercisable
for Common Stock) Beneficially Owned by such Person or its Affiliates or
Associates at the time of grant of such option or (C) shares of Common Stock (or
securities convertible into, exchangeable into or exercisable for Common Stock)
acquired by Affiliates or Associates of such Person after the time of such grant
which, in the aggregate, amount to less than 1% of the outstanding shares of
Common Stock.
1
In addition, the following shall not be deemed Acquiring Persons: (i) Mr.
Xxxxxxx Xxxxxx (the Corporation's current chief executive officer) and his
affiliates and family members; (ii) the Corporation; (iii) any wholly owned
Subsidiary of the Corporation; and (iv) any employee stock ownership or other
employee benefit plan of the Corporation or a wholly owned Subsidiary of the
Corporation.
"Affiliate" and "Associate" shall have the respective meanings ascribed to
such terms in Rule 12b-2 under the Securities Exchange Act of 1934, as amended
(the "Securities Exchange Act"), as such Rule is in effect on the date of this
Agreement.
A Person shall be deemed the "Beneficial Owner" of, and to have
"Beneficial Ownership" of, and to "Beneficially Own," any securities of which
such Person (or any of such Person's Affiliates or Associates) is or may be
deemed to be the beneficial owner pursuant to Rules 13d-3 and 13d-5 under the
Securities Exchange Act, as such Rules are in effect on the date of this
Agreement, as well as any securities as to which such Person (or any of such
Person's Affiliates or Associates) has the right to become Beneficial Owner
(whether such right is exercisable immediately or only after the passage of time
or the occurrence of conditions) pursuant to any agreement, arrangement or
understanding, or upon the exercise of conversion rights, exchange rights, other
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 have
"Beneficial Ownership" of, or to "Beneficially Own," any security (i) solely
because such security has been tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or Associates until such
tendered security is accepted for payment or exchange or (ii) solely because
such Person or any of such Person's Affiliates or Associates has or shares the
power to vote or direct the voting of such security pursuant to a revocable
proxy given in response to a public proxy or consent solicitation made to more
than ten holders of shares of a class of stock of the Corporation registered
under Section 12 of the Securities Exchange Act and pursuant to, and in
accordance with, the applicable rules and regulations under the Securities
Exchange Act, except if such power (or the arrangements relating thereto) is
then reportable by such Person on Schedule 13D under the Securities Exchange Act
(or any similar provision of a comparable or successor report). Notwithstanding
the foregoing, no officer or director of the Corporation shall be deemed to
Beneficially Own any securities of any other Person by virtue of any actions
such officer or director takes in such capacity. For purposes of this Agreement,
any calculation of the number of shares of Common Stock outstanding at any time,
including for purposes of determining the percentage of the outstanding shares
of Common Stock with respect to which a Person is the Beneficial Owner, shall be
made in accordance with the provisions of Rule 13d-3(d)(1) under the Securities
Exchange Act.
"Business Day" shall mean any day other than a Saturday, Sunday or a day
on which banking institutions in New York, New York are generally authorized or
obligated by law or executive order to close.
"Close of Business" on any given date shall mean 5:00 p.m. New York, New
York time on such date (or, if such date is not a Business Day, 5:00 p.m.
Jacksonville, Florida time on the next succeeding Business Day).
"Common Stock" shall mean the shares of Common Stock, par value $0.01 per
share, of the Corporation.
2
"Exchange Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 3.1(c).
"Exercise Price" shall mean, as of any date, the price at which a holder
may purchase the securities issuable upon exercise of one whole Right. Until
adjustment thereof in accordance with the terms hereof, the Exercise Price shall
equal $45.00.
"Expiration Time" shall mean the earliest of (i) the Exchange Time, (ii)
the Redemption Time, and (iii) November 21, 2015.
"Flip-In Date" shall mean the tenth Business Day after any Stock
Acquisition Date or such earlier or later date as the Board of Directors of the
Corporation may from time to time fix by resolution adopted prior to the Flip-In
Date that would otherwise have occurred.
"Flip-Over Entity" for purposes of Section 3.2, shall mean (i) in the case
of a Flip-Over Transaction or Event described in clause (i) of the definition
thereof, the Person issuing any securities, cash or other property into which
shares of Common Stock are being converted or exchanged and, if no such
securities are being issued, any other party to such Flip-Over Transaction or
Event and (ii) in the case of a Flip-Over Transaction or Event referred to in
clause (ii) of the definition thereof, the Person receiving the greatest portion
of the assets or earning power being transferred in such Flip-Over Transaction
or Event; provided in all cases if such Person is a subsidiary of another
Person, the ultimate controlling Person that is not an individual shall be the
Flip-Over Entity.
"Flip-Over Stock" shall mean the capital stock (or similar equity
interest) with the greatest voting power in respect of the election of directors
(or other Persons similarly responsible for direction of the business and
affairs) of the Flip-Over Entity.
"Flip-Over Transaction or Event" shall mean a transaction or series of
transactions after a Flip-In Date in which, directly or indirectly, (i) the
Corporation shall consolidate or merge or participate in a business combination
with any other Person and the Corporation is not the surviving corporation, or
all or any part of the Corporation's Common Stock is converted or exchanged for
securities, cash or property of the other Person or (ii) the Corporation shall
sell or otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer) assets (A) aggregating more than 50% of the assets (measured
by either book value or fair market value) or (B) generating more than 50% of
the operating income or cash flow, of the Corporation and its Subsidiaries
(taken as a whole) to any Person (other than the Corporation or one or more of
its wholly owned Subsidiaries) or to two or more such Persons which are
Affiliates or Associates or otherwise acting in concert.
"Market Price" per share of any securities on any date shall mean the
average of the daily closing prices per share of such securities (determined as
described below) on each of the 20 consecutive Trading Days through and
including the Trading Day immediately preceding such date; provided, however,
that if an event of a type analogous to any of the events described in Section
2.3 shall have caused the closing prices used to determine the Market Price on
any Trading Days during such period of 20 Trading Days not to be fully
comparable with the closing price on such date, each such closing price so used
shall be appropriately adjusted in order to make it fully comparable with the
closing price on such date. The closing price per share of any securities on any
date shall be the last reported sale price, regular way, or, in case no such
sale takes place or is quoted on such date, the average of the closing bid and
asked prices, regular way, for each share of such securities, 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, Inc.
or, if the securities are not listed or admitted to trading on the New York
Stock Exchange, Inc., as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the securities are listed or admitted to trading
or, if the securities are not listed or admitted to trading on any national
securities exchange, as reported by the Nasdaq Stock Market or the OTC Bulletin
Board; provided, however, that if on any such date the securities are not listed
or admitted to trading on a national securities exchange or traded in the
over-the-counter market, the closing price per share of such securities on such
date shall mean the fair value per share of securities on such date as
determined in good faith by the Board of Directors of the Corporation, after
consultation with a nationally recognized investment banking firm, and set forth
in a certificate delivered to the Rights Agent.
3
"Person" shall mean any individual, firm, partnership, association, group
(as such term is used in Rule 13d-5 under the Securities Exchange Act, as such
Rule is in effect on the date of this Agreement), corporation or other entity.
"Preferred Stock" shall mean the Series E Preferred Stock, par value $0.01
per share, of the Corporation created by the Certificate of Designations in
substantially the form set forth in Exhibit B hereto, appropriately completed.
"Record Time" shall mean the time immediately prior to the time when the
transactions contemplated by the Plan become effective.
"Redemption Price" shall mean an amount per Right equal to one cent, $.01.
"Redemption Time" shall mean the time at which the right to exercise the
Rights shall terminate pursuant to Section 5.1.
"Separation Time" shall mean the Close of Business on the earlier of (i)
the tenth Business Day (or such later date as the Board of Directors of the
Corporation may from time to time fix by resolution adopted prior to the
Separation Time that would otherwise have occurred) after the date on which any
Person commences a tender or exchange offer which, if consummated, would result
in such Person's becoming an Acquiring Person and (ii) the Flip-In Date;
provided, that if any tender or exchange offer referred to in clause (i) of this
paragraph is canceled, terminated or otherwise withdrawn prior to the Separation
Time without the purchase of any shares of Common Stock pursuant thereto, such
offer shall be deemed, for purposes of this paragraph, never to have been made.
"Stock Acquisition Date" shall mean the first date of public announcement
by the Corporation (by any means) that an Acquiring Person has become such.
"Subsidiary" of any specified Person shall mean any corporation or other
entity of which a majority of the voting power of the equity securities or a
majority of the equity interests is Beneficially Owned, directly or indirectly,
by such Person.
"Trading Day," when used with respect to any securities, shall mean a day
on which the New York Stock Exchange, Inc. is open for the transaction of
business or, if such securities are not listed or admitted to trading on the New
York Stock Exchange, Inc., a day on which the principal national securities
exchange on which such securities are listed or admitted to trading is open for
the transaction of business or, if such securities are not listed or admitted to
trading on any national securities exchange, a day on which the Nasdaq Stock
Market, OTC Bulletin Board or such other system then in use is open for the
transaction of business or, if such securities are not listed or admitted to
trading on any national securities exchange or quoted on any such system, a
Business Day.
4
ARTICLE II
THE RIGHTS
----------
2.1 Issuance of Rights Certificates; Legend. Subject to Sections 2.3 and
5.3, one Right shall be issued in respect of each share of Common Stock that is
or becomes outstanding (whether by original issuance or out of treasury, but
other than in a transaction contemplated by Section 2.3) after the Record Time
but prior to the Separation Time. Certificates for the Common Stock issued after
the Record Time but prior to the Separation Time shall evidence, in addition to
the Common Stock represented by such certificate, one Right for each share of
Common Stock represented thereby and shall have impressed on, printed on,
written on or otherwise affixed to them the following legend:
"Until the Separation Time (as defined in the Rights Agreement referred to
below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Stockholder Protection Rights Agreement,
dated as of November 21, 2005 (as such may be amended from time to time,
the "Rights Agreement"), between ParkerVision, Inc. (the "Corporation")
and American Stock Transfer & Trust Company, as Rights Agent, the terms of
which are hereby incorporated herein by reference and a copy of which is
on file at the principal executive offices of the Corporation. Under
certain circumstances, as set forth in the Rights Agreement, such Rights
may be redeemed, may become exercisable for securities or assets of the
Corporation or of another entity, may be exchanged for shares of Common
Stock or other securities or assets of the Corporation, may expire, may
become void (if they are "Beneficially Owned" by an "Acquiring Person" or
an Affiliate or Associate thereof, as such terms are defined in the Rights
Agreement, or by any transferee of any of the foregoing) or may be
evidenced by separate certificates and may no longer be evidenced by this
certificate. The Corporation will mail or arrange for the mailing of a
copy of the Rights Agreement to the holder of this certificate without
charge promptly after the receipt of a written request therefor."
Certificates representing shares of Common Stock that are issued and outstanding
at the Record Time shall evidence, in addition to the Common Stock represented
by such certificate, one Right for each share of Common Stock evidenced thereby
notwithstanding the absence of the foregoing legend.
2.2 Exercise of Rights; Separation of Rights.
-----------------------------------------
(a) Subject to Sections 3.1, 5.1 and 5.10 and subject to adjustment
as herein set forth, each Right will entitle the holder thereof, after the
Separation Time and prior to the Expiration Time, to purchase, for the Exercise
Price, one ten-thousandth (1/10,000th) of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised and
(ii) each Right will be evidenced by the certificate that evidences the share of
Common Stock with which it is associated and will be transferable only together
with, and will be transferred by a transfer of, such associated share of Common
Stock, and the surrender for transfer of any certificates representing
outstanding Common Stock will also constitute the surrender for transfer of the
Rights associated with the Common Stock represented by such certificate.
(c) Subject to this Section 2.2 and to Sections 3.1, 5.1 and 5.10,
after the Separation Time and prior to the Expiration Time, the Rights (i) may
be exercised and (ii) may be transferred independently of shares of Common
Stock. Promptly following the Separation Time, the Rights Agent will mail to
each holder of record of Common Stock as of the Separation Time (other than any
Person whose Rights have become void pursuant to Section 3.1(b)), at such
holder's address as shown by the records of the Corporation (the Corporation
hereby agreeing to furnish copies of such records to the Rights Agent for this
purpose), (x) a certificate (a "Rights Certificate") in substantially the form
of Exhibit A hereto appropriately completed, representing the number of Rights
held by such holder at the Separation Time and having such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Corporation may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any national securities exchange or quotation system
on which the Rights may from time to time be listed or traded, or to conform to
usage, and (y) a disclosure statement describing the Rights.
5
(d) Subject to Sections 3.1, 5.1 and 5.10, Rights may be exercised
on any Business Day after the Separation Time and prior to the Expiration Time
by submitting to the Rights Agent the Rights Certificate evidencing such Rights
with an Election to Exercise (an "Election to Exercise") substantially in the
form attached to the Rights Certificate, duly completed, accompanied by payment
by certified or official bank check or money order payable to the order of the
Corporation, of a sum equal to the Exercise Price multiplied by the number of
Rights being exercised and a sum sufficient to cover any transfer tax or charge
that may be payable in respect of any transfer involved in the transfer or
delivery of Rights Certificates or the issuance or delivery of certificates for
shares or depositary receipts (or both) in a name other than that of the holder
of the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to
Exercise accompanied by payment as set forth in Section 2.2(d), and subject to
Sections 3.1, 5.1 and 5.10, the Rights Agent promptly will (i)(A) requisition
from the Corporation's transfer agent(s) stock certificates evidencing such
number of shares or other securities to be purchased (the Corporation hereby
irrevocably authorizing its transfer agents to comply with all such
requisitions) and (B) if the Corporation elects pursuant to Section 5.5 not to
issue certificates representing fractional shares, requisition from the
depositary selected by the Corporation depositary receipts representing the
fractional shares to be purchased or requisition from the Corporation the amount
of cash to be paid in lieu of fractional shares in accordance with Section 5.5
and (ii) after receipt of such certificates, depositary receipts and/or cash,
deliver the same to or upon the order of the registered holder of such Rights
Certificate, registered (in the case of certificates or depositary receipts) in
such name or names as may be designated by such holder. In the event that the
Corporation elects pursuant to Section 3.1(e) to issue other securities and/or
assets of the Corporation upon exercise of the Rights, the Corporation will make
all arrangements necessary so that such other securities and/or assets of the
Corporation are available for distribution by the Rights Agent, if and when
appropriate.
(f) In case the holder of any Rights shall exercise less than all
the Rights evidenced by such holder's Rights Certificate, a new Rights
Certificate evidencing the Rights remaining unexercised will be issued by the
Rights Agent to such holder or to such holder's duly authorized assigns.
(g) The Corporation covenants and agrees that it will (i) take all
such action as may be necessary to ensure that all shares delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered and fully paid and nonassessable;
(ii) take all such action as may be necessary to comply with any applicable
requirements of the Securities Act of 1933, as amended, or the Securities
Exchange Act, and the rules and regulations thereunder, and any other applicable
law, rule or regulation, in connection with the issuance of any shares upon
exercise of Rights; and (iii) pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued upon the
exercise of Rights, provided that the Corporation shall not be required to pay
any transfer tax or charge that may be payable in respect of any transfer
involved in the transfer or delivery of Rights Certificates or the issuance or
delivery of certificates for shares in a name other than that of the holder of
the Rights being transferred or exercised.
6
2.3 Adjustments to Exercise Price; Number of Rights.
------------------------------------------------
(a) In the event the Corporation shall at any time after the Record
Time and prior to the Separation Time (i) declare or pay a dividend on Common
Stock payable in Common Stock, (ii) subdivide the outstanding Common Stock, or
(iii) combine the outstanding Common Stock into a smaller number of shares of
Common Stock, (x) the Exercise Price in effect after such adjustment will be
equal to the Exercise Price in effect immediately prior to such adjustment
divided by the number of shares of Common Stock (the "Expansion Factor") that a
holder of one share of Common Stock immediately prior to such dividend,
subdivision or combination would hold thereafter as a result thereof (assuming
for such purpose that the Corporation would issue a fraction of a share of
Common Stock, as applicable, and without giving effect to any requirement that
cash be paid in lieu of the issuance of any fractional share interest) and (y)
each Right held prior to such adjustment will become that number of Rights equal
to the Expansion Factor, and the adjusted number of Rights will be deemed to be
distributed among the shares of Common Stock with respect to which the original
Rights were associated (if they remain outstanding) and the shares issued in
respect of such dividend, subdivision or combination, so that each such share of
Common Stock will have exactly one Right associated with it. Each adjustment
made pursuant to this paragraph shall be made as of the payment or effective
date for the applicable dividend, subdivision or combination.
(b) In the event the Corporation shall at any time after the Record
Time and prior to the Separation Time issue or distribute any securities or
assets in respect of, in lieu of or in exchange for Common Stock (other than
pursuant to a regular periodic cash dividend or a dividend paid solely in Common
Stock) whether by dividend, in a reclassification or recapitalization (including
any such transaction involving a merger, consolidation or share exchange), or
otherwise, the Corporation shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property purchasable upon
exercise of Rights as the Board of Directors of the Corporation, in its sole
discretion, may deem to be appropriate under the circumstances in order to
adequately protect the interests of the holders of Rights generally, and the
Corporation and the Rights Agent shall amend this Agreement as necessary to
provide for such adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this
Section 2.3 shall be calculated to the nearest cent. Whenever an adjustment to
the Exercise Price is made pursuant to this Section 2.3, the Corporation shall
(i) promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment and (ii) promptly file
with the Rights Agent and with each transfer agent for the Common Stock a copy
of such certificate. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein and shall not be deemed to have
knowledge of any such adjustment unless and until it shall have received such a
certificate.
Rights Certificates shall represent the right to purchase the securities
purchasable under the terms of this Agreement, including any adjustment or
change in the securities purchasable upon exercise of the Rights, even though
such certificates may continue to express the right to purchase the securities
purchasable at the time of issuance of the initial Rights Certificates.
2.4 Date on Which Exercise is Effective. Each person in whose name any
certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on the date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Exercise Price for such Rights (and any
applicable taxes and other governmental charges payable by the exercising holder
hereunder) was made; provided, however, that if the date of such surrender and
payment is a date upon which the stock transfer books of the Corporation are
closed, such person shall be deemed to have become the record holder of such
shares on, and such certificate shall be dated, the next succeeding Business Day
on which the stock transfer books of the Corporation are open.
7
2.5 Execution, Authentication, Delivery and Dating of
-------------------------------------------------
Rights Certificates.
--------------------
(a) The Rights Certificates shall be executed on behalf of the
Corporation by its Chairman of the Board, Chief Executive Officer, President or
one of its Vice Presidents, under its corporate seal reproduced thereon and
attested by its Secretary or one of its Assistant Secretaries. The signature of
any of these officers on the Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of
individuals who were at the time of such signature the proper officers of the
Corporation shall bind the Corporation, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the countersignature and
delivery of such Rights Certificates.
Promptly after the Separation Time, the Corporation will notify the Rights
Agent of such Separation Time and will deliver Rights Certificates executed by
the Corporation to the Rights Agent for countersignature, and, subject to
Section 3.1(b), an authorized signatory of the Rights Agent shall manually
countersign and deliver such Rights Certificates to the holders of the Rights
pursuant to Section 2.2(c). No Rights Certificate shall be valid for any purpose
unless manually countersigned by an authorized signatory of the Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.6 Registration, Registration of Transfer and Exchange.
----------------------------------------------------
(a) After the Separation Time, the Corporation will cause to be kept
a register (the "Rights Register") in which, subject to such reasonable
regulations as it may prescribe, the Corporation will provide for the
registration and transfer of Rights. The Rights Agent is hereby appointed
"Rights Registrar" for the purpose of maintaining the Rights Register for the
Corporation and registering Rights and transfers of Rights after the Separation
Time as herein provided. In the event that the Rights Agent shall cease to be
the Rights Registrar, the Rights Agent will have the right to examine the Rights
Register at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon surrender
for registration of transfer or exchange of any Rights Certificate, and subject
to the provisions of this Section 2.6(a) and Sections 2.6(c) and 2.6(d), the
Corporation will execute and the Rights Agent will countersign and deliver, in
the name of the holder or the designated transferee or transferees, as required
pursuant to the holder's instructions, one or more new Rights Certificates
evidencing the same aggregate number of Rights as did the Rights Certificate so
surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights
issued upon any registration of transfer or exchange of Rights Certificates
shall be the valid obligations of the Corporation, and such Rights shall be
entitled to the same benefits under this Agreement as the Rights surrendered
upon such registration of transfer or exchange.
8
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Corporation or the Rights
Agent, as the case may be, duly executed by the holder thereof or such holder's
attorney duly authorized in writing. Neither the Rights Agent nor the
Corporation shall be obligated to take any action whatsoever with respect to the
transfer of any such surrendered Rights Certificates until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Corporation
shall reasonably request. As a condition to the issuance of any new Rights
Certificate under this Section 2.6, the Corporation may require the payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in relation thereto.
(d) The Corporation shall not be required to register the transfer
or exchange of any Rights after such Rights have become void under Section
3.1(b), been exchanged under Section 3.1(c) or been redeemed under Section 5.1.
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates.
----------------------------------------------------------
(a) If any mutilated Rights Certificate is surrendered to the Rights
Agent prior to the Expiration Time, then, subject to Sections 3.1(b), 3.1(c) and
5.1, the Corporation shall execute and the Rights Agent shall countersign and
deliver in exchange therefor a new Rights Certificate evidencing the same number
of Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Corporation and the Rights
Agent prior to the Expiration Time (i) evidence to their satisfaction of the
destruction, loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by them to save each of them and any of their
agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Corporation or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Corporation shall
execute and upon its request the Rights Agent shall countersign and deliver, in
lieu of any such destroyed, lost or stolen Rights Certificate, a new Rights
Certificate evidencing the same number of Rights as did the Rights Certificate
so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate
under this Section 2.7, the Corporation may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.7
in lieu of any destroyed, lost or stolen Rights Certificate shall evidence an
original additional contractual obligation of the Corporation, whether or not
the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and, subject to Section 3.1(b), shall be entitled to all
the benefits of this Agreement equally and proportionately with any and all
other Rights duly issued hereunder.
2.8 Persons Deemed Owners. Prior to due presentment of a Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) for registration of transfer, the Corporation, the Rights Agent and
any agent of the Corporation or the Rights Agent may deem and treat the person
in whose name such Rights Certificate (or, prior to the Separation Time, such
Common Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby for all purposes whatsoever, and neither the
Corporation nor the Rights Agent shall be affected by any notice to the
contrary. As used in this Agreement, unless the context otherwise requires, the
term "holder" of any Rights shall mean the registered holder of such Rights (or,
prior to the Separation Time, the associated shares of Common Stock).
9
2.9 Delivery and Cancellation of Certificates. All Rights Certificates
surrendered upon exercise or for registration of transfer or exchange shall, if
surrendered to any Person other than the Rights Agent, be delivered to the
Rights Agent and, in any case, shall be promptly canceled by the Rights Agent.
The Corporation may at any time deliver to the Rights Agent for cancellation any
Rights Certificates previously countersigned and delivered hereunder which the
Corporation may have acquired in any manner whatsoever, and all Rights
Certificates so delivered shall be promptly canceled by the Rights Agent. No
Rights Certificates shall be countersigned in lieu of or in exchange for any
Rights Certificates canceled as provided in this Section 2.9, except as
expressly permitted by this Agreement. The Rights Agent shall return all
canceled Rights Certificates to the Corporation.
2.10 Agreement of Rights Holders. Every holder of a Right by accepting
the same consents and agrees with the Corporation and the Rights Agent and with
every other holder of a Right that:
(a) prior to the Separation Time, each Right will be transferable
only together with, and will be transferred by a transfer of, the associated
share of Common Stock;
(b) after the Separation Time, the Rights Certificates will be
transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to
the Separation Time, the associated Common Stock certificate) for registration
of transfer, the Corporation, the Rights Agent and any agent of the Corporation
or the Rights Agent may deem and treat the person in whose name the Rights
Certificate (or, prior to the Separation Time, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Corporation nor
the Rights Agent shall be affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will, under the
circumstances set forth in Section 3.1(b), become void;
(e) this Agreement may be supplemented or amended from time to time
pursuant to Section 2.3(b) or 5.4; and
(f) notwithstanding anything in this Agreement to the contrary,
neither the Corporation nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of the Rights Agent's 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, prohibiting or otherwise restraining
performance of such obligation; provided, however, the Corporation must use its
best efforts to have any such order, decree or ruling lifted or otherwise
overturned as soon as possible.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS
--------------------------------------------------------------
3.1 Flip-In.
--------
(a) In the event that, prior to the Expiration Time, a Flip-In Date
shall occur, except as provided in this Section 3.1, each Right shall constitute
the right to purchase from the Corporation, for an amount in cash equal to the
Exercise Price, upon exercise thereof in accordance with the terms hereof (but
subject to Section 5.10), that number of shares of Common Stock having an
aggregate Market Price on the Stock Acquisition Date equal to twice the Exercise
Price (such right to be appropriately adjusted in order to protect the interests
of the holders of Rights generally in the event that on or after such Stock
Acquisition Date an event of a type analogous to any of the events described in
Section 2.3(a) or (b) shall have occurred with respect to the Common Stock).
10
(b) Notwithstanding the foregoing, any Rights that are or were
Beneficially Owned on or after the Stock Acquisition Date by an Acquiring Person
or an Affiliate or Associate thereof or by any transferee, direct or indirect,
of any of the foregoing shall become void and any holder of such Rights
(including transferees) shall thereafter have no right to exercise or transfer
such Rights under any provision of this Agreement. If any Rights Certificate is
presented for assignment or exercise and the Person presenting the same will not
complete the certification set forth at the end of the form of assignment or
notice of election to exercise and provide such additional evidence of the
identity of the Beneficial Owner and its Affiliates and Associates (or former
Beneficial Owners and their Affiliates and Associates) as the Corporation shall
reasonably request, then the Corporation shall be entitled conclusively to deem
the Beneficial Owner thereof to be an Acquiring Person or an Affiliate or
Associate thereof or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced thereby to be void and not transferable or
exercisable.
(c) The Board of Directors of the Corporation may, at its option, at
any time after a Flip-In Date and prior to the time that an Acquiring Person
becomes the Beneficial Owner of more than 50% of the outstanding shares of
Common Stock, elect to exchange all (but not less than all) the then-outstanding
Rights (other than Rights that have become void pursuant to the provisions of
Section 3.1(b)) for shares of Common Stock at an exchange ratio of one share of
Common Stock per Right (appropriately adjusted in order to protect the interests
of holders of Rights generally in the event that after the Separation Time an
event of a type analogous to any of the events described in Section 2.3(a) or
(b) shall have occurred with respect to the Common Stock) (such exchange ratio,
as adjusted from time to time, being hereinafter referred to as the "Exchange
Ratio").
Immediately upon the action of the Board of Directors of the Corporation
electing to exchange the Rights, without any further action and without any
notice, the right to exercise the Rights will terminate and each Right (other
than Rights that have become void pursuant to Section 3.1(b)) will thereafter
represent only the right to receive a number of shares of Common Stock equal to
the Exchange Ratio. Promptly after the action of the Board of Directors electing
to exchange the Rights, the Corporation shall give notice thereof (specifying
the steps to be taken to receive shares of Common Stock in exchange for Rights)
to the Rights Agent and the holders of the Rights (other than Rights that have
become void pursuant to Section 3.1(b)) outstanding immediately prior thereto by
mailing such notice in accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued upon the
exchange of Rights pursuant to this Section 3.1(c) or Section 3.1(e) shall for
all purposes be deemed to have become the holder of record of the shares
represented thereby on, and such certificate shall be dated, the date upon which
the Rights Certificate evidencing such Rights was duly surrendered and payment
of any applicable taxes and other governmental charges payable by the holder was
made; provided, however, that if the date of such surrender and payment is a
date upon which the stock transfer books of the Corporation are closed, such
Person shall be deemed to have become the record holder of such shares on, and
such Certificate shall be dated, the next succeeding Business Day on which the
stock transfer books of the Corporation are open.
11
(d) Whenever the Corporation shall become obligated under Section
3.1(a) or (c) to issue shares of Common Stock upon exercise of or in exchange
for Rights, the Corporation, at its option, may substitute therefor shares of
Preferred Stock, at a ratio of one ten-thousandth (1/10,000th) of a share of
Preferred Stock for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient treasury shares
or authorized but unissued shares of Common Stock or Preferred Stock of the
Corporation to permit the exercise or exchange in full of the Rights in
accordance with Section 3.1(a) or (c), the Corporation shall either (i) call a
meeting of shareholders seeking approval to cause sufficient additional shares
to be authorized (provided that if such approval is not obtained the Corporation
will take the action specified in clause (ii) of this sentence) or (ii) take
such action as shall be necessary to ensure and provide, to the extent permitted
by applicable law and any agreements or instruments in effect on the Stock
Acquisition Date to which it is a party, that each Right shall thereafter
constitute the right to receive, (x) at the Corporation's option, either (A) in
return for the Exercise Price, cash, debt or equity securities or other assets
(or a combination thereof) having a fair value equal to twice the Exercise
Price, or (B) without payment of consideration (except as otherwise required by
applicable law), cash, debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the Exercise Price, or (y) if
the Board of Directors of the Corporation elects to exchange the Rights in
accordance with Section 3.1(c), debt or equity securities or other assets (or a
combination thereof) having a fair value equal to the product of the Market
Price of a share of Common Stock on the Flip-In Date times the Exchange Ratio in
effect on the Flip-In Date, where in any case set forth in (x) or (y) above the
fair value of such debt or equity securities or other assets shall be as
determined in good faith by the Board of Directors of the Corporation, after
consultation with a nationally recognized investment banking firm.
3.2 Flip-Over.
----------
(a) Prior to the Expiration Time, the Corporation shall not enter
into any agreement with respect to, consummate or permit to occur any Flip-Over
Transaction or Event unless and until it shall have entered into a supplemental
agreement with the Flip-Over Entity, for the benefit of the holders of the
Rights (other than holders of Rights that have become void pursuant to Section
3.1(b)), providing that, upon consummation or occurrence of the Flip-Over
Transaction or Event (i) each Right (other than holders of Rights that have
become void pursuant to Section 3.1(b)) shall thereafter constitute the right to
purchase from the Flip-Over Entity, upon exercise thereof in accordance with the
terms hereof, that number of shares of Flip-Over Stock of the Flip-Over Entity
having an aggregate Market Price on the date of consummation or occurrence of
such Flip-Over Transaction or Event equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally
(other than holders of Rights that have become void pursuant to Section 3.1(b))
in the event that after such date of consummation or occurrence an event of a
type analogous to any of the events described in Section 2.3(a) or (b) shall
have occurred with respect to the Flip-Over Stock) and (ii) the Flip-Over Entity
shall thereafter be liable for, and shall assume, by virtue of such Flip-Over
Transaction or Event and such supplemental agreement, all the obligations and
duties of the Corporation pursuant to this Agreement. The provisions of this
Section 3.2 shall apply to successive Flip-Over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be redeemed
pursuant to Section 5.1 in connection therewith, the Corporation shall not enter
into any agreement with respect to, consummate or permit to occur any Flip-Over
Transaction or Event if at the time thereof there are any rights, warrants or
securities of the Flip-Over Entity outstanding or any other arrangements,
agreements or instruments that the Flip-Over Entity is a party to that would
eliminate or otherwise diminish in any material respect the benefits intended to
be afforded by this Rights Agreement to the holders of Rights upon consummation
of such transaction.
12
ARTICLE IV
THE RIGHTS AGENT
----------------
4.1 General.
--------
(a) The Corporation hereby appoints the Rights Agent to act as agent
for the Corporation in accordance with the terms and conditions hereof, and the
Rights Agent hereby accepts such appointment. The Corporation 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 Corporation also agrees to indemnify the Rights Agent, its
directors, officers, employees and agents for, and to hold each of them harmless
against, any loss, liability, or expense, incurred without gross negligence, bad
faith or willful misconduct on the part of the Rights Agent or such other
indemnified party, for anything done or suffered or omitted to be done by the
Rights Agent in connection with the acceptance and administration of this
Agreement or the exercise or performance of its duties hereunder, including the
costs and expenses of defending against any claim of liability. The indemnity
provided in this Section 4.1(a) shall survive the expiration of the Rights and
the termination of this Agreement.
(b) The Rights Agent shall be fully 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 or the exercise or
performance of its duties hereunder in reliance upon any certificate for
securities purchasable upon exercise of Rights, Rights Certificate, certificate
for other securities of the Corporation, 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.
4.2 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 is a party, or any corporation succeeding to the
stockholder services business of the Rights Agent or any successor Rights Agent,
will 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 Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 4.4. In case at the time
such successor Rights Agent succeeds to the agency created by this Agreement any
of the Rights Certificates have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates have not been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates will have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and
at such time any of the Rights Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in
its changed name; and in all such cases such Rights Certificates shall have the
full force provided in the Rights Certificates and in this Agreement.
13
4.3 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 Corporation and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Corporation), and the advice or opinion of such counsel
will be full and complete authorization and protection to the Rights Agent as to
any action taken, suffered or omitted by it in good faith and in accordance with
such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent deems it necessary or desirable that any fact or matter be
proved or established by the Corporation prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by a person believed by the Rights Agent to
be the Chairman of the Board, the Chief Executive Officer, the President or any
Vice President and by the Chief Financial Officer, the Treasurer or any
Assistant Treasurer or the Secretary or any Assistant Secretary of the
Corporation and delivered to the Rights Agent; and such certificate will be full
authorization to the Rights Agent for any action taken, suffered or omitted in
good faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The Rights Agent will be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the Rights
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and will be deemed to have been
made by the Corporation only.
(e) The Rights Agent will not be under any responsibility in respect
of the validity of any provision 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 certificate for
securities purchasable upon exercise of Rights or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the
Corporation of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor will it be responsible for any change in the
exercisability of the Rights (including the Rights becoming void pursuant to
Section 3.1(b)) or any adjustment required under any provision of this Agreement
or responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights after receipt of the certificate
contemplated by Section 2.3 describing any such adjustment); nor will it by any
act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any securities purchasable upon exercise of
Rights or any Rights or as to whether any securities purchasable upon exercise
of Rights will, when issued, be duly and validly authorized, executed, issued
and delivered and fully paid and nonassessable.
(f) The Corporation 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.
14
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person believed by the Rights Agent to be the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Secretary, any
Assistant Secretary, the Chief Financial Officer, or the Treasurer or any
Assistant Treasurer of the Corporation, and to apply to such persons for advice
or instructions in connection with its duties, and it shall not be liable for
any action taken, suffered or omitted by it in good faith in accordance with
instructions of any such person, or for any delay in acting while awaiting
instructions. Any application by the Rights Agent for written instructions from
the Corporation may, at the option of the Rights Agent, set forth in writing any
action proposed to be taken, suffered or omitted by the Rights Agent under this
Agreement and the date on or after which such action shall be taken or such
omission shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any officer of the Corporation actually receives such application, unless any
such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in Common Stock, Rights or
other securities of the Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested, or contract with or lend
money to the Corporation or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Corporation or for any other
Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent will not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Corporation resulting from any such act, default,
neglect or misconduct, provided the Rights Agent was not grossly negligent in
the selection and continued employment thereof.
(j) The Rights Agent undertakes only the express duties and
obligations imposed on it by this Agreement and no implied duties or obligations
shall be read into this Agreement against the Rights Agent.
(k) Anything in this Agreement to the contrary notwithstanding, in
no event shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits).
(l) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
15
4.4 Change of Rights Agent. The Rights Agent may resign and be discharged
from its duties under this Agreement upon 90 days notice (or such lesser notice
as is acceptable to the Corporation) in writing mailed to the Corporation and to
each transfer agent of Common Stock by registered or certified mail, and to the
holders of the Rights in accordance with Section 5.9. The Corporation may remove
the Rights Agent upon 30 days notice in writing, mailed to the Rights Agent and
to each transfer agent of the Common Stock by registered or certified mail, and
to the holders of the Rights in accordance with Section 5.9. If the Rights Agent
should resign or be removed or otherwise become incapable of acting, the
Corporation will appoint a successor to the Rights Agent. If the Corporation
fails 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 any Rights (which
holder shall, with such notice, submit such holder's Rights Certificate for
inspection by the Corporation), then the holder of any Rights may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Corporation or by such a court,
shall be (a) a corporation organized and doing business under the laws of the
United States or any state of the United States, in good standing, which is
authorized under such laws to exercise the powers of the Rights Agent
contemplated by this Agreement and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $100,000,000 or (b) an
Affiliate of a corporation described in the immediately preceding clause (a).
After appointment, the successor Rights Agent will be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Corporation will file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Common
Stock, and mail a notice thereof in writing to the holders of the Rights.
Failure to give any notice provided for in this Section 4.4, 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.
ARTICLE V
MISCELLANEOUS
-------------
5.1 Redemption.
(a) The Board of Directors of the Corporation may, at its option, at
any time prior to the close of business on the Flip-In Date elect to redeem all
(but not less than all) of the then outstanding Rights at the Redemption Price
and the Corporation, at its option, may pay the Redemption Price either in cash
or shares of Common Stock or other securities of the Corporation deemed by the
Board of Directors, in the exercise of its sole discretion, to be at least
equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of the
Corporation electing to redeem the Rights (or, if the resolution of the Board of
Directors electing to redeem the Rights states that the redemption will not be
effective until the occurrence of a specified future time or event, upon the
occurrence of such future time or event), without any further action and without
any notice, the right to exercise the Rights will terminate and each Right will
thereafter represent only the right to receive the Redemption Price in cash or
securities, as determined by the Board of Directors. Promptly after the Rights
are redeemed, the Corporation shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice in
accordance with Section 5.9.
5.2 Expiration. The Rights and this Agreement shall expire at the
Expiration Time and no Person shall have any rights pursuant to this Agreement
or any Right after the Expiration Time, except, if the Rights are exchanged or
redeemed, as provided in Section 3.1 or 5.1.
16
5.3 Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Corporation
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the number or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock by the
Corporation following the Separation Time and prior to the Redemption Time or
Expiration Time pursuant to the terms of securities convertible or exchangeable
into shares of Common Stock or to options, in each case issued or granted prior
to, and outstanding at, the Separation Time, the Corporation shall issue to the
holders of such shares of Common Stock, Rights Certificates representing the
appropriate number of Rights in connection with the issuance or sale of such
shares of Common Stock; provided, however, in each case, (i) no such Rights
Certificate shall be issued, if, and to the extent that, the Corporation shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Corporation or to the Person to whom
such Rights Certificates would be issued, (ii) no such Rights Certificates shall
be issued if, and to the extent that, appropriate adjustment shall have
otherwise been made in lieu of the issuance thereof, and (iii) the Corporation
shall have no obligation to distribute Rights Certificates to any Acquiring
Person or Affiliate or Associate of an Acquiring Person or any transferee of any
of the foregoing.
5.4 Supplements and Amendments. The Corporation and the Rights Agent may
from time to time supplement or amend this Agreement without the approval of any
holders of Rights (i) prior to the Close of Business on the Flip-In Date, in any
respect and (ii) after the Close of Business on the Flip-In Date, to make any
changes that the Corporation may deem necessary or desirable and that shall not
materially adversely affect the interests of the holders of Rights generally
(other than an Acquiring Person or an Affiliate or an Associate of an Acquiring
Person) or in order to cure any ambiguity or to correct or supplement any
provision contained herein that may be inconsistent with any other provisions
herein or otherwise defective. The Rights Agent will duly execute and deliver
any supplement or amendment hereto requested by the Corporation upon receipt of
a certificate from the Corporation that such supplement or amendment satisfies
the terms of the preceding sentence. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment that changes the rights
and duties of the Rights Agent under this Agreement shall be effective without
the consent of the Rights Agent.
5.5 Fractional Shares. If the Corporation elects not to issue
certificates representing fractional shares upon exercise or redemption of
Rights, the Corporation shall, in lieu thereof, in the sole discretion of the
Board of Directors, either (a) evidence such fractional shares by depositary
receipts issued pursuant to an appropriate agreement between the Corporation and
a depositary selected by it, providing that each holder of a depositary receipt
shall have all of the rights, privileges and preferences to which such holder
would be entitled as a beneficial owner of such fractional share, or (b) sell
such shares on behalf of the holders of Rights and pay to the registered holder
of such Rights the appropriate fraction of price per share received upon such
sale.
5.6 Rights of Action. Subject to the terms of this Agreement (including
Section 3.1(b)), rights of action in respect of this Agreement, other than
rights of action vested solely in the Rights Agent, are vested in the respective
holders of the Rights; and any holder of any Rights, without the consent of the
Rights Agent or of the holder of any other Rights, may, on such holder's own
behalf and for such holder's own benefit and the benefit of other holders of
Rights, enforce, and may institute and maintain any suit, action or proceeding
against the Corporation to enforce, or otherwise act in respect of, such
holder's right to exercise such holder's Rights in the manner provided in such
holder's Rights Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations under, and injunctive relief against actual or threatened
violations of, the obligations of any Person subject to this Agreement.
17
5.7 Holder of Rights Not Deemed a Stockholder. No holder, as such, of
any Rights shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of shares or any other securities which may at any time be
issuable on the exercise of such Rights, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of any Rights,
as such, any of the rights of a shareholder of the Corporation or any right to
vote for the election of directors or upon any matter submitted to shareholders
at any meeting thereof, or to give or withhold consent to any corporate action,
or to receive notice of meetings or other actions affecting shareholders (except
as provided in Section 5.8), or to receive dividends or subscription rights, or
otherwise, until such Rights shall have been exercised or exchanged in
accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Corporation shall propose
after the Separation Time and prior to the Expiration Time (i) to effect or
permit occurrence of any Flip-Over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Corporation, then, in each such
case, the Corporation shall give to each holder of a Right, in accordance with
Section 5.9, a notice of such proposed action, which shall specify the date on
which such Flip-Over Transaction or Event, liquidation, dissolution, or winding
up is to take place, and such notice shall be so given at least 20 Business Days
prior to the date of the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by this Agreement
to be given or made by the Rights Agent or by the holder of any Rights to or on
the Corporation shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
ParkerVision, Inc.
0000 Xxxxxxxxxx Xxx
Xxxxxxxxxxxx, XX 00000
Attention: Corporate Secretary
Any notice or demand authorized or required by this Agreement to be given
or made by the Corporation or by the holder of any Rights to or on the Rights
Agent shall be sufficiently given or made if delivered or sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Corporation) as follows:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxx Xxxxxxxxx
Notices or demands authorized or required by this Agreement to be given or
made by the Corporation or the Rights Agent to or on the holder of any Rights
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as it
appears upon the registry books of the Rights Agent or, prior to the Separation
Time, on the registry books of the transfer agent for the Common Stock. Any
notice that is mailed in the manner herein provided shall be deemed given on the
third Business Day after mailing, whether or not the holder receives the notice.
Failure to give a notice pursuant to the provisions of this Agreement shall not
affect the validity of any action taken hereunder.
5.10 Suspension of Exercisability. To the extent that the Corporation
determines in good faith that some action will or need be taken pursuant to
Section 2.2(g) or Section 3.1 or otherwise to comply with federal or state
securities laws, the Corporation may suspend the exercisability of the Rights
for 90 days and any additional period that may be reasonable in order to take
such action or comply with such laws. In the event of any such suspension, the
Corporation shall issue as promptly as practicable a public announcement stating
that the exercisability or exchangeability of the Rights has been temporarily
suspended. Notice thereof pursuant to Section 5.9 shall not be required.
18
5.11 Costs of Enforcement. The Corporation agrees that if the Corporation
or any other Person the securities of which are purchasable upon exercise of
Rights fails to fulfill any of its obligations pursuant to this Agreement, then
the Corporation or such Person will reimburse the holder of any Rights for the
costs and expenses (including legal fees) incurred by such holder in actions to
enforce such holder's rights pursuant to any Rights or this Agreement.
5.12 Successors. All the covenants and provisions of this Agreement by or
for the benefit of the Corporation or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
5.13 Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Corporation, the Rights Agent and
the holders of the Rights any legal or equitable right, remedy or claim under
this Agreement and this Agreement shall be for the sole and exclusive benefit of
the Corporation, the Rights Agent and the holders of the Rights.
5.14 Determination and Actions by the Board of Directors, etc. The Board
of Directors of the Corporation shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board or to the Corporation, 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. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith, shall (x) be
final, conclusive and binding on the Corporation, the Rights Agent, the holders
of the Rights and all other parties, and (y) not subject the Board of Directors
of the Corporation to any liability to the holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT ISSUED HEREUNDER SHALL
BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF FLORIDA AND FOR
ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED ENTIRELY WITHIN SUCH
STATE.
5.17 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.
5.18 Severability. If any term or provision of this Agreement or the
application thereof to any circumstance shall, in any jurisdiction and to any
extent, be invalid or unenforceable, such term or provision shall be ineffective
as to such jurisdiction to the extent of such invalidity or unenforceability
without invalidating or rendering unenforceable the remaining terms and
provisions hereof or the application of such term or provision to circumstances
other than those as to which it is held invalid or unenforceable.
19
[SIGNATURES APPEAR ON FOLLOWING PAGE]
20
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
PARKERVISION, INC.
By: /S/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Chief Executive Officer
AMERICAN STOCK TRANSFER & TRUST COMPANY,
AS RIGHTS AGENT
By: /S/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
21
EXHIBIT A
(Form of Rights Certificate)
Certificate No. R- _____________ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE OPTION OF THE
CORPORATION, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS BENEFICIALLY
OWNED BY ACQUIRING PERSONS OR AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE FOREGOING WILL
BE VOID.
Rights Certificate
PARKERVISION, INC.
This certifies that _____________________________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Stockholder Protection Rights Agreement, dated as of November
21, 2005 (as amended from time to time, the "Rights Agreement"), between
ParkerVision, Inc., a Florida corporation (the "Corporation"), and American
Stock Transfer & Trust Company, as rights agent (the "Rights Agent," which term
shall include any successor rights agent under the Rights Agreement), to
purchase from the Corporation at any time after the Separation Time (as such
term is defined in the Rights Agreement) and prior to the Close of Business on
November 21, 2015, one ten-thousandth (1/10,000) of a fully paid share of Series
E Preferred Stock, par value $1.01 per share (the "Preferred Stock"), of the
Corporation (subject to adjustment as provided in the Rights Agreement) at the
Exercise Price referred to below, upon presentation and surrender of this Rights
Certificate with the Form of Election to Exercise duly executed at the principal
office of the Rights Agent. The Exercise Price shall initially be $45.00 per
Right and shall be subject to adjustment in certain events as provided in the
Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights evidenced
hereby may entitle the registered holder thereof to purchase securities of an
entity other than the Corporation or securities (including Common Stock) or
assets of the Corporation other than Preferred Stock, all as provided in the
Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Corporation and the holders of the Rights Certificates. Copies
of the Rights Agreement are on file at the principal office of the Corporation
and are available without cost upon written request. Capitalized terms used in
this Rights Certificate and not otherwise defined herein shall have the meanings
ascribed to such terms in the Rights Agreement.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
evidencing an aggregate number of Rights equal to the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates surrendered. If this
Rights Certificate shall be exercised in part, the registered holder shall be
entitled to receive, upon surrender hereof, another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
22
Subject to the provisions of the Rights Agreement, each Right evidenced by this
Certificate may be (a) redeemed by the Corporation under certain circumstances,
at its option, at a redemption price of $.01 per Right or (b) exchanged by the
Corporation under certain circumstances, at its option, for one share of Common
Stock (or one ten-thousandth (1/10,000) of a share of Preferred Stock) per Right
(or, in certain cases, other securities or assets of the Corporation), subject
in each case to adjustment in certain events as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be entitled to receive
dividends or be deemed for any purpose the holder of any securities which may at
any time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a shareholder of the Corporation or any right to vote
for the election of directors or upon any matter submitted to shareholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Rights evidenced by this Rights Certificate
shall have been exercised or exchanged as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Corporation.
Date:___________________________
ATTEST: PARKERVISION, INC.
_______________________________ By:_____________________________
Secretary Chief Executive Officer
Countersigned:
-------------------
By:____________________________
Authorized Officer
23
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED,_______________________________ hereby sells, assigns and
transfers unto
--------------------------------------------------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ______________________,
attorney-in-fact, to transfer the within Rights Certificate on the books of the
within-named Corporation, with full power of substitution.
Dated:________________________, _____
Signature Guaranteed: ____________________________________
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of the Corporation and all
holders of Rights and shares of Common Stock, that the Rights evidenced by this
Rights Certificate are not, and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
------------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in connection
with a purported assignment, the Corporation will deem the Beneficial Owner of
the Rights evidenced by the enclosed Rights Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
or a transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
24
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
To be executed if holder desires to exercise the Rights Certificate.)
TO: PARKERVISION, INC.
The undersigned hereby irrevocably elects to exercise ________________ whole
Rights represented by the attached Rights Certificate to purchase the shares of
Series E Preferred Stock (or such other securities as shall be designated by
ParkerVision) issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name of and delivered to:
Name:____________________________________________________________
Address:_________________________________________________________
_________________________________________________________
Social Security or other Taxpayer ID No.: _______________________
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
Name:____________________________________________________________
Address:_________________________________________________________
_________________________________________________________
Social Security or other Taxpayer ID No.: _______________________
Dated:____________________, ________
Signature Guaranteed: _________________________________________
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
--------------------------------------------------------------------------------
(To be completed if true)
25
The undersigned hereby represents, for the benefit of the Corporation and all
holders of Rights and shares of Common Stock, that the Rights evidenced by this
Rights Certificate are not, and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
-----------------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in connection
with a purported election to exercise, , the Corporation will deem the
Beneficial Owner of the Rights evidenced by the enclosed Rights Certificate to
be an Acquiring Person or an Affiliate or Associate thereof (as defined in the
Rights Agreement) or a transferee of any of the foregoing and accordingly will
deem the Rights evidenced by such Rights Certificate to be void and not
transferable or exercisable.
26
EXHIBIT B
CERTIFICATE OF DESIGNATIONS OF THE
PREFERENCES, LIMITATIONS AND RELATIVE RIGHTS
OF SERIES E PREFERRED STOCK
OF PARKERVISION, INC.
Pursuant to Section 607.0602 of the Florida Business Corporation Law,
ParkerVision, Inc., a Florida corporation (the "Corporation").
DOES HEREBY CERTIFY that pursuant to the authority conferred upon the
Board of Directors by the Articles of Incorporation of the Corporation and
pursuant to Section 607.0602 of the Florida Business Corporation Law, said Board
of Directors at a meeting duly held on October 18, 2005 has duly adopted a
resolution providing for the issuance of a series of 100,000 shares of Series E
Preferred Stock, par value $.01 per share, which reads as follows:
There is hereby designated, out of the authorized but unissued shares of
Preferred Stock of the Corporation, a series thereof, and the number of shares,
voting powers, designation, preferences, and relative, participating, optional,
and other special rights, and the qualifications, limitations, and restrictions
thereof, of the shares of such series (in addition to those set forth in the
Articles of Incorporation, as amended, which are applicable to the Preferred
Stock of all series), shall be as follows:
(1) The distinctive serial designation of this series shall be
"Series E Preferred Stock" (hereinafter called "this Series"). Each share of
this Series shall be identical in all respects with the other shares of this
Series except as to the dates from and after which dividends thereon shall be
cumulative.
(2) The number of shares in this Series shall initially be 100,000,
which number may from time to time be increased or decreased (but not below the
number then outstanding) by the Board of Directors. Shares of this Series
purchased by the Corporation shall be canceled and shall revert to authorized
but unissued shares of Preferred Stock undesignated as to series. Shares of this
Series may be issued in fractional shares, which fractional shares shall entitle
the holder, in proportion to such holder's fractional share, to all rights of a
holder of a whole share of this Series.
(3) The holders of full or fractional shares of this Series shall be
entitled to receive, when and as declared by the Board of Directors, but only
out of funds legally available therefor, dividends, (A) on each date that
dividends or other distributions (other than dividends or distributions payable
in Common Stock of the Corporation) are payable on or in respect of Common Stock
comprising part of the Reference Package (as defined below), in an amount per
whole share of this Series equal to the aggregate amount of dividends or other
distributions (other than dividends or distributions payable in Common Stock of
the Corporation) that would be payable on such date to a holder of the Reference
Package and (B) on the last day of March, June, September and December in each
year, in an amount per whole share of this Series equal to the excess (if any)
of $100 over the aggregate dividends paid per whole share of this Series during
the three-month period ending on such last day. Each such dividend shall be paid
to the holders of record of shares of this Series on the date, not exceeding 60
days preceding such dividend or distribution payment date, fixed for that
purpose by the Board of Directors in advance of payment of each particular
dividend or distribution. Dividends on each full and each fractional share of
this Series shall be cumulative from the date such full or fractional share is
originally issued; provided that any such full or fractional share originally
issued after a dividend record date and on or prior to the dividend payment date
to which such record date relates shall not be entitled to receive the dividend
payable on such dividend payment date or any amount in respect of the period
from such original issuance to such dividend payment date.
B-1
The term "Reference Package" shall initially mean 10,000 shares of Common
Stock, par value $0.01 per share ("Common Stock"), of the Corporation. In the
event the Corporation shall at any time (A) declare or pay a dividend on any
Common Stock payable in Common Stock, (B) subdivide any Common Stock or (C)
combine any Common Stock into a smaller number of shares, then and in each such
case the Reference Package after such event shall be the Common Stock that a
holder of the Reference Package immediately prior to such event would hold
thereafter as a result thereof.
Holders of shares of this Series shall not be entitled to any dividends,
whether payable in cash, property or stock, in excess of full cumulative
dividends, as herein provided, on this Series.
(4) In the event of any merger, consolidation, reclassification or
other transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property, then in
any such case the shares of this Series shall at the same time be similarly
exchanged or changed in an amount per whole share equal to the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, that a holder of the Reference Package would be entitled to receive
as a result of such transaction and the redemption price will be adjusted.
(5) In the event of any liquidation, dissolution or winding up of
the affairs of the Corporation, whether voluntary or involuntary, the holders of
full and fractional shares of this Series shall be entitled, before any
distribution or payment is made on any date to the holders of the Common Stock
or any other stock of the Corporation ranking junior to this Series upon
liquidation, to be paid in full an amount per whole share of this Series equal
to the greater of (A) $100 or (B) the aggregate amount distributed or to be
distributed in connection with such liquidation, dissolution or winding up to a
holder of the Reference Package (such greater amount being hereinafter referred
to as the "Liquidation Preference"), together with accrued dividends to such
distribution or payment date, whether or not earned or declared. If such payment
shall have been made in full to all holders of shares of this Series, the
holders of shares of this Series as such shall have no right or claim to any of
the remaining assets of the Corporation.
In the event the assets of the Corporation available for distribution to
the holders of shares of this Series upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, shall be
insufficient to pay in full all amounts to which such holders are entitled
pursuant to the first paragraph of this Section (v), no such distribution shall
be made on account of any shares of any other class or series of Preferred Stock
ranking on a parity with the shares of this Series upon such liquidation,
dissolution or winding up unless proportionate distributive amounts shall be
paid on account of the shares of this Series, ratably in proportion to the full
distributable, amounts for which holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the Corporation, the
holders of shares of this Series then outstanding shall be entitled to be paid
out of assets of the Corporation available for distribution to its shareholders
all amounts to which such holders are entitled pursuant to the first paragraph
of this Section (5) before any payment shall be made to the holders of Common
Stock or any other stock of the Corporation ranking junior upon liquidation to
this Series.
For the purposes of this Section (5), the consolidation or merger of, or
binding share exchange by, the Corporation with any other corporation shall not
be deemed to constitute a liquidation, dissolution or winding up of the
corporation.
B-2
(6) This Series shall rank junior to all other series or classes of
Preferred Stock of the Corporation, now existing or hereafter created, as to
payment of dividends and the distribution of assets, unless the terms of any
such other series or class shall provide otherwise.
(7) In addition to any other vote or consent of shareholders
required by law or by the Certificate of Incorporation of the Corporation, each
whole share of this Series shall, on any matter, vote as a class with any other
capital stock comprising part of the Reference Package and voting on such matter
and shall have the number of votes thereon that a holder of the Reference
Package would have.
B-3
