RIGHTS AGREEMENT BY AND BETWEEN CLARUS CORPORATION AND AMERICAN STOCK TRANSFER & TRUST COMPANY, AS RIGHTS AGENT DATED AS OF FEBRUARY 12, 2008
BY
AND BETWEEN
CLARUS
CORPORATION
AND
AMERICAN
STOCK TRANSFER & TRUST COMPANY,
AS
RIGHTS AGENT
DATED
AS OF FEBRUARY 12, 2008
TABLE
OF CONTENTS
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Page
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Certain
Definitions
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2
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2.
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Appointment
of Rights Agent
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6
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3.
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Issuance
of Right Certificates
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6
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4.
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Form
of Right Certificates
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8
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5.
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Countersignature
and Registration
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8
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6.
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Transfer,
Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates
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9
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7.
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Exercise
of Rights; Purchase Price; Expiration Date of Rights
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10
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8.
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Cancellation
and Destruction of Right Certificates
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11
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9.
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Company
Covenants Concerning Securities and Rights
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11
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10.
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Record
Date
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13
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11.
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Adjustment
of Purchase Price, Number and Kind of Securities or Number of
Rights
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13
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12.
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Certificate
of Adjusted Purchase Price or Number of Securities
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21
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13.
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Consolidation,
Merger or Sale or Transfer of Assets or Earning Power
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21
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14.
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Fractional
Rights and Fractional Securities
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24
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15.
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Rights
of Action
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25
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16.
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Agreement
of Rights Holders
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26
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17.
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Right
Certificate Holder Not Deemed a Xxxxxxxxxxx
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00
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00.
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Concerning
the Rights Agent
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26
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19.
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Merger
or Consolidation or Change of Name of Rights Agent
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27
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20.
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Duties
of Rights Agent
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28
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21.
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Change
of Rights Agent
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30
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22.
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Issuance
of New Right Certificates
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31
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23.
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Redemption
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31
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24.
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Exchange
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32
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25.
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Notice
of Certain Events
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33
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26.
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Notices
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34
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27.
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Supplements
and Amendments
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35
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28.
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Successors:
Certain Covenants
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35
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29.
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Benefits
of This Agreement
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35
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30.
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Governing
Law
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35
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i
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31.
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Severability
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35
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32.
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Descriptive
Headings
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35
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Determinations
and Actions by the Board
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36
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34.
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Counterparts
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36
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EXHIBIT
A
Form of Certificate of Designation of Series A Junior Participating Preferred
Stock
EXHIBIT
B
Form of Right Certificate
EXHIBIT
C
Summary of Rights to Purchase Preferred Stock
ii
This
RIGHTS AGREEMENT, dated as of February 12, 2008 (this “Agreement”), is made and
entered into by and between Clarus Corporation, a Delaware corporation (the
“Company”), and American
Stock Transfer & Trust Company,
a New
York corporation, as Rights Agent (the “Rights Agent”).
RECITALS
WHEREAS,
the Company has experienced substantial operating losses in previous years,
and
under the Internal Revenue Code of 1986, as amended (the “Code”), and rules
promulgated by the Internal Revenue Service, the Company may “carry forward” its
net operating losses (the “NOLs”) in certain circumstances to offset current and
future earnings, and thus reduce its federal income tax liability (subject
to
certain requirements and restrictions);
WHEREAS,
if the Company experiences an “Ownership Change,” as defined in Section 382
of the Code, its ability to use its NOLs could be substantially limited or
lost
altogether;
WHEREAS,
the Company believes that its NOLs are a substantial asset of the Company and
that it is in the best interest of the Company and its stockholders that the
Company provide for the protection of the Company’s NOLs on the terms and
conditions set forth herein; and
WHEREAS,
on February 7, 2008, the Board of Directors of the Company authorized and
declared a dividend distribution of one right (a “Right”) for each share of
Common Stock, par value $0.0001 per share, of the Company (a “Common Share”)
outstanding as of the Close of Business (as hereinafter defined) on February
12,
2008 (the “Record Date”), each Right initially representing the right to
purchase one one-hundredth of a Preferred Share (as hereinafter defined), on
the
terms and subject to the conditions herein set forth, and further authorized
and
directed the issuance of one Right (subject to adjustment as provided herein)
with respect to each Common Share issued or delivered by the Company (whether
originally issued or delivered from the Company’s treasury) after the Record
Date but prior to the earlier of the Distribution Date (as hereinafter defined)
and the Expiration Date (as hereinafter defined) or as provided in Section
22.
NOW,
THEREFORE, in consideration of the mutual agreements herein set forth, the
parties hereto hereby agree as follows:
1. Certain
Definitions.For
purposes of this Agreement, the following terms have the meanings indicated:
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(a)
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“Acquiring
Person” means any Person (other than the Company, any Related Person or
any Exempt Person) who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of 4.9%
or more
of the then outstanding Common Shares; provided,
however,
that: (i) if, as of February 12, 2008, any Person is the Beneficial
Owner
of 4.9% or more of the outstanding Common Shares, such Person shall
not be
deemed to be an Acquiring Person unless and until such time as (A)
such
Person or any Affiliate or Associate of such Person thereafter becomes
the
Beneficial Owner of any additional Common Shares, other than as a
result
of a stock dividend, stock split or similar transaction effected
by the
Company in which all holders of Common Shares are treated substantially
equally, or (B) any other Person who is the Beneficial Owner of Common
Shares thereafter becomes an Affiliate or Associate of such Person,
provided
that the foregoing exclusion shall cease to apply with respect to
any
Person at such time as such Person, together with all Affiliates
and
Associates of such Person, ceases to Beneficially Own 4.9% or more
of the
then outstanding Common Shares, and (ii) a Person will not be deemed
to
have become an Acquiring Person solely as a result of an acquisition
of
Common Shares by the Company which reduces the number of Common Shares
outstanding unless and until such time as (A) such Person or any
Affiliate
or Associate of such Person thereafter becomes the Beneficial Owner
of
additional Common Shares, other than as a result of a stock dividend,
stock split or similar transaction effected by the Company in which
all
holders of Common Shares are treated substantially equally, or (B)
any
other Person who is the Beneficial Owner of Common Shares thereafter
becomes an Affiliate or Associate of such Person. Notwithstanding
the
foregoing, if the Board determines that a Person who would otherwise
be an
“Acquiring Person” as defined pursuant to the foregoing provisions of this
Section 1(a) has become such inadvertently (including, without limitation,
because (A) such Person was unaware that it Beneficially Owned a
percentage of Common Shares that would otherwise cause such Person
to be
an Acquiring Person or (B) such Person was aware of the extent of
its
Beneficial Ownership of Common Shares but had no actual knowledge
of the
consequences of such Beneficial Ownership under this Agreement),
and such
Person divests as promptly as practicable (as determined by the Board)
a
sufficient number of Common Shares so that such Person would no longer
be
an “Acquiring Person” as defined pursuant to the foregoing provisions of
this Section 1(a), then such Person shall not be deemed to be an
“Acquiring Person” for any purposes of this Agreement unless and until
such Person shall again become an Acquiring
Person.
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(b)
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“Affiliate”
and “Associate” will have the respective meanings ascribed to such terms
in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act,
as in effect on the date of this Agreement, and to the extent not
included
within the foregoing clause of this Section 1(b), shall also include,
with
respect to any Person, any other Person (other than a Related Person
or an
Exempt Person) whose Common Shares would be deemed constructively
owned by
such first Person pursuant to the provisions of Section 382 of the
Code,
or any successor provision or replacement provision, provided,
however,
that a Person will not be deemed to be the Affiliate or Associate
of
another Person solely because either or both Persons are or were
Directors
of the Company.
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(c)
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A
Person will be deemed the “Beneficial Owner” of, and to “Beneficially
Own,” any securities:
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(i)
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the
beneficial ownership of which such Person or any of such Person’s
Affiliates or Associates, directly or indirectly, has the right to
acquire
(whether such right is exercisable immediately or only after the
passage
of time) pursuant to any agreement, arrangement or understanding
(whether
or not in writing), or upon the exercise of conversion rights, exchange
rights, warrants, options or other rights (in each case, other than
upon
exercise or exchange of the Rights); provided,
however,
that a Person will not be deemed the Beneficial Owner of, or to
Beneficially Own, securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person’s
Affiliates or Associates until such tendered securities are accepted
for
purchase or exchange; or
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2
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(ii)
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which
such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has or shares the right to vote or dispose of, including
pursuant to any agreement, arrangement or understanding (whether
or not in
writing); or
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(iii)
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of
which any other Person is the Beneficial Owner, if such Person or
any of
such Person’s Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) with such other Person
(or any
of such other Person’s Affiliates or Associates) with respect to
acquiring, holding, voting or disposing of any securities of the
Company;
provided,
however,
that a Person will not be deemed the Beneficial Owner of, or to
Beneficially Own, any security (A) if such Person has the right to
vote
such security pursuant to an agreement, arrangement or understanding
(whether or not in writing) which (1) arises solely from a revocable
proxy
given to such Person in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable rules and
regulations of the Exchange Act and (2) is not also then reportable
on
Schedule 13D under the Exchange Act (or any comparable or successor
report), or (B) if such beneficial ownership arises solely as a result
of
such Person’s status as a “clearing agency,” as defined in Section
3(a)(23) of the Exchange Act; provided
further,
however,
that nothing in this Section 1(c) will cause a Person engaged in
business
as an underwriter of securities to be the Beneficial Owner of, or
to
Beneficially Own, any securities acquired through such Person’s
participation in good faith in an underwriting syndicate until the
expiration of 40 calendar days after the date of such acquisition,
or such
later date as the directors of the Company may determine in any specific
case. Notwithstanding anything herein to the contrary, to the extent
not
within the foregoing provisions of this Section 1(c), a Person shall
be
deemed the “Beneficial Owner” of and shall be deemed to “beneficially own”
or have “beneficial ownership” of, securities which such Person (i) would
be deemed to constructively own pursuant to Section 382 of the Code,
or
any successor or replacement provision; or (ii) would be deemed to
have a
direct or indirect economic or pecuniary interest, including, without
limitation, interests or rights acquired through derivative, hedging
or
similar transactions relating to such securities with a counterparty,
as
determined by the Company’s Board of Directors in its sole and absolute
discretion.
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(d)
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“Business
Day” means any day other than a Saturday, Sunday or a day on which banking
institutions in the State of New York (or such other state in which
the
principal office of the Rights Agent may be located) are authorized
or
obligated by law or executive order to
close.
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(e)
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“Close
of Business” on any given date means 5:00 p.m., Eastern time, on such
date; provided,
however,
that if such date is not a Business Day, it means 5:00 p.m., Eastern
time,
on the next succeeding Business
Day.
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3
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(f)
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“Common
Shares” when used with reference to the Company means the shares of Common
Stock, par value $0.0001 per share, of the Company; provided,
however,
that if the Company is the continuing or surviving corporation in
a
transaction described in Section 13(a)(ii), “Common Shares” when used with
reference to the Company means shares of the capital stock or units
of the
equity interests with the greatest aggregate voting power of the
Company.
“Common Shares” when used with reference to any corporation or other legal
entity other than the Company, including an Issuer, means shares
of the
capital stock or units of the equity interests with the greatest
aggregate
voting power of such corporation or other legal
entity.
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(g)
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“Company”
means Clarus Corporation, a Delaware corporation.
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(h)
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“Distribution
Date” means the Close of Business on the tenth calendar day following the
Share Acquisition Date.
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(i)
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“Exchange
Act” means the Securities Exchange Act of 1934, as amended.
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(j)
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“Exempt
Person” means a Person whose Beneficial Ownership (together with all
Affiliates and Associates of such Person) of 4.9% or more of the
then-outstanding Common Shares will not, as determined by the Company’s
Board of Directors in its sole discretion, jeopardize or endanger
the
availability to the Company of its NOLs, provided,
however,
that such a Person will cease to be an “Exempt Person” if the Board of
Directors makes a contrary determination with respect to the effect
of
such Person’s Beneficial Ownership (together with all Affiliates and
Associates of such Person) upon the availability to the Company of
its
NOLs.
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(k)
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“Expiration
Date” means the earliest of (i) the Close of Business on the Final
Expiration Date, (ii) the time at which the Rights are redeemed as
provided in Section 23 and (iii) the time at which all exercisable
Rights
are exchanged as provided in Section
24.
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(l)
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“Final
Expiration Date” means the time at which the Company’s Board of Directors
determines that the NOLs are fully utilized or no longer available
under
Section 382 of the Code.
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(m)
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“Flip-in
Event” means any Person becoming an Acquiring Person.
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(n)
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“Flip-over
Event” means any event described in clauses (i), (ii) or (iii) of Section
13(a).
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(o)
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“Issuer”
has the meaning set forth in Section 13(b)
hereto.
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(p)
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“Nasdaq”
means The NASDAQ Global Market.
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(q)
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“NOLs”
means the Company’s net operating loss carryforwards.
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(r)
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“Person”
means any individual, firm, corporation or other legal entity, and
includes any successor (by merger or otherwise) of such entity.
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4
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(s)
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“Preferred
Shares” means shares of Series A Junior Participating Preferred Stock, par
value $0.0001 per share, of the Company having the rights and preferences
set forth in the form of Certificate of Designation of Series A Junior
Participating Preferred Stock attached hereto as Exhibit
A.
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(t)
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“Purchase
Price” means initially $12 per one one-hundredth of a Preferred Share,
subject to adjustment from time to time as provided in this
Agreement.
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(u)
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“Record
Date” has the meaning set forth in the Recitals to this Agreement.
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(v)
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“Redemption
Price” means $0.0001 per Right, subject to adjustment by resolution of the
Board of Directors of the Company to reflect any stock split, stock
dividend or similar transaction occurring after the Record Date.
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(w)
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“Related
Person” means (i) any Subsidiary of the Company or (ii) any employee
benefit or stock ownership plan of the Company or of any Subsidiary
of the
Company or any entity holding Common Shares for or pursuant to the
terms
of any such plan.
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(x)
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“Right”
has the meaning set forth in the Recitals to this Agreement.
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(y)
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“Right
Certificates” means certificates evidencing the Rights, in substantially
the form attached hereto as Exhibit
B.
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(z)
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“Rights
Agent” means American
Stock Transfer & Trust Company,
a
New York corporation, unless and until a successor Rights Agent has
become
such pursuant to the terms of this Agreement, and thereafter, “Rights
Agent” means such successor Rights
Agent.
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(aa)
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“Securities
Act” means the Securities Act of 1933, as amended.
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(bb)
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“Share
Acquisition Date” means the first date of public announcement by the
Company (by press release, filing made with the Securities and Exchange
Commission or otherwise) that an Acquiring Person has become such.
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(cc)
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“Subsidiary”
when used with reference to any Person means any corporation or other
legal entity of which a majority of the voting power of the voting
equity
securities or equity interests is owned, directly or indirectly,
by such
Person; provided,
however,
that for purposes of Section 13(b), “Subsidiary” when used with reference
to any Person means any corporation or other legal entity of which
at
least 20% of the voting power of the voting equity securities or
equity
interests is owned, directly or indirectly, by such
Person.
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(dd)
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“Trading
Day” means any day on which the principal national securities exchange
on
which the Common Shares are listed or admitted to trading is open
for the
transaction of business or, if the Common Shares are not listed or
admitted to trading on any national securities exchange, a Business
Day.
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(ee)
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“Triggering
Event” means any Flip-in Event or Flip-over Event.
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5
2. Appointment
of Rights Agent.
The
Company hereby appoints the Rights Agent to act as agent for the Company in
accordance with the terms and conditions hereof, and the Rights Agent hereby
accepts such appointment. The Company may from time to time act as a Co-Rights
Agent or appoint such Co-Rights Agents as it may deem necessary or desirable.
Prior to the appointment of a Co-Rights Agent, the specific duties and
obligations of each such Co-Rights Agents shall be set forth in writing and
delivered to the Rights Agent and the proposed Co-Rights Agent. Any actions
which may be taken by the Rights Agent pursuant to the terms of this Agreement
may be taken by any such Co-Rights Agent. To the extent that any Co-Rights
Agent
takes any action pursuant to this Agreement, such Co-Rights Agent will be
entitled to all of the rights and protections of, and subject to all of the
applicable duties and obligations imposed upon, the Rights Agent pursuant to
the
terms of this Agreement. The Rights Agent shall have no duty to supervise,
and
in no event shall be liable for, the acts or omissions of any such Co-Rights
Agent.
3. Issuance
of Right Certificates.
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(a)
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Until
the Distribution Date, (i) the Rights will be evidenced by the
certificates representing Common Shares registered in the names of
the
record holders thereof (which certificates representing Common Shares
will
also be deemed to be Right Certificates), (ii) the Rights will be
transferable only in connection with the transfer of the underlying
Common
Shares and (iii) the surrender for transfer of any certificates evidencing
Common Shares in respect of which Rights have been issued will also
constitute the transfer of the Rights associated with the Common
Shares
evidenced by such certificates. On or as promptly as practicable
after the
Record Date, the Company will send by first class, postage prepaid
mail,
to each record holder of Common Shares as of the Close of Business
on the
Record Date, at the address of such holder shown on the records of
the
Company as of such date, a copy of a Summary of Rights to Purchase
Preferred Stock in substantially the form attached as Exhibit C.
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(b)
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Rights
will be issued by the Company in respect of all Common Shares (other
than
Common Shares issued upon the exercise or exchange of any Right)
issued or
delivered by the Company (whether originally issued or delivered
from the
Company’s treasury) after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date. Certificates evidencing
such
Common Shares will have stamped on, impressed on, printed on, written
on,
or otherwise affixed to them the following legend or such similar
legend
as the Company may deem appropriate and as is not inconsistent with
the
provisions of this Agreement, or as may be required to comply with
any
applicable law or with any rule or regulation made pursuant thereto
or
with any rule or regulation of any stock exchange or transaction
reporting
system on which the Common Shares may from time to time be listed
or
quoted, or to conform to usage:
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This
Certificate also evidences and entitles the holder hereof to certain Rights
as
set forth in a Rights Agreement between Clarus Corporation and American
Stock Transfer & Trust Company,
dated
as of February
12, 2008 (the “Rights Agreement”), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal executive
offices of Clarus Corporation. The Rights are not exercisable prior to the
occurrence of certain events specified in the Rights Agreement. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be
redeemed, may be exchanged, may expire, may be amended or may be evidenced
by
separate certificates and no longer be evidenced by this Certificate. Clarus
Corporation will mail to the holder of this Certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without charge promptly after
receipt of a written request therefor. Under certain circumstances as set forth
in the Rights Agreement, Rights that are or were beneficially owned by an
Acquiring Person or any Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement) may become null and
void.
6
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(c)
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Any
Right Certificate issued pursuant to this Section 3 that represents
Rights
beneficially owned by an Acquiring Person or any Associate or Affiliate
thereof and any Right Certificate issued at any time upon the transfer
of
any Rights to an Acquiring Person or any Associate or Affiliate thereof
or
to any nominee of such Acquiring Person, Associate or Affiliate and
any
Right Certificate issued pursuant to Section 6 or 11 hereof upon
transfer,
exchange, replacement or adjustment of any other Right Certificate
referred to in this sentence, shall be subject to and contain the
following legend or such similar legend as the Company may deem
appropriate and as is not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law
or with
any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange on which the Rights may from time
to time
be listed, or to conform to usage:
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The
Rights represented by this Right Certificate are or were beneficially owned
by a
Person who was an Acquiring Person or an Affiliate or an Associate of an
Acquiring Person (as such terms are defined in the Rights Agreement). This
Right
Certificate and the Rights represented hereby may become null and void in the
circumstances specified in Section 11(a)(ii) or Section 13 of the Rights
Agreement.
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(d)
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As
promptly as practicable after the Distribution Date, the Company
will
prepare and execute, the Rights Agent will countersign and the Company
will send or cause to be sent (and the Rights Agent will, if requested
and
if provided with all necessary information, send), by first class,
insured, postage prepaid mail, to each record holder of Common Shares
as
of the Close of Business on the Distribution Date, at the address
of such
holder shown on the records of the Company, a Right Certificate evidencing
one Right for each Common Share so held, subject to adjustment as
provided
herein. As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates. The Company shall promptly
notify the Rights Agent in writing upon the occurrence of the Distribution
Date and, if such notification is given orally, the Company shall
confirm
same in writing on or prior to the Business Day next following. Until
such
notice is received by the Rights Agent, the Rights Agent may presume
conclusively that the Distribution Date has not
occurred.
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7
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(e)
|
In
the event that the Company purchases or otherwise acquires any Common
Shares after the Record Date but prior to the Distribution Date,
any
Rights associated with such Common Shares will be deemed canceled
and
retired so that the Company will not be entitled to exercise any
Rights
associated with the Common Shares so purchased or
acquired.
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4. Form
of Right Certificates.
The
Right Certificates (and the form of election to purchase and the form of
assignment to be printed on the reverse thereof) will be substantially in the
form attached as Exhibit B with such changes and marks of identification or
designation, and such legends, summaries or endorsements printed thereon, as
the
Company may deem appropriate and as are not inconsistent with the provisions
of
this Agreement, or as may be required to comply with any applicable law or
with
any rule or regulation made pursuant thereto or with any rule or regulation
of
any stock exchange or transaction reporting system on which the Rights may
from
time to time be listed or quoted, or to conform to usage. Subject to the
provisions of Section 22, the Right Certificates, whenever issued, on their
face
will entitle the holders thereof to purchase such number of one one-hundredths
of a Preferred Share as are set forth therein at the Purchase Price set forth
therein, but the Purchase Price, the number and kind of securities issuable
upon
exercise of each Right and the number of Rights outstanding will be subject
to
adjustment as provided herein.
5. Countersignature
and Registration.
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(a)
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The
Right Certificates will be executed on behalf of the Company by its
Chairman of the Board of Directors, its Chief Executive Officer,
Chief
Financial Officer or any Vice President, either manually or by facsimile
signature, and will have affixed thereto the Company’s seal or a facsimile
thereof which will be attested by the Secretary or an Assistant Secretary
of the Company, either manually or by facsimile signature. The Right
Certificates will be manually countersigned by the Rights Agent and
will
not be valid for any purpose unless so countersigned. In case any
officer
of the Company who signed any of the Right Certificates ceases to
be such
officer of the Company before countersignature by the Rights Agent
and
issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent, and issued
and
delivered by the Company with the same force and effect as though
the
person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on
behalf
of the Company by any person who, at the actual date of the execution
of
such Right Certificate, is a proper officer of the Company to sign
such
Right Certificate, although at the date of the execution of this
Rights
Agreement any such person was not such officer.
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|
(b)
|
Following
the Distribution Date, receipt by the Rights Agent of notice to that
effect and all other relevant information referred to in Section
3(d), the
Rights Agent will keep or cause to be kept, at the office of the
Rights
Agent designated for such purpose and at such other offices as may
be
required to comply with any applicable law or with any rule or regulation
made pursuant thereto or with any rule or regulation of any stock
exchange
or any transaction reporting system on which the Rights may from
time to
time be listed or quoted, books for registration and transfer of
the Right
Certificates issued hereunder. Such books will show the names and
addresses of the respective holders of the Right Certificates, the
number
of Rights evidenced on its face by each of the Right Certificates
and the
date of each of the Right
Certificates.
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8
6. Transfer,
Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates.
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(a)
|
Subject
to the provisions of Sections 7(d) and 14, at any time after the
Close of
Business on the Distribution Date and prior to the Expiration Date,
any
Right Certificate or Right Certificates representing exercisable
Rights
may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder
to
purchase a like number of one one-hundredths of a Preferred Share
(or
other securities, as the case may be) as the Right Certificate or
Right
Certificates surrendered then entitled such holder (or former holder
in
the case of a transfer) to purchase. Any registered holder desiring
to
transfer, split up, combine or exchange any such Right Certificate
or
Rights Certificates must make such request in a writing delivered
to the
Rights Agent and must surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at
the
office of the Rights Agent designated for such purpose. The Right
Certificates are transferable only on the registry books of the Rights
Agent. Neither the Rights Agent nor the Company shall be obligated
to take
any action whatsoever with respect to the transfer of any such surrendered
Right Certificate or Right Certificates until the registered holder
thereof shall have (i) completed and signed the certificate contained
in
the form of assignment set forth on the reverse side of each such
Right
Certificate, (ii) provided such additional evidence of the identity
of the
Beneficial Owner (or former Beneficial Owner) thereof and of the
Rights
evidenced thereby and the Affiliates and Associates of such Beneficial
Owner (or former Beneficial Owner) as the Company or the Rights Agent
shall reasonably request and (iii) paid a sum sufficient to cover
any tax
or charge that may be imposed in connection with any transfer, split
up,
combination or exchange of Right Certificates as required by Section
9(c)
hereof. Thereupon the Rights Agent shall countersign and deliver
to the
Person entitled thereto a Right Certificate or Right Certificates,
as the
case may be, as so requested, registered in such name or names as
may be
designated by the surrendering registered holder. The Rights Agent
shall
promptly forward any such sum collected by it to the Company or to
such
Persons as the Company shall specify by written notice. The Rights
Agent
shall have no duty or obligation under this Section unless and until
it is
satisfied that all such taxes and/or governmental charges have been
paid.
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|
(b)
|
Upon
receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation
of a
Right Certificate and, in case of loss, theft or destruction, of
indemnity
or security reasonably satisfactory to them, and, if requested by
the
Company, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights
Agent and cancellation of the Right Certificate if mutilated, the
Company
will prepare, execute and deliver a new Right Certificate of like
tenor to
the Rights Agent and the Rights Agent will countersign and deliver
such
new Right Certificate to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
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9
7. Exercise
of Rights; Purchase Price; Expiration Date of Rights.
|
(a)
|
The
registered holder of any Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein), in whole
or in
part, at any time after the Distribution Date and prior to the Expiration
Date, upon surrender of the Right Certificate, with the form of election
to purchase on the reverse side thereof duly executed, to the Rights
Agent
at the office or offices of the Rights Agent designated for such
purpose,
together with payment in cash, in lawful money of the United States
of
America by certified check or bank draft payable to the order of
the
Company, equal to the sum of (i) the Purchase Price for the total
number
of securities as to which such surrendered Rights are exercised and
(ii)
an amount equal to any applicable tax or charge required to be paid
by the
holder of such Right Certificate in accordance with the provisions
of
Section 9(c).
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|
(b)
|
Upon
receipt of a Right Certificate representing exercisable Rights with
the
form of election to purchase duly and properly executed, accompanied
by
payment of the Purchase Price for the shares to be purchased and
an amount
equal to any applicable tax or charge required to be paid under Section
9(c) hereof by certified check, cashier’s check, bank draft or money order
payable to the order of the Company, the Rights Agent will promptly
(i)
(A) requisition from any transfer agent of the Preferred Shares
certificates representing the number of one one-hundredths of a Preferred
Share to be purchased (and the Company hereby irrevocably authorizes
and
directs its transfer agent to comply with all such requests) or (B),
if
the Company elects to deposit Preferred Shares issuable upon exercise
of
the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of
one
one-hundredths of a Preferred Share as are to be purchased (and the
Company hereby irrevocably authorizes and directs such depositary
agent to
comply with all such requests), (ii) after receipt of such certificates
(or depositary receipts, as the case may be), cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated
by such
holder, (iii) when appropriate, requisition from the Company or any
transfer agent therefor certificates representing the number of equivalent
common shares to be issued in lieu of the issuance of Common Shares
in
accordance with the provisions of Section 11(a)(ii), (iv) when
appropriate, after receipt of such certificates, cause the same to
be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated
by such
holder, (v) when appropriate, requisition from the Company the amount
of
cash to be paid in lieu of the issuance of fractional shares in accordance
with the provisions of Section 14 or in lieu of the issuance of Common
Shares in accordance with the provisions of Section 11(a)(iii), (vi)
when
appropriate, after receipt, deliver such cash to or upon the order
of the
registered holder of such Right Certificate and (vii) when appropriate,
deliver any due xxxx or other instrument provided to the Rights Agent
by
the Company for delivery to the registered holder of such Right
Certificate as provided by Section 11(1).
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|
(c)
|
In
case the registered holder of any Right Certificate exercises less
than
all the Rights evidenced thereby, the Rights Agent will prepare,
execute
and deliver a new Right Certificate evidencing Rights equivalent
to the
Rights remaining unexercised to the registered holder of such Right
Certificate or to his duly authorized assigns, subject to the provisions
of Section 14 hereof.
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10
|
(d)
|
Notwithstanding
anything in this Agreement to the contrary, neither the Rights Agent
nor
the Company will be obligated to undertake any action with respect
to any
purported transfer, split up, combination or exchange of any Right
Certificate pursuant to Section 6 or exercise of a Right Certificate
as
set forth in this Section 7 unless the registered holder of such
Right
Certificate has (i) duly and properly completed and signed the certificate
following the form of assignment or the form of election to purchase,
as
applicable, set forth on the reverse side of the Right Certificate
surrendered for such transfer, split up, combination, exchange or
exercise
and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) thereof and of the
Rights
evidenced thereby and Affiliates and Associates thereof as the Company
or
the Rights Agent may reasonably request.
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8. Cancellation
and Destruction of Right
Certificates.
All
Right Certificates surrendered for the purpose of exercise, transfer, split
up,
combination or exchange will, if surrendered to the Company or to any of its
transfer agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, will be canceled by
it,
and no Right Certificates will be issued in lieu thereof except as expressly
permitted by the provisions of this Agreement. The Company will deliver to
the
Rights Agent for cancellation and retirement, and the Rights Agent will so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent will deliver
all canceled Right Certificates to the Company, or will, at the written request
of the Company, destroy such canceled Right Certificates, and in such case,
will
deliver a certificate of destruction thereof to the Company.
9. Company
Covenants Concerning Securities and
Rights.
The
Company covenants and agrees that:
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(a)
|
It
will cause to be reserved and kept available out of its authorized
and
unissued Preferred Shares or any Preferred Shares held in its treasury,
a
number of Preferred Shares that will be sufficient to permit the
exercise
in full of all outstanding Rights in accordance with Section
7.
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|
(b)
|
It
will take all such action as may be necessary to ensure that all
Preferred
Shares (and, following the occurrence of a Triggering Event, Common
Shares
and/or other securities) delivered upon exercise of Rights, at the
time of
delivery of the certificates for such securities, will be (subject
to
payment of the Purchase Price) duly authorized, validly issued, fully
paid
and nonassessable securities.
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|
(c)
|
It
will pay, when due and payable, any and all federal and state taxes
and
charges that may be payable in respect of the issuance or delivery
of the
Right Certificates and of any certificates representing securities
issued
upon the exercise of Rights; provided,
however,
that the Company will not be required to pay any tax or charge which
may
be payable in respect of any transfer or delivery of Right Certificates
to
a person other than, or the issuance or delivery of certificates
or
depositary receipts representing securities issued upon the exercise
of
Rights in a name other than that of, the registered holder of the
Right
Certificate evidencing Rights surrendered for exercise, or to issue
or
deliver any certificates or depositary receipts representing securities
issued upon the exercise of any Rights until any such tax or charge
has
been paid (any such tax or charge being payable by the holder of
such
Right Certificate at the time of surrender) or until it has been
established to the Company’s reasonable satisfaction that no such tax is
due.
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11
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(d)
|
If
the Company determines that registration under the Securities Act
is
required, then the Company shall use its best efforts (i) to file,
as soon
as practicable following the later of the Share Acquisition Date
and the
Distribution Date, on an appropriate form, a registration statement
under
the Securities Act with respect to the securities issuable upon exercise
of the Rights, (ii) to cause such registration statement to become
effective as soon as practicable after such filing and (iii) to cause
such
registration statement to remain effective (with a prospectus at
all times
meeting the requirements of the Securities Act) until the earlier
of (A)
the date as of which the Rights are no longer exercisable for such
securities and (B) the Expiration Date. The Company will also take
such
action as may be appropriate under, or to ensure compliance with,
the
securities or “blue sky” laws of the various states in connection with the
exercisability of the Rights. The Company may suspend the exercisability
of the Rights in order to prepare and file such registration statement
and
to permit it to become effective or to qualify the Rights, the exercise
thereof or the issuance of Common Shares upon the exercise thereof
under
state securities or “blue sky” laws. Upon any such suspension, the Company
will issue a public announcement stating that the exercisability
of the
Rights has been suspended, as well as a public announcement at such
time
as the suspension is no longer in effect. The Company shall notify
the
Rights Agent in writing whenever it makes a public announcement pursuant
to this Section 9(d) and give the Rights Agent a copy of such
announcement. In addition, if the Company determines that a registration
statement or other document should be filed under the Securities
Act or
any state securities or “blue sky” laws following the Distribution Date,
the Company may suspend the exercisability of the Rights in each
relevant
jurisdiction until such time as a registration statement has been
declared
effective or any such other document filed and, if required, approved,
and, upon any such suspension, the Company will issue a public
announcement stating that the exercisability of the Rights has been
suspended, as well as a public announcement at such time as the suspension
is no longer in effect. Notwithstanding anything in this Agreement
to the
contrary, the Rights will not be exercisable in any jurisdiction
if the
requisite registration or qualification in such jurisdiction has
not been
effected or the exercise of the Rights is not permitted under applicable
law.
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|
(e)
|
Notwithstanding
anything in this Agreement to the contrary, after the later of the
Share
Acquisition Date and the Distribution Date, the Company will not
take (or
permit any Subsidiary to take) any action if at the time such action
is
taken it is reasonably foreseeable that such action will eliminate
or
otherwise diminish the benefits intended to be afforded by the Rights.
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|
(f)
|
In
the event that the Company is obligated to issue other securities
of the
Company and/or pay cash pursuant to Section 11, 13, 14 or 24, it
will make
all arrangements necessary so that such other securities and/or cash
are
available for distribution by the Rights Agent, if and when appropriate.
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12
10. Record
Date.
Each
Person in whose name any certificate representing Preferred Shares (or Common
Shares and/or other securities, as the case may be) is issued upon the exercise
of Rights will for all purposes be deemed to have become the holder of record
of
the Preferred Shares (or Common Shares and/or other securities, as the case
may
be) represented thereby on, and such certificate will be dated, the date upon
which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and all applicable transfer taxes) was made;
provided,
however,
that if
the date of such surrender and payment is a date upon which the transfer books
of the Company for the Preferred Shares (or Common Shares and/or other
securities, as the case may be) are closed, such Person will be deemed to have
become the record holder of such securities on, and such certificate will be
dated, the next succeeding Business Day on which the transfer books of the
Company for the Preferred Shares (or Common Shares and/or other securities,
as
the case may be) are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate will not be entitled to any rights
of
a holder of any security for which the Rights are or may become exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions, or to exercise any preemptive rights, and will not be entitled
to
receive any notice of any proceedings of the Company, except as provided herein.
11. Adjustment
of Purchase Price, Number and Kind of
Securities or Number of Rights.
The
Purchase Price, the number and kind of securities issuable upon exercise of
each
Right and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
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(a)
|
(i)
|
In
the event that the Company at any time after the Record Date (A)
declares
a dividend on the Preferred Shares payable in Preferred Shares, (B)
subdivides the outstanding Preferred Shares, (C) combines the outstanding
Preferred Shares into a smaller number of Preferred Shares or (D)
issues
any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this Section
11(a), the Purchase Price in effect at the time of the record date
for
such dividend or of the effective date of such subdivision, combination
or
reclassification and/or the number and/or kind of shares of capital
stock
issuable on such date upon exercise of a Right, will be proportionately
adjusted so that the holder of any Right exercised after such time
is
entitled to receive upon payment of the Purchase Price then in effect
the
aggregate number and kind of shares of capital stock which, if such
Right
had been exercised immediately prior to such date and at a time when
the
transfer books of the Company for the Preferred Shares were open,
the
holder of such Right would have owned upon such exercise (and, in
the case
of a reclassification, would have retained after giving effect to
such
reclassification ) and would have been entitled to receive by virtue
of
such dividend, subdivision, combination or reclassification; provided,
however,
that in no event shall the consideration to be paid upon the exercise
of
one Right be less than the aggregate par value of the shares of capital
stock issuable upon exercise of one Right. If an event occurs which
would
require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) or Section 13, the adjustment provided for in this Section
11(a)(i) will be in addition to, and will be made prior to, any adjustment
required pursuant to Section 11(a)(ii) or Section
13.
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13
|
(ii)
|
Subject
to the provisions of Section 24, if any Person becomes an Acquiring
Person, then, and in each such case, from and after the Distribution
Date,
proper provision will be made so that each holder of a Right, except
as
provided below, will thereafter have the right to receive, upon exercise
thereof in accordance with the terms of this Agreement at an exercise
price per Right equal to the product of the then-current Purchase
Price
multiplied by the number of one one-hundredths of a Preferred Share
for
which a Right was exercisable immediately prior to the date of the
occurrence of such Flip-in Event (or, if any other Flip-in Event
shall
have previously occurred, the product of the then-current Purchase
Price
multiplied by the number of one one-hundredths of a Preferred Share
for
which a Right was exercisable immediately prior to the date of the
first
occurrence of a Flip-in Event), in lieu of Preferred Shares, such
number
of Common Shares as equals the result obtained by (x) multiplying
the
then-current Purchase Price by the number of one one-hundredths of
a
Preferred Share for which a Right was exercisable immediately prior
to the
date of the occurrence of such Flip-in Event (or, if any other Flip-in
Event shall have previously occurred, multiplying the then-current
Purchase Price by the number of one one-hundredths of a Preferred
Share
for which a Right was exercisable immediately prior to the date of
the
first occurrence of a Flip-in Event), and dividing that product by
(y) 50%
of the current per share market price of the Common Shares (determined
pursuant to Section 11(d)) on the date of the occurrence of such
Flip-in
Event. Notwithstanding anything in this Agreement to the contrary,
from
and after the first occurrence of a Flip-in Event, any Rights that
are
Beneficially Owned by (A) any Acquiring Person (or any Affiliate
or
Associate of any Acquiring Person), (B) a transferee of any Acquiring
Person (or any such Affiliate or Associate) who becomes a transferee
after
the occurrence of a Flip-in Event, or (C) a transferee of any Acquiring
Person (or any such Affiliate or Associate) who became a transferee
prior
to or concurrently with the occurrence of a Flip-in Event pursuant
to
either (1) a transfer from an Acquiring Person to holders of its
equity
securities or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights or
(2) a
transfer which the directors of the Company have determined is part
of a
plan, arrangement or understanding which has the purpose or effect
of
avoiding the provisions of this Section 11(a)(ii), and subsequent
transferees of any of such Persons, will be void without any further
action and any holder of such Rights will thereafter have no rights
whatsoever with respect to such Rights under any provision of this
Agreement. The Company will use all reasonable efforts to ensure
that the
provisions of this Section 11(a)(ii) are complied with, but will
have no
liability to any holder of Right Certificates or any other Person
as a
result of its failure to make any determinations with respect to
an
Acquiring Person or its Affiliates, Associates or transferees hereunder.
Upon the occurrence of a Flip-in Event, no Right Certificate that
represents Rights that are or have become void pursuant to the provisions
of this Section 11(a)(ii) will thereafter be issued pursuant to Section
3
or Section 6, and any Right Certificate delivered to the Rights Agent
that
represents Rights that are or have become void pursuant to the provisions
of this Section 11(a)(ii) will be canceled. Upon the occurrence of
a
Flip-over Event, any Rights that shall not have been previously exercised
pursuant to this Section 11(a)(ii) shall thereafter be exercisable
only
pursuant to Section 13 and not pursuant to this Section
11(a)(ii).
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14
|
(iii)
|
Upon
the occurrence of a Flip-in Event, if there are not sufficient Common
Shares authorized but unissued or issued but not outstanding to permit
the
issuance of all the Common Shares issuable in accordance with Section
11(a)(ii) upon the exercise of a Right (the “Adjustment Shares”), the
Board of Directors of the Company shall (A) determine the value of
the
Adjustment Shares issuable upon the exercise of a Right (the “Current
Value”), and (B) with respect to each Right, make adequate provision to
substitute for the Adjustment Shares, upon the exercise of a Right
and
payment of the applicable Purchase Price, (1) cash, (2) a reduction
in the
Purchase Price, (3) Common Shares or other equity securities of the
Company (including, without limitation, shares, or units of shares,
of
preferred stock, such as the Preferred Shares, which the Board has
deemed
to have essentially the same value or economic rights as shares of
Common
Shares (such shares being referred to as “Equivalent Common Shares”)), (4)
debt securities of the Company, (5) other assets, or (6) any combination
of the foregoing, having an aggregate value equal to the Current
Value
(less the amount of any reduction in the Purchase Price), where such
aggregate value has been determined by the Board based upon the advice
of
a nationally recognized investment banking firm selected by the Board;
provided,
however,
that if the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within thirty (30) days following
the
later of (x) the first occurrence of the events specified Section
11(a)(ii) and (y) the date on which the Company’s right of redemption
pursuant to Section 23(a) expires (the later of (x) and (y) being
referred
to herein as the “Section 11(a)(ii) Trigger Date”), then the Company shall
be obligated to deliver, upon the surrender for exercise of a Right
and
without requiring payment of the Purchase Price, shares of Common
Shares
(to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. For purposes
of
the preceding sentence, the term “Spread” shall mean the excess of (i) the
Current Value over (ii) the Purchase Price. If the Board determines
in
good faith that it is likely that sufficient additional shares of
Common
Shares could be authorized for issuance upon exercise in full of
the
Rights, the thirty (30) day period set forth above may be extended
to the
extent necessary, but not more than ninety (90) days after the Section
11(a)(ii) Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such thirty
(30)
day period, as it may be extended, is herein called the “Substitution
Period”). To the extent that action is to be taken pursuant to the first
and/or third sentences of this Section 11(a)(iii), the Company (1)
shall
provide, subject to the other provisions herein, that such action
shall
apply uniformly to all outstanding Rights, and (2) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek such stockholder approval for such authorization
of additional shares and/or to decide the appropriate form of distribution
to be made pursuant to such first sentence and to determine the value
thereof. In the event of any such suspension, the Company shall issue
a
public announcement stating that the exercisability of the Rights
has been
temporarily suspended, as well as a public announcement at such time
as
the suspension is no longer in effect. For purposes of this Section
11(a)(iii), the value of each Adjustment Share shall be the current
market
price per share of the Common Shares on the Section 11(a)(ii) Trigger
Date
and the per share or per unit value of any Equivalent Common Shares
shall
be deemed to equal the current market price per share of the Common
Stock
on such date.
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15
|
(b)
|
In
the event that the Company fixes a record date for the issuance of
rights,
options or warrants to all holders of Preferred Shares entitling
them (for
a period expiring within 45 calendar days after such record date)
to
subscribe for or purchase Preferred Shares (or securities having
equivalent rights, privileges and preferences as the Preferred Shares
(for
purposes of this Section 11(b), “Equivalent Preferred Shares”)) or
securities convertible into Preferred Shares or Equivalent Preferred
Shares at a price per Preferred Share or Equivalent Preferred Share
(or
having a conversion price per share, if a security convertible into
Preferred Shares or Equivalent Preferred Shares) less than the current
per
share market price of the Preferred Shares (determined pursuant to
Section
11(d)) on such record date, the Purchase Price to be in effect after
such
record date will be determined by multiplying the Purchase Price
in effect
immediately prior to such record date by a fraction, the numerator
of
which is the number of Preferred Shares outstanding on such record
date
plus the number of Preferred Shares which the aggregate offering
price of
the total number of Preferred Shares and/or Equivalent Preferred
Shares so
to be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such current
per share market price and the denominator of which is the number
of
Preferred Shares outstanding on such record date plus the number
of
additional Preferred Shares and/or equivalent preferred shares to
be
offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); provided,
however,
that in no event shall the consideration to be paid upon the exercise
of
one Right be less than the aggregate par value of the shares of capital
stock issuable upon exercise of one Right. In case such subscription
price
may be paid in a consideration part or all of which is in a form
other
than cash, the value of such consideration will be as determined
in good
faith by the Board of Directors of the Company, whose determination
will
be described in a statement filed with the Rights Agent. Preferred
Shares
owned by or held for the account of the Company will not be deemed
outstanding for the purpose of any such computation. Such adjustment
will
be made successively whenever such a record date is fixed, and in
the
event that such rights, options or warrants are not so issued, the
Purchase Price will be adjusted to be the Purchase Price which would
then
be in effect if such record date had not been
fixed.
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|
(c)
|
In
the event that the Company fixes a record date for the making of
a
distribution to all holders of Preferred Shares (including any such
distribution made in connection with a consolidation or merger in
which
the Company is the continuing or surviving corporation) of evidences
of
indebtedness, cash (other than a regular periodic cash dividend),
assets,
stock (other than a dividend payable in Preferred Shares) or subscription
rights, options or warrants (excluding those referred to in Section
11(b)), the Purchase Price to be in effect after such record date
will be
determined by multiplying the Purchase Price in effect immediately
prior
to such record date by a fraction, the numerator of which is the
current
per share market price of the Preferred Shares (as determined pursuant
to
Section 11(d)) on such record date or, if earlier, the date on which
Preferred Shares begin to trade on an ex-dividend or when issued
basis for
such distribution, less the fair market value (as determined in good
faith
by the Board of Directors of the Company, whose determination will
be
described in a statement filed with the Rights Agent) of the portion
of
the evidences of indebtedness, cash, assets or stock so to be distributed
or of such subscription rights, options or warrants applicable to
one
Preferred Share, and the denominator of which is such current per
share
market price of the Preferred Shares; provided,
however,
that in no event shall the consideration to be paid upon the exercise
of
one Right be less than the aggregate par value of the shares of capital
stock issuable upon exercise of one Right. Such adjustments will
be made
successively whenever such a record date is fixed; and in the event
that
such distribution is not so made, the Purchase Price will again be
adjusted to be the Purchase Price which would then be in effect if
such
record date had not been fixed.
|
16
|
(d)
|
(i)
|
For
the purpose of any computation hereunder, the “Current Per Share Market
Price of Common Shares” on any date will be deemed to be the average of
the daily closing prices per share of such Common Shares for the
30
consecutive Trading Days immediately prior to such date; provided,
however,
that in the event that the Current Per Share Market Price of Common
Shares
is determined during a period following the announcement by the issuer
of
such Common Shares of (A) a dividend or distribution on such Common
Shares
payable in such Common Shares or securities convertible into such
Common
Shares (other than the Rights) or (B) any subdivision, combination
or
reclassification of such Common Shares, and prior to the expiration
of 30
Trading Days after the ex-dividend date for such dividend or distribution,
or the record date for such subdivision, combination or reclassification,
then, and in each such case, the current per share market price will
be
appropriately adjusted to take into account ex-dividend trading or
to
reflect the current per share market price per Common Share equivalent.
The closing price for each day will be the last sale price, regular
way,
or, in case no such sale takes place on such day, the average of
the
closing bid and asked prices, regular way, in either case, as reported
in
the principal consolidated transaction reporting system with respect
to
securities listed or admitted to trading on Nasdaq or, if the Common
Shares are not listed or admitted to trading on Nasdaq, as reported
in the
principal consolidated transaction reporting system with respect
to
securities listed on the principal national securities exchange on
which
the Common Shares are listed or admitted to trading or, if the Common
Shares are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average
of the
high bid and low asked prices in the over-the-counter market, as
reported
by Nasdaq or such other system then in use, or, if on any such date
the
Common Shares are not quoted by any such organization, the average
of the
closing bid and asked prices as furnished by a professional market
maker
making a market in the Common Shares selected by the Board of Directors
of
the Company. If the Common Shares are not publicly held or not so
listed
or traded, or are not the subject of available bid and asked quotes,
the
Current Per Share Market Price of Common Shares will mean the fair
value
per share as determined in good faith by the Board of Directors of
the
Company, whose determination will be described in a statement filed
with
the Rights Agent.
|
17
|
(ii)
|
For
the purpose of any computation hereunder, the “Current Per Share Market
Price of Preferred Shares” will be determined in the same manner as set
forth above for Common Shares in Section 11(d)(i), other than the
last
sentence thereof. If the Current Per Share Market Price of Preferred
Shares cannot be determined in the manner provided above, it will
be
conclusively deemed to be an amount equal to the current per share
market
price of the Common Shares multiplied by one hundred (as such number
may
be appropriately adjusted to reflect events such as stock splits,
stock
dividends, recapitalizations or similar transactions relating to
the
Common Shares occurring after the date of this Agreement). If neither
the
Common Shares nor the Preferred Shares are publicly held or so listed
or
traded, or the subject of available bid and asked quotes, “current per
share market price” of the Preferred Shares will mean the fair value per
share as determined in good faith by the Board of Directors of the
Company, whose determination will be described in a statement filed
with
the Rights Agent. For all purposes of this Agreement, the current
per
share market price of one one-hundredth of a Preferred Share will
be equal
to the current per share market price of one Preferred Share divided
by
one hundred.
|
|
(e)
|
Except
as set forth below, no adjustment in the Purchase Price will be required
unless such adjustment would require an increase or decrease of at
least
1% in such price; provided,
however,
that any adjustments which by reason of this Section 11(e) are not
required to be made will be carried forward and taken into account
in any
subsequent adjustment. All calculations under this Section 11 will
be made
to the nearest cent or to the nearest one one-millionth of a Preferred
Share or one ten-thousandth of a Common Share or other security,
as the
case may be. Notwithstanding the first sentence of this Section 11(e),
any
adjustment required by this Section 11 will be made no later than
the
earlier of (i) three years from the date of the transaction which requires
such adjustment and (ii) the Expiration
Date.
|
|
(f)
|
If
as a result of an adjustment made pursuant to Section 11(a), the
holder of
any Right thereafter exercised becomes entitled to receive any securities
of the Company other than Preferred Shares, thereafter the number
and/or
kind of such other securities so receivable upon exercise of any
Right
(and/or the Purchase Price in respect thereof) will be subject to
adjustment from time to time in a manner and on terms as nearly equivalent
as practicable to the provisions with respect to the Preferred Shares
(and
the Purchase Price in respect thereof) contained in this Section
11, and
the provisions of Sections 7, 9, 10, 13 and 14 with respect to the
Preferred Shares (and the Purchase Price in respect thereof) will
apply on
like terms to any such other securities (and the Purchase Price in
respect
thereof).
|
18
|
(g)
|
All
Rights originally issued by the Company subsequent to any adjustment
made
to the Purchase Price hereunder will evidence the right to purchase,
at
the adjusted Purchase Price, the number of one one-hundredths of
a
Preferred Share issuable from time to time hereunder upon exercise
of the
Rights, all subject to further adjustment as provided
herein.
|
|
(h)
|
Unless
the Company has exercised its election as provided in Section 11(i),
upon
each adjustment of the Purchase Price pursuant to Section 11(b) or
Section
11(c), each Right outstanding immediately prior to the making of
such
adjustment will thereafter evidence the right to purchase, at the
adjusted
Purchase Price, that number of one one-hundredths of a Preferred
Share
(calculated to the nearest one one-millionth of a Preferred Share)
obtained by (i) multiplying (x) the number of one one-hundredths
of a
Preferred Share issuable upon exercise of a Right immediately prior
to
such adjustment of the Purchase Price by (y) the Purchase Price in
effect
immediately prior to such adjustment of the Purchase Price and (ii)
dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase
Price.
|
|
(i)
|
The
Company may elect, on or after the date of any adjustment of the
Purchase
Price, to adjust the number of Rights in substitution for any adjustment
in the number of one one-hundredths of a Preferred Share issuable
upon the
exercise of a Right. Each of the Rights outstanding after such adjustment
of the number of Rights will be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior
to
such adjustment of the number of Rights will become that number of
Rights
(calculated to the nearest one ten-thousandth) obtained by dividing
the
Purchase Price in effect immediately prior to adjustment of the Purchase
Price by the Purchase Price in effect immediately after adjustment
of the
Purchase Price. The Company will make a public announcement of its
election to adjust the number of Rights, indicating the record date
for
the adjustment, and, if known at the time, the amount of the adjustment
to
be made. The Company will also notify the Rights Agent in writing
of same
pursuant to Section 9(d) hereof and give the Rights Agent a copy
of such
announcement. Such record date may be the date on which the Purchase
Price
is adjusted or any day thereafter, but, if the Right Certificates
have
been issued, such record date will be at least 10 calendar days later
than
the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to
this
Section 11(i), the Company will, as promptly as practicable, cause
to be
distributed to holders of record of Right Certificates on such record
date
Right Certificates evidencing, subject to the provisions of Section
14,
the additional Rights to which such holders are entitled as a result
of
such adjustment, or, at the option of the Company, will cause to
be
distributed to such holders of record in substitution and replacement
for
the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof if required by the Company,
new
Right Certificates evidencing all the Rights to which such holders
are
entitled after such adjustment. Right Certificates so to be distributed
will be issued, executed, and countersigned in the manner provided
for
herein (and may bear, at the option of the Company, the adjusted
Purchase
Price) and will be registered in the names of the holders of record
of
Right Certificates on the record date specified in the public
announcement.
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19
|
(j)
|
Without
respect to any adjustment or change in the Purchase Price and/or
the
number and/or kind of securities issuable upon the exercise of the
Rights,
the Right Certificates theretofore and thereafter issued may continue
to
express the Purchase Price and the number and kind of securities
which
were expressed in the initial Right Certificate issued
hereunder.
|
|
(k)
|
Before
taking any action that would cause an adjustment reducing the Purchase
Price below one one-hundredth of the then par value, if any, of the
Preferred Shares or below the then par value, if any, of any other
securities of the Company issuable upon exercise of the Rights, the
Company will take any corporate action which may, in the opinion
of its
counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Preferred Shares or such other
securities, as the case may be, at such adjusted Purchase
Price.
|
|
(l)
|
In
any case in which this Section 11 otherwise requires that an adjustment
in
the Purchase Price be made effective as of a record date for a specified
event, the Company may elect to defer until the occurrence of such
event
the issuance to the holder of any Right exercised after such record
date
the number of Preferred Shares or other securities of the Company,
if any,
issuable upon such exercise over and above the number of Preferred
Shares
or other securities of the Company, if any, issuable upon such exercise
on
the basis of the Purchase Price in effect prior to such adjustment;
provided,
however,
that the Company delivers to such holder a due xxxx or other appropriate
instrument evidencing such holder’s right to receive such additional
Preferred Shares or other securities upon the occurrence of the event
requiring such adjustment.
|
|
(m)
|
Notwithstanding
anything in this Agreement to the contrary, the Company will be entitled
to make such reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the
extent
that in its good faith judgment the Board of Directors of the Company
determines to be advisable in order that any (i) consolidation or
subdivision of the Preferred Shares, (ii) issuance wholly for cash
of
Preferred Shares at less than the current per share market price
therefor,
(iii) issuance wholly for cash of Preferred Shares or securities
which by
their terms are convertible into or exchangeable for Preferred Shares,
(iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to
holders
of its Preferred Shares is not taxable to such
stockholders.
|
|
(n)
|
Notwithstanding
anything in this Agreement to the contrary, in the event that the
Company
at any time after the Record Date but prior to the Distribution Date
(i)
pays a dividend on the outstanding Common Shares payable in Common
Shares,
(ii) subdivides the outstanding Common Shares, (iii) combines the
outstanding Common Shares into a smaller number of shares or (iv)
issues
any shares of its capital stock in a reclassification of the outstanding
Common Shares (including any such reclassification in connection
with a
consolidation or merger in which the Company is the continuing or
surviving corporation), the number of Rights associated with each
Common
Share then outstanding, or issued or delivered thereafter but prior
to the
Distribution Date, will be proportionately adjusted so that the number
of
Rights thereafter associated with each Common Share following any
such
event equals the result obtained by multiplying the number of Rights
associated with each Common Share immediately prior to such event
by a
fraction the numerator of which is the total number of Common Shares
outstanding immediately prior to the occurrence of the event and
the
denominator of which is the total number of Common Shares outstanding
immediately following the occurrence of such event. The adjustments
provided for in this Section 11(n) will be made successively whenever
such
a dividend is paid or such a subdivision, combination or reclassification
is effected.
|
20
12. Certificate
of Adjusted Purchase Price or Number of
Securities.
Whenever
an adjustment is made or any event affecting the Rights or their exercisability
(including without limitation an event which causes Rights to become null and
void) occurs as provided in Section 11 or Section 13 hereof, the Company will
promptly (a) prepare a certificate setting forth such adjustment and a brief,
reasonably detailed statement of the facts, computations and methodology
accounting for such adjustment, (b) file with the Rights Agent and with each
transfer agent for the Preferred Shares and the Common Shares a copy of such
certificate and (c) mail a brief summary of such adjustment to each holder
of a
Right Certificate in accordance with Sections 25 and 26 hereof.
13. Consolidation,
Merger or Sale or Transfer of Assets or Earning Power.
|
(a)
|
In
the event that:
|
|
(i)
|
at
any time after a Person has become an Acquiring Person, the Company
consolidates with, or merges with or into, any other Person and the
Company is not the continuing or surviving corporation of such
consolidation or merger; or
|
|
(ii)
|
at
any time after a Person has become an Acquiring Person, any Person
consolidates with the Company, or merges with or into the Company,
and the
Company is the continuing or surviving corporation of such merger
or
consolidation and, in connection with such merger or consolidation,
all or
part of the Common Shares is changed into or exchanged for stock
or other
securities of any other Person or cash or any other property;
or
|
|
(iii)
|
at
any time after a Person has become an Acquiring Person, the Company,
directly or indirectly, sells or otherwise transfers (or one or more
of
its Subsidiaries sells or otherwise transfers), in one or more
transactions, assets or earning power (including without limitation
securities creating any obligation on the part of the Company and/or
any
of its Subsidiaries) representing in the aggregate more than 50%
of the
assets or earning power of the Company and its Subsidiaries (taken
as a
whole) to any Person or Persons other than the Company or one or
more of
its wholly-owned Subsidiaries; then, and in each such case, proper
provision will be made so that from and after the latest of the
Distribution Date and the date of the occurrence of such Flip-over
Event
(A) each holder of a Right thereafter has the right to receive, upon
the
exercise thereof in accordance with the terms of this Agreement at
an
exercise price per Right equal to the product of the then-current
Purchase
Price multiplied by the number of one one-hundredths of a Preferred
Share
for which a Right was exercisable immediately prior to the Share
Acquisition Date, such number of duly authorized, validly issued,
fully
paid, non assessable and freely tradeable Common Shares of the Issuer,
free and clear of any liens, encumbrances and other adverse claims
and not
subject to any rights of call or first refusal, as equals the result
obtained by (x) multiplying the then-current Purchase Price by the
number
of one one-hundredths of a Preferred Share for which a Right is
exercisable immediately prior to the Share Acquisition Date and dividing
that product by (y) 50% of the current per share market price of
the
Common Shares of the Issuer (determined pursuant to Section 11(d)),
on the
date of the occurrence of such Flip-over Event; (B) the Issuer will
thereafter be liable for, and will assume, by virtue of the occurrence
of
such Flip-over Event, all the obligations and duties of the Company
pursuant to this Agreement; (C) the term “Company” will thereafter be
deemed to refer to the Issuer; and (D) the Issuer will take such
steps
(including without limitation the reservation of a sufficient number
of
its Common Shares to permit the exercise of all outstanding Rights)
in
connection with such consummation as may be necessary to assure that
the
provisions hereof are thereafter applicable, as nearly as reasonably
may
be possible, in relation to its Common Shares thereafter deliverable
upon
the exercise of the Rights.
|
21
|
(b)
|
For
purposes of this Section 13, “Issuer” means (i) in the case of any
Flip-over Event described in Sections 13(a)(i) or (ii) above, the
Person
that is the continuing, surviving, resulting or acquiring Person
(including the Company as the continuing or surviving corporation
of a
transaction described in Section 13(a)(ii) above), and (ii) in the
case of
any Flip-over Event described in Section 13(a)(iii) above, the Person
that
is the party receiving the greatest portion of the assets or earning
power
(including without limitation securities creating any obligation
on the
part of the Company and/or any of its Subsidiaries) transferred pursuant
to such transaction or transactions; provided,
however,
that, in any such case, (A) if (1) no class of equity security of
such
Person is, at the time of such merger, consolidation or transaction
and
has been continuously over the preceding 12-month period, registered
pursuant to Section 12 of the Exchange Act, and (2) such Person is
a
Subsidiary, directly or indirectly, of another Person, a class of
equity
security of which is and has been so registered, the term “Issuer” means
such other Person; and (B) in case such Person is a Subsidiary, directly
or indirectly, of more than one Person, a class of equity security
of two
or more of which are and have been so registered, the term “Issuer” means
whichever of such Persons is the issuer of the equity security having
the
greatest aggregate market value. Notwithstanding the foregoing, if
the
Issuer in any of the Flip over Events listed above is not a corporation
or
other legal entity having outstanding equity securities, then, and
in each
such case, (x) if the Issuer is directly or indirectly wholly-owned
by a
corporation or other legal entity having outstanding equity securities,
then all references to Common Shares of the Issuer will be deemed
to be
references to the Common Shares of the corporation or other legal
entity
having outstanding equity securities which ultimately controls the
Issuer,
and (y) if there is no such corporation or other legal entity having
outstanding equity securities, (1) proper provision will be made
so that
the Issuer creates or otherwise makes available for purposes of the
exercise of the Rights in accordance with the terms of this Agreement,
a
kind or kinds of security or securities having a fair market value
at
least equal to the economic value of the Common Shares which each
holder
of a Right would have been entitled to receive if the Issuer had
been a
corporation or other legal entity having outstanding equity securities;
and (2) all other provisions of this Agreement will apply to the
issuer of
such securities as if such securities were Common
Shares.
|
22
|
(c)
|
The
Company will not consummate any Flip-over Event if, (i) at the time
of or
immediately after such Flip-over Event, there are or would be any
rights,
warrants, instruments or securities outstanding or any agreements
or
arrangements in effect which would eliminate or substantially diminish
the
benefits intended to be afforded by the Rights, (ii) prior to,
simultaneously with or immediately after such Flip-over Event, the
stockholders of the Person who constitutes, or would constitute,
the
Issuer for purposes of Section 13(a) shall have received a distribution
of
Rights previously owned by such Person or any of its Affiliates or
Associates or (iii) the form or nature of the organization of the
Issuer
would preclude or limit the exercisability of the Rights. In addition,
the
Company will not consummate any Flip-over Event unless the Issuer
has a
sufficient number of authorized Common Shares (or other securities
as
contemplated in Section 13(b) above) which have not been issued or
reserved for issuance to permit the exercise in full of the Rights
in
accordance with this Section 13 and unless prior to such consummation
the
Company and the Issuer have executed and delivered to the Rights
Agent a
supplemental agreement providing for the terms set forth in subsections
(a) and (b) of this Section 13 and further providing that as promptly
as
practicable after the consummation of any Flip-over Event, the Issuer
will:
|
|
(i)
|
prepare
and file a registration statement under the Securities Act with respect
to
the Rights and the securities issuable upon exercise of the Rights
on an
appropriate form, and use its best efforts to cause such registration
statement to (1) become effective as soon as practicable after such
filing
and (2) remain effective (with a prospectus at all times meeting
the
requirements of the Securities Act) until the Expiration
Date;
|
|
(ii)
|
take
all such action as may be appropriate under, or to ensure compliance
with,
the securities or “blue sky” laws of the various states in connection with
the exercisability of the Rights;
and
|
|
(iii)
|
deliver
to holders of the Rights historical financial statements for the
Issuer
and each of its Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange Act.
|
|
(d)
|
The
provisions of this Section 13 will similarly apply to successive
mergers
or consolidations or sales or other transfers. In the event that
a
Flip-over Event occurs at any time after the occurrence of a Flip-in
Event, except for Rights that have become void pursuant to Section
11(a)(ii), Rights that shall not have been previously exercised will
cease
to be exercisable in the manner provided in Section 11(a)(ii) and
will
thereafter be exercisable in the manner provided in Section
13(a).
|
23
14.
Fractional
Rights and Fractional Securities.
|
(a)
|
The
Company will not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, the Company will pay as promptly as practicable
to the
registered holders of the Right Certificates with regard to which
such
fractional Rights otherwise would be issuable, an amount in cash
equal to
the same fraction of the current market value of one Right. For the
purposes of this Section 14(a), the current market value of one Right
is
the closing price of the Rights for the Trading Day immediately prior
to
the date on which such fractional Rights otherwise would have been
issuable. The closing price for any day is the last sale price, regular
way, or, in case no such sale takes place on such day, the average
of the
closing bid and asked prices, regular way, in either case as reported
in
the principal consolidated transaction reporting system with respect
to
securities listed or admitted to trading on Nasdaq or, if the Rights
are
not listed or admitted to trading on Nasdaq, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the
Rights
are listed or admitted to trading or, if the Rights are not listed
or
admitted to trading on any national securities exchange, the last
quoted
price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by Nasdaq or such
other
system then in use, or, if on any such date the Rights are not quoted
by
any such organization, the average of the closing bid and asked prices
as
furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If the Rights
are not
publicly held or are not so listed or traded, or are not the subject
of
available bid and asked quotes, the current market value of one Right
will
mean the fair value thereof as determined in good faith by the Board
of
Directors of the Company, whose determination will be described in
a
statement filed with the Rights
Agent.
|
|
(b)
|
The
Company will not be required to issue fractions of Preferred Shares
(other
than fractions which are integral multiples of one one-hundredth
of a
Preferred Share) upon exercise of the Rights or to distribute certificates
which evidence fractional Preferred Shares (other than fractions
which are
integral multiples of one one-hundredth of a Preferred Share). Fractions
of Preferred Shares in integral multiples of one one-hundredth of
a
Preferred Share may, at the election of the Company, be evidenced
by
depositary receipts pursuant to an appropriate agreement between
the
Company and a depositary selected by it, provided
that such agreement provides that the holders of such depositary
receipts
have all the rights, privileges and preferences to which they are
entitled
as beneficial owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that
are not
integral multiples of one one-hundredth of a Preferred Share, the
Company
may pay to any Person to whom or which such fractional Preferred
Shares
would otherwise be issuable an amount in cash equal to the same fraction
of the current market value of one Preferred Share. For purposes
of this
Section 14(b), the current market value of one Preferred Share is
the
closing price of the Preferred Shares (as determined in the same
manner as
set forth for Common Shares in the second sentence of Section 11(d)(i))
for the Trading Day immediately prior to the date of such exercise;
provided,
however
that if the closing price of the Preferred Shares cannot be so determined,
the closing price of the Preferred Shares for such Trading Day will
be
conclusively deemed to be an amount equal to the closing price of
the
Common Shares (determined pursuant to the second sentence of Section
11(d)(i)) for such Trading Day multiplied by one hundred (as such
number
may be appropriately adjusted to reflect events such as stock splits,
stock dividends, recapitalization s or similar transactions relating
to
the Common Shares occurring after the date of this Agreement);
provided further,
however,
that if neither the Common Shares nor the Preferred Shares are publicly
held or listed or admitted to trading on any national securities
exchange,
or the subject of available bid and asked quotes, the current market
value
of one Preferred Share will mean the fair value thereof as determined
in
good faith by the Board of Directors of the Company, whose determination
will be described in a statement filed with the Rights Agent.
|
24
|
(c)
|
Following
the occurrence of a Triggering Event, the Company will not be required
to
issue fractions of Common Shares or other securities issuable upon
exercise or exchange of the Rights or to distribute certificates
which
evidence any such fractional securities. In lieu of issuing any such
fractional securities, the Company may pay to any Person to whom
or which
such fractional securities would otherwise be issuable an amount
in cash
equal to the same fraction of the current market value of one such
security. For purposes of this Section 14(c), the current market
value of
one Common Share or other security issuable upon the exercise or
exchange
of Rights is the closing price thereof (as determined in the same
manner
as set forth for Common Shares in the second sentence of Section
11(d)(i))
for the Trading Day immediately prior to the date of such exercise
or
exchange; provided,
however,
that if neither the Common Shares nor any such other securities are
publicly held or listed or admitted to trading on any national securities
exchange, or the subject of available bid and asked quotes, the current
market value of one Common Share or such other security will mean
the fair
value thereof as determined in good faith by the Board of Directors
of the
Company, whose determination will mean the fair value thereof as
will be
described in a statement filed with the Rights Agent.
|
15.
Rights
of Action.
|
(a)
|
All
rights of action in respect of this Agreement, excepting the rights
of
action given to the Rights Agent under Sections 18 and 20 hereof,
are
vested in the respective registered holders of the Right Certificates
(and, prior to the Distribution Date, the registered holders of the
Common
Shares); and any registered holder of any Right Certificate (or,
prior to
the Distribution Date, of the Common Shares), without the consent
of the
Rights Agent or of the holder of any other Right Certificate (or,
prior to
the Distribution Date, of the holder of any Common Shares), may in
his own
behalf and for his own benefit enforce, and may institute and maintain
any
suit, action or proceeding against the Company to enforce, or otherwise
act in respect of, his right to exercise the Rights evidenced by
such
Right Certificate in the manner provided in such Right Certificate
and in
this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the
holders
of Rights would not have an adequate remedy at law for any breach
of this
Agreement and will be entitled to specific performance of the obligations
under this Agreement, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to this
Agreement.
|
|
(b)
|
Notwithstanding
anything in this Agreement to the contrary, neither the Company nor
the
Rights Agent will have any liability to any holder of a Right or
other
Person as a result of its inability to perform any of its obligations
under this Agreement by reason of any preliminary or permanent injunction
or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory, self-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
that the Company will use its best efforts to have any such order,
decree
or ruling lifted or otherwise overturned as soon as
possible.
|
25
16. Agreement
of Rights Holders.
Every
holder of a Right by accepting the same consents and agrees with the Company
and
the Rights Agent and with every other holder of a Right that:
|
(a)
|
prior
to the Distribution Date, the Rights are transferable only in connection
with the transfer of the Common
Shares;
|
|
(b)
|
after
the Distribution Date, the Right Certificates are transferable only
on the
registry books of the Rights Agent if surrendered at the office of
the
Rights Agent designated for such purpose, duly endorsed or accompanied
by
a proper instrument of transfer;
|
|
(c)
|
the
Company and the Rights Agent may deem and treat the Person in whose
name
the Right Certificate (or, prior to the Distribution Date, the associated
Common Share certificate) is registered as the absolute owner thereof
and
of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificate or the associated Common
Share certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the
Rights
Agent will be affected by any notice to the contrary;
and
|
|
(d)
|
such
holder expressly waives any right to receive any fractional Rights
and any
fractional securities upon exercise or exchange of a Right, except
as
otherwise provided in Section 14.
|
17. Right
Certificate Holder Not Deemed a Stockholder.
No
holder, as such, of any Right Certificate will be entitled to vote, receive
dividends, or be deemed for any purpose the holder of Preferred Shares or any
other securities of the Company which may at any time be issuable upon the
exercise of the Rights represented thereby, nor will anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or
any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by such
Right Certificate shall have been exercised in accordance with the provisions
of
this Agreement or exchanged pursuant to the provisions of Section
24.
18. Concerning
the Rights Agent.
|
(a)
|
The
Company will 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 preparation, delivery, amendment,
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company will also indemnify
the
Rights Agent for, and hold it harmless against, any loss, liability,
damage, judgment, fine, penalty, claim, demand, settlement suit,
action,
proceeding or expense, incurred without gross negligence, bad faith,
or
willful misconduct on the part of the Rights Agent (which gross
negligence, bad faith or willful misconduct must be determined by
a final,
non-appealable order, judgment decree or ruling of a court of competent
jurisdiction), for anything done or omitted to be done by the Rights
Agent
in connection with the acceptance, administration, exercise and
performance of its duties under this Agreement. The costs and expenses
of
defending against any claim of liability arising therefrom, directly
or
indirectly, shall be paid by the Company. The provisions of this
Section
18 and Section 20 below shall survive the termination of this Agreement,
the exercise or expiration of the Rights and the resignation, replacement
or removal of the Rights Agent.
|
26
|
(b)
|
The
Rights Agent will be authorized and protected and will incur no liability
for or in respect of any action taken, suffered, or omitted by it
in
connection with its acceptance and administration of this Agreement
and
the exercise and performance of its duties hereunder, in reliance
upon any
Right Certificate or certificate evidencing Preferred Shares or Common
Shares or other securities of the Company, instrument of assignment
or
transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement or other paper or document
believed by it to be genuine and to be signed, executed, and, where
necessary, verified or acknowledged, by the proper Person or
Persons.
|
19. Merger
or Consolidation or Change of Name of Rights Agent.
|
(a)
|
Any
Person into which the Rights Agent or any successor Rights Agent
may be
merged or with which it may be consolidated, or any Person resulting
from
any merger or consolidation to which the Rights Agent or any successor
Rights Agent is a party, 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 21. If at the time such successor Rights Agent
succeeds to the agency created by this Agreement any of the Right
Certificates shall have been countersigned but not delivered, any
such
successor Rights Agent may adopt the countersignature of the predecessor
Rights Agent and deliver such Right Certificates so countersigned;
and if
at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or
in the
name of the successor Rights Agent; and in all such cases such Right
Certificates will have the full force provided in the Right Certificates
and in this Agreement.
|
|
(b)
|
If
at any time the name of the Rights Agent changes and at such time
any of
the Right Certificates have been countersigned but not delivered,
the
Rights Agent may adopt the countersignature under its prior name
and
deliver Right Certificates so countersigned; and if at that time
any of
the Right Certificates have not been countersigned, the Rights Agent
may
countersign such Right Certificates either in its prior name or in
its
changed name; and in all such cases such Right Certificates will
have the
full force provided in the Right Certificates and in this
Agreement.
|
27
20. Duties
of Rights Agent. The
Rights Agent undertakes to perform only the duties and obligations expressly
imposed by this Agreement (and no implied duties) upon the following terms
and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, will be bound:
|
(a)
|
The
Rights Agent may consult with legal counsel (who may be legal counsel
for
the Company or an employee of the Rights Agent), and the advice or
opinion
of such counsel will be full and complete authorization and protection
to
the Rights Agent and the Rights Agent shall incur no liability for
or in
respect of any action taken or omitted in accordance with such 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 (including,
without limitation, the identity of an Acquiring Person and the
determination of the current per share market price of any security)
be
proved or established by the Company prior to taking, omitting or
suffering any action hereunder, such fact or matter (unless other
evidence
in respect thereof be herein specifically prescribed) may be deemed
to be
conclusively proved and established by a certificate signed by any
one of
the Chairman of the Board of Directors, the Chief Executive Officer,
the
Chief Financial Officer, any Vice President, the Secretary or the
Treasurer of the Company and delivered to the Rights Agent, and such
certificate will be full and complete authorization to the Rights
Agent
for any action taken, omitted or suffered 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 (which gross negligence, bad faith
or
willful misconduct must be determined by a final, non-appealable
order,
judgment, decree or ruling of a court of competent jurisdiction).
Anything
to the contrary notwithstanding, in no event shall the Rights Agent
be
liable for special, punitive, indirect, consequential or incidental
loss
or damage of any kind whatsoever (including but not limited to lost
profits), even if the Rights Agent has been advised of the likelihood
of
such loss or damage. Any liability of the Rights Agent under this
Agreement will be limited to the amount of annual fees paid by the
Company
to the Rights Agent.
|
|
(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 Right
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 Company
only.
|
|
(e)
|
The
Rights Agent will not have any liability for or be under any
responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution and delivery
hereof by the Rights Agent) or in respect of the validity or execution
of
any Right Certificate (except its countersignature thereof); nor
will it
be responsible for any breach by the Company of any covenant contained
in
this Agreement or in any Right Certificate; nor will it be responsible
for
any adjustment required under the provisions of Section 11 or 13
(including any adjustment which results in Rights becoming void)
or
responsible for the manner, method or amount of any such adjustment
or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced
by
Right Certificates after receipt of the Certificate described in
Section
12 hereof, upon which the Rights Agent may rely); nor will it by
any act
hereunder be deemed to make any representation or warranty as to
the
authorization or reservation of any shares of stock or other securities
to
be issued pursuant to this Agreement or any Right Certificate or
as to
whether any shares of stock or other securities will, when issued,
be duly
authorized, validly issued, fully paid and nonassessable.
|
28
|
(f)
|
The
Company will perform, execute, acknowledge and deliver or cause to
be
performed, executed, acknowledged and delivered all such further
and other
acts, instruments and assurances as may reasonably be required by
the
Rights Agent for the carrying out or performing by the Rights Agent
of the
provisions of this Agreement.
|
|
(g)
|
The
Rights Agent is hereby authorized and directed to accept instructions
with
respect to the performance of its duties hereunder from any one of
the
Chairman of the Board of Directors, the Chief Executive Officer,
the Chief
Financial Officer, any Vice President, the Secretary or the Treasurer
of
the Company, and to apply to such officers for advice or instructions
in
connection with its duties, and such instructions shall be full
authorization and protection to the Rights Agent, and it will not
be
liable for any action taken or suffered to be taken by it in accordance
with instructions of any such officer or for any delay in acting
while
waiting for those instructions. The Rights Agent shall be fully authorized
and protected in relying upon the most recent instructions received
by any
such officer. Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth
in
writing any action proposed to be taken, suffered or omitted by the
Rights
Agent under this Agreement and the date on and/or after which such
action
shall be taken or suffered or such omission shall be effective. The
Rights
Agent shall not be liable for any action taken or suffered 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 Company actually receives such application, unless any such officer
shall have consented in writing to an earlier date) unless, prior
to
taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response
to
such application 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 any of the Rights or other
securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with
or
lend money to the Company or otherwise act as fully and freely as
though
it were not Rights Agent under this Agreement. Nothing herein will
preclude the Rights Agent from acting in any other capacity for the
Company or for any other Person.
|
29
|
(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 (through
its
directors, officers and employees) 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 Company resulting from any such act, default, neglect
or
misconduct absent gross negligence, bad faith or willful misconduct
in the
selection and continued employment thereof (which gross negligence,
bad
faith or willful misconduct must be determined by a final, non-appealable
order, judgment, decree or ruling of an court of competent jurisdiction).
The Rights Agent will not be under any duty or responsibility to
ensure
compliance with any applicable federal or state securities laws in
connection with the issuance, transfer or exchange of Right
Certificates.
|
|
(j)
|
If,
with respect to any Right Certificate surrendered to the Rights Agent
for
exercise, transfer, split up, combination or exchange, either (i)
the
certificate attached to the form of assignment or form of election
to
purchase, as the case may be, has either not been completed or indicates
an affirmative response to clause 1 or 2 thereof, or (ii) any other
actual
or suspected irregularity exists, the Rights Agent will not take
any
further action with respect to such requested exercise, transfer,
split
up, combination or exchange without first consulting with the Company,
and
will thereafter take further action with respect thereto only in
accordance with the Company’s written
instructions.
|
|
(k)
|
No
provision of this Agreement shall require the Rights Agent to expend
or
risk its own funds or otherwise incur any financial liability in
the
performance of any of its duties hereunder or in the exercise of
its
rights if it believes that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably
assured
to it.
|
21. Change
of Rights Agent. The
Rights Agent or any successor Rights Agent may resign and be discharged from
its
duties under this Agreement upon 30 calendar days’ notice in writing mailed to
the Company and to each transfer agent of the Preferred Shares or the Common
Shares known to the Rights Agent by registered or certified mail, and to the
holders of the Right Certificates by first class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon 30 calendar days’ notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case
may
be, and to each transfer agent of the Preferred Shares and the Common Shares
by
registered or certified mail, and to the holders of the Right Certificates
by
first class mail. If the Rights Agent resigns or is removed or otherwise becomes
incapable of acting, the Company will appoint a successor to the Rights Agent.
If the Company fails to make such appointment within a period of 30 calendar
days after giving notice of such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Right Certificate (who will, with such
notice, submit his Right Certificate for inspection by the Company), then the
registered holder of any Right Certificate may apply to any court of competent
jurisdiction for the appointment of a new Rights Agent. Any successor Rights
Agent, whether appointed by the Company or by such a court, will be a Person
organized and doing business under the laws of the United States or of the
State
of New York (or of any other state of the United States so long as such Person
is authorized to do business as a banking institution in the State of New York),
in good standing, having a principal office in the State of New York, which
is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authority
and
which has at the time of its appointment as Rights Agent a combined capital
and
surplus of at least $50 million. After appointment, the successor Rights Agent
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 will deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver
any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent
of
the Preferred Shares or the Common Shares, and mail a notice thereof in writing
to the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, will 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.
30
22. Issuance
of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights
in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price per share and the number or kind of securities
issuable upon exercise of the Rights made in accordance with the provisions
of
this Agreement. In addition, in connection with the issuance or sale by the
Company of Common Shares following the Distribution Date and prior to the
Expiration Date, the Company (a) will, with respect to Common Shares so issued
or sold pursuant to the exercise, exchange or conversion of securities (other
than Rights) issued prior to the Distribution Date which are exercisable or
exchangeable for, or convertible into Common Shares and (b) may, in any other
case, if deemed necessary, appropriate or desirable by the Board of Directors
of
the Company, issue Right Certificates representing an equivalent number of
Rights as would have been issued in respect of such Common Shares if they had
been issued or sold prior to the Distribution Date, as appropriately adjusted
as
provided herein as if they had been so issued or sold; provided,
however,
that
(i) no such Right Certificate will be issued if, and to the extent that, in
its
good faith judgment the Board of Directors of the Company determines that the
issuance of such Right Certificate could have a material adverse tax consequence
to the Company or to the Person to whom or which such Right Certificate
otherwise would be issued and (ii) no such Right Certificate will be issued
if,
and to the extent that, appropriate adjustment otherwise has been made in lieu
of the issuance thereof.
23. Redemption.
|
(a)
|
Prior
to the Expiration Date, the Board of Directors of the Company may,
at its
option, redeem all but not less than all of the then-outstanding
Rights at
the Redemption Price at any time prior to the Close of Business on
the
later of (i) the Distribution Date and (ii) Share Acquisition Date.
Any
such redemption will be effective immediately upon the action of
the Board
of Directors of the Company ordering the same, unless such action
of the
Board of Directors of the Company expressly provides that such redemption
will be effective at a subsequent time or upon the occurrence or
nonoccurrence of one or more specified events (in which case such
redemption will be effective in accordance with the provisions of
such
action of the Board of Directors of the Company).
|
31
|
(b)
|
Immediately
upon the effectiveness of the redemption of the Rights as provided
in
Section 23(a), and without any further action and without any notice,
the
right to exercise the Rights will terminate and the only right thereafter
of the holders of Rights will be to receive the Redemption Price,
without
interest thereon. Promptly after the effectiveness of the redemption
of
the Rights as provided in Section 23(a), the Company will publicly
announce such redemption (with prompt written notice thereof to the
Rights
Agent) and, within 10 calendar days thereafter, will give notice
of such
redemption to the holders of the then-outstanding Rights by mailing
such
notice to all such holders at their last addresses as they appear
upon the
registry books of the Company; provided,
however,
that the failure to give, or any defect in, any such notice will
not
affect the validity of the redemption of the Rights. Any notice that
is
mailed in the manner herein provided will be deemed given, whether
or not
the holder receives the notice. The notice of redemption mailed to
the
holders of Rights will state the method by which the payment of the
Redemption Price will be made. The Company may, at its option, pay
the
Redemption Price in cash, Common Shares (based upon the current per
share
market price of the Common Shares (determined pursuant to Section
11(d))
at the time of redemption), or any other form of consideration deemed
appropriate by the Board of Directors of the Company (based upon
the fair
market value of such other consideration, determined by the Board
of
Directors of the Company in good faith) or any combination thereof.
The
Company may, at its option, combine the payment of the Redemption
Price
with any other payment being made concurrently to holders of Common
Shares
and, to the extent that any such other payment is discretionary,
may
reduce the amount thereof on account of the concurrent payment of
the
Redemption Price. If legal or contractual restrictions prevent the
Company
from paying the Redemption Price (in the form of consideration deemed
appropriate by the Board of Directors) at the time of redemption,
the
Company will pay the Redemption Price, without interest, promptly
after
such time as the Company ceases to be so prevented from paying the
Redemption Price.
|
24. Exchange.
|
(a)
|
The
Board of Directors of the Company may, at its option, at any time
after
the later of the Share Acquisition Date and the Distribution Date,
exchange all or part of the then-outstanding and exercisable Rights
(which
will not include Rights that have become void pursuant to the provisions
of Section 11(a)(ii)) for Common Shares at an exchange ratio of one
Common
Share per Right, appropriately adjusted to reflect any stock split,
stock
dividend or similar transaction occurring after the Record Date (such
exchange ratio being hereinafter referred to as the “Exchange Ratio”). Any
such exchange will be effective immediately upon the action of the
Board
of Directors of the Company ordering the same, unless such action
of the
Board of Directors of the Company expressly provides that such exchange
will be effective at a subsequent time or upon the occurrence or
nonoccurrence of one or more specified events (in which case such
exchange
will be effective in accordance with the provisions of such action
of the
Board of Directors of the Company). Notwithstanding the foregoing,
the
Board of Directors of the Company will not be empowered to effect
such
exchange at any time after any Person (other than the Company, any
Related
Person or any Exempt Person), who or which, together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of 50%
or more
of the then-outstanding Common
Shares.
|
32
|
(b)
|
Immediately
upon the effectiveness of the exchange of any Rights as provided
in
Section 24(a), and without any further action and without any notice,
the
right to exercise such Rights will terminate and the only right with
respect to such Rights thereafter of the holder of such Rights will
be to
receive that number of Common Shares equal to the number of such
Rights
held by such holder multiplied by the Exchange Ratio. Promptly after
the
effectiveness of the exchange of any Rights as provided in Section
24(a),
the Company will publicly announce such exchange (with prompt written
notice thereof to the Rights Agent) and, within 10 calendar days
thereafter, will give notice of such exchange to all of the holders
of
such Rights at their last addresses as they appear upon the registry
books
of the Rights Agent; provided,
however,
that the failure to give, or any defect in, such notice will not
affect
the validity of such exchange. Any notice that is mailed in the manner
herein provided will be deemed given, whether or not the holder receives
the notice. Each such notice of exchange will state the method by
which
the exchange of the Common Shares for Rights will be effected and,
in the
event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange will be effected pro rata based on
the
number of Rights (other than Rights which have become void pursuant
to the
provisions of Section 11(a)(ii)) held by each holder of
Rights.
|
|
(c)
|
In
any exchange pursuant to this Section 24, the Company, at its option,
may
substitute for any Common Share exchangeable for a Right (i) equivalent
common shares (as such term is used in Section 11(a)(iii)), (ii)
cash,
(iii) debt securities of the Company, (iv) other assets or (v) any
combination of the foregoing, in any event having an aggregate value,
as
determined in good faith by the Board of Directors of the Company
(whose
determination will be described in a statement filed with the Rights
Agent), equal to the current market value of one Common Share (determined
pursuant to Section 11(d)) on the Trading Day immediately preceding
the
date of the effectiveness of the exchange pursuant to this Section
24.
|
25. Notice
of Certain Events.
|
(a)
|
If
the Company proposes (i) to pay any dividend payable in stock of
any class
to the holders of Preferred Shares or to make any other distribution
to
the holders of Preferred Shares (other than a regular periodic cash
dividend), (ii) to offer to the holders of Preferred Shares rights,
options or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Preferred
Shares (other than a reclassification involving only the subdivision
of
outstanding Preferred Shares), (iv) to effect the liquidation, dissolution
or winding up of the Company or (v) to declare or pay any dividend
on the
Common Shares payable in Common Shares or to effect a subdivision,
combination or reclassification of the Common Shares then, in each
such
case, the Company will give to the Rights Agent and, to the extent
feasible, to each holder of a Right Certificate, in accordance with
Section 26, a notice of such proposed action, which specifies the
record
date for the purposes of such stock dividend, distribution or offering
of
rights, options or warrants, or the date on which such reclassification
,
consolidation, merger, sale, transfer, liquidation, dissolution or
winding
up is to take place and the date of participation therein by the
holders
of the Common Shares and/or Preferred Shares, if any such date is
to be
fixed, and such notice will be so given, in the case of any action
covered
by clause (i) or (ii) above, at least 10 calendar days prior to the
record
date for determining holders of the Preferred Shares for purposes
of such
action, and, in the case of any such other action, at least 10 calendar
days prior to the date of the taking of such proposed action or the
date
of participation therein by the holders of the Common Shares and/or
Preferred Shares, whichever is the earlier.
|
33
|
(b)
|
In
case any Triggering Event occurs, then, in any such case, the Company
will
as soon as practicable thereafter give to the Rights Agent and each
holder
of a Right Certificate, in accordance with Section 26 hereof, a notice
of
the occurrence of such event, which specifies the event and the
consequences of the event to holders of
Rights.
|
26. Notices.
|
(a)
|
Notices
or demands authorized by this Agreement to be given or made by the
Rights
Agent or by the holder of any Right Certificate to or on the Company
will
be sufficiently given or made if sent by first class mail, postage
prepaid
and addressed (until another address is filed in writing with the
Rights
Agent) as follows:
|
Clarus
Corporation
Xxx
Xxxxxxxx Xxxxxx, 00xx
Xxxxx
Xxxxxxxx,
XX 00000
Attention:
Xxxxxx X. Xxxxxxxxx
Facsimile:
(000) 000-0000
|
(b)
|
Subject
to the provisions of Section 21 hereof, any notice or demand authorized
by
this Agreement to be given or made by the Company or by the holder
of any
Right Certificate to or on the Rights Agent will be sufficiently
given or
made if sent by first-class mail, postage prepaid and addressed (until
another address is filed in writing with the Company) as
follows:
|
American
Stock Transfer & Trust
Company
00
Xxxxxx Xxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Attention:
General Counsel
Facsimile:
000-000-0000
|
(c)
|
Notices
or demands authorized by this Agreement to be given or made by the
Company
or the Rights Agent to the holder of any Right Certificate (or, if
prior
the Distribution Date, to the holder of any certificate evidencing
Common
Shares) will be sufficiently given or made if sent by first class
mail,
postage prepaid and addressed to such holder at the address of such
holder
as shown on the registry books of the
Company.
|
34
27. Supplements
and Amendments. Subject
to this Section 27, the Company may, in its sole and absolute discretion, and
the Rights Agent will, if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any holders
of Rights or Common Shares, any such supplement or amendment to be evidenced
by
a writing signed by the Company and the Rights Agent. From and after the time
at
which the Rights cease to be redeemable pursuant to Section 23, and subject
to
the last sentence of this Section 27, the Company may, and the Rights Agent
will, if the Company so directs, supplement or amend this Agreement without
the
approval of any holders of Rights or Common Shares in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder or (iv) to supplement or amend
the
provisions hereunder in any manner which the Company may deem desirable;
provided,
however,
that no
such supplement or amendment shall adversely affect the interests of the holders
of Rights as such (other than an Acquiring Person or an Affiliate or Associate
of an Acquiring Person), and no such supplement or amendment shall cause the
Rights again to become redeemable or cause this Agreement again to become
supplementable or amendable otherwise than in accordance with the provisions
of
this sentence. Without limiting the generality or effect of the foregoing,
this
Agreement may be supplemented or amended to provide for such voting powers
for
the Rights and such procedures for the exercise thereof, if any, as the Board
of
Directors of the Company may determine to be appropriate. Upon the delivery
of a
certificate from an officer of the Company and, if requested by the Rights
Agent, an opinion of counsel which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
will execute such supplement or amendment. Notwithstanding anything in this
Agreement to the contrary, (a) no supplement or amendment may be made which
decreases the stated Redemption Price to an amount less than $0.0001 per Right;
and (b) the Rights Agent may, and shall not be obligated to, enter into any
supplement or amendment that affects the Rights Agent’s own rights, duties,
obligations or immunities under this Agreement.
28. Successors:
Certain Covenants.
All
the
covenants and provisions of this Agreement by or for the benefit of the Company
or the Rights Agent will be binding on and inure to the benefit of their
respective successors and assigns hereunder.
29. Benefits
of this Agreement. Nothing
in this Agreement will be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Shares) any legal or equitable
right, remedy or claim under this Agreement. This Agreement will be for the
sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (or prior to the Distribution Date, the Common
Shares).
30. Governing
Law. This
Agreement, each Right and each Right Certificate issued hereunder will be deemed
to be a contract made under the internal substantive laws of the State of
Delaware and for all purposes will be governed by and construed in accordance
with the internal substantive laws of such State applicable to contracts to
be
made and performed entirely within such State.
31. Severability. If
any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement will remain in full force and effect and will in no way be affected,
impaired or invalidated; provided,
however,
that
nothing contained in this Section 31 will affect the ability of the Company
under the provisions of Section 27 to supplement or amend this Agreement to
replace such invalid, void or unenforceable term, provision, covenant or
restriction with a legal, valid and enforceable term, provision, covenant or
restriction.
32. Descriptive
Headings. Descriptive
headings of the several Sections of this Agreement are inserted for convenience
only and will not control or affect the meaning or construction of any of the
provisions hereof. Unless otherwise expressly provided, references herein to
Sections and Exhibits are to Sections and Exhibits of or to this
Agreement.
35
33. Determinations
and Actions by the Board. For
all
purposes of this Agreement, any calculation of the number of Common Shares
outstanding at any particular time, including for purposes of determining the
particular percentage of such outstanding Common Shares of which any Person
is
the Beneficial Owner, will be made in accordance with, as applicable, the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the
Exchange Act or the provisions of Section 382 of the Code, or any successor
provision or replacement provision. The Board of Directors of the Company will
have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board of Directors
of
the Company or to the Company, or as may be necessary or advisable in the
administration of this Agreement, including without limitation the right and
power to (i) interpret the provisions of this Agreement and (ii) make all
determinations deemed necessary or advisable for the administration of this
Agreement (including without limitation any determination contemplated by
Section 1(a) or any determination as to whether particular Rights shall have
become void). All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, any omission with respect to
any
of the foregoing) which are done or made by the Board of Directors of the
Company in good faith will (x) be final, conclusive and binding on the Company,
the Rights Agent, the holders of the Rights and all other parties and (y) not
subject the Board of Directors of the Company to any liability to any Person,
including without limitation the Rights Agent and the holders of the Rights.
The
Rights Agent shall always be entitled to assume that the Board of Directors
acted in good faith and shall be fully protected and incur no liability in
reliance thereon.
34. Counterparts. This
Agreement may be executed in any number of counterparts and each of such
counterparts will for all purposes be deemed to be an original, and all such
counterparts will together constitute but one and the same
instrument.
[REMAINDER
OF PAGE LEFT INTENTIONALLY BLANK]
36
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, all as of the day and year first above written.
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CLARUS
CORPORATION
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By:
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Name:
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Title:
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AMERICAN
STOCK TRANSFER & TRUST COMPANY
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By:
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Name:
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Title:
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[SIGNATURE
PAGE TO RIGHTS AGREEMENT]
EXHIBIT
A
CERTIFICATE
OF DESIGNATION
OF
SERIES
A JUNIOR PARTICIPATING
PREFERRED
STOCK
OF
CLARUS
CORPORATION
(Pursuant
to Section 151 of the General Corporation Law of the State of
Clarus
Corporation (the “Company”), a corporation organized and existing under the
General Corporation Law of the State of Delaware (the “DGCL”), DOES HEREBY
CERTIFY:
That,
pursuant to authority vested in the Board of Directors of the Company by its
Amended and Restated Certificate of Incorporation, as amended (the “Certificate
of Incorporation”), and pursuant to the provisions of Section 151 of the DGCL,
the Board of Directors of the Company has adopted the following resolution
providing for the issuance of a series of Preferred Stock:
RESOLVED,
that
pursuant to the authority expressly granted to and vested in the Board of
Directors of the Company (the “Board”) by the Amended and Restated Certificate
of Incorporation of the Company, a series of Preferred Stock, par value $0.0001
per share (the “Preferred Stock”), of the Company be, and it hereby is, created,
and that the designation and amount thereof and the powers, designations,
preferences and relative, participating, optional and other special rights
of
the shares of such series, and the qualifications, limitations or restrictions
thereof are as follows:
Section
1. Designation
and Amount.
The
shares of such series will be designated as Series A Junior Participating
Preferred Stock (the “Series A Preferred”) and the number of shares constituting
the Series A Preferred is 1,000,000. Such number of shares may be increased
or
decreased by resolution of the Board; provided,
however,
that no
decrease will reduce the number of shares of Series A Preferred to a number
less
than the number of shares then outstanding plus the number of shares reserved
for issuance upon the exercise of outstanding options, rights or warrants or
upon the conversion of any outstanding securities issued by the Company any
convertible into Series A Preferred.
A-1
Section
2. Dividends
and Distributions.
(a) Subject
to the rights of the holders of any shares of any series of Preferred Stock
ranking prior to the Series A Preferred with respect to dividends, the holders
of shares of Series A Preferred, in preference to the holders of Common Stock,
par value $0.0001 per share (the “Common Stock”), of the Company, and of any
other junior stock, will be entitled to receive, when, as and if declared by
the
Board out of funds legally available for the purpose, dividends payable in
cash
(except as otherwise provided below) on such dates as are from time to time
established for the payment of dividends on the Common Stock (each such date
being referred to herein as a “Dividend Payment Date”), commencing on the first
Dividend Payment Date after the first issuance of a share or fraction of a
share
of Series A Preferred (the “First Dividend Payment Date”), in an amount per
share (rounded to the nearest cent) equal to, subject to the provision for
adjustment hereinafter set forth, one hundred (100) times the aggregate per
share amount of all cash dividends, and one hundred (100) times the aggregate
per share amount (payable in kind) of all non-cash dividends, other than a
dividend payable in shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise), declared on the
Common Stock since the immediately preceding Dividend Payment Date or, with
respect to the First Dividend Payment Date, since the first issuance of any
share or fraction of a share of Series A Preferred. In the event that the
Company at any time (i) declares a dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivides the outstanding shares
of Common Stock, (iii) combines the outstanding shares of Common Stock into
a
smaller number of shares or (iv) issues any shares of its capital stock in
a
reclassification of the outstanding shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, in each such case
and
regardless of whether any shares of Series A Preferred are then issued or
outstanding, the amount to which holders of shares of Series A Preferred would
otherwise be entitled immediately prior to such event under clause (ii) of
the
preceding sentence will be adjusted by multiplying such amount by a fraction,
(1) the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and (2) the denominator of which is the number
of
shares of Common Stock that were outstanding immediately prior to such event.
(b) The
Company will declare a dividend on the Series A Preferred as provided in
paragraph (a) of this Section 2 immediately after it declares a dividend on
the
Common Stock (other than a dividend payable in shares of Common Stock). Each
such dividend on the Series A Preferred will be payable immediately prior to
the
time at which the related dividend on the Common Stock is payable.
(c) Dividends
will accrue on outstanding shares of Series A Preferred from the Dividend
Payment Date next preceding the date of issue of such shares, unless (i) the
date of issue of such shares is prior to the record date for the First Dividend
Payment Date, in which case dividends on such shares will accrue from the date
of the first issuance of a share of Series A Preferred or (ii) the date of
issue
is a Dividend Payment Date or is a date after the record date for the
determination of holders of shares of Series A Preferred entitled to receive
a
dividend and before such Dividend Payment Date, in either of which events such
dividends will accrue from such Dividend Payment Date. Accrued but unpaid
dividends will cumulate from the applicable Dividend Payment Date but will
not
bear interest. Dividends paid on the shares of Series A Preferred in an amount
less than the total amount of such dividends at the time accrued and payable
on
such shares will be allocated pro rata on a share-by-share basis among all
such
shares at the time outstanding. The Board may fix a record date for the
determination of holders of shares of Series A Preferred entitled to receive
payment of a dividend or distribution declared thereon, which record date will
be not more than 60 calendar days prior to the date fixed for the payment
thereof.
Section
3. Voting
Rights.
The
holders of shares of Series A Preferred will have the following voting
rights:
A-2
(a) Subject
to the provision for adjustment hereinafter set forth, each share of Series
A
Preferred will entitle the holder thereof to one hundred (100) votes on all
matters submitted to a vote of the stockholders of the Company. In the event
the
Company at any time (i) declares a dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivides the outstanding shares
of Common Stock, (iii) combines the outstanding shares of Common Stock into
a
smaller number of shares or (iv) issues any shares of its capital stock in
a
reclassification of the outstanding shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, in each such case
and
regardless of whether any shares of Series A Preferred are then issued or
outstanding, the number of votes per share to which holders of shares of Series
A Preferred would otherwise be entitled immediately prior to such event will
be
adjusted by multiplying such number by a fraction, (1) the numerator of which
is
the number of shares of Common Stock outstanding immediately after such event
and (2) the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(b) Except
as
otherwise provided herein, in any other Certificate of Designations creating
a
series of Preferred Stock or any similar stock, or by law, the holders of shares
of Series A Preferred and the holders of shares of Common Stock and any other
capital stock of the Company having general voting rights will vote together
as
one class on all matters submitted to a vote of stockholders of the
Company.
(c) Except
as
set forth in the Certificate of Incorporation or herein, or as otherwise
provided by law, holders of shares of Series A Preferred will have no voting
rights.
Section
4. Certain
Restrictions.
(a) Whenever
dividends or other dividends or distributions payable on the Series A Preferred
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred
outstanding have been paid in full, the Company will not:
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(i)
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declare
or pay dividends, or make any other distributions, on any shares
of stock
ranking junior (either as to dividends or upon liquidation, dissolution
or
winding up) to the shares of Series A
Preferred;
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(ii)
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declare
or pay dividends, or make any other distributions, on any shares
of stock
ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the shares of Series A Preferred,
except
dividends paid ratably on the shares of Series A Preferred and all
such
parity stock on which dividends are payable or in arrears in proportion
to
the total amounts to which the holders of all such shares are then
entitled;
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(iii)
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redeem,
purchase or otherwise acquire for consideration shares of any stock
ranking junior (either as to dividends or upon liquidation, dissolution
or
winding up) to the shares of Series A Preferred; provided,
however,
that the Company may at any time redeem, purchase or otherwise acquire
shares of any such junior stock in exchange for shares of any stock
of the
Company ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the shares of Series A Preferred;
or
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A-3
| (iv) |
redeem,
purchase or otherwise acquire for consideration any shares of Series
A
Preferred, or any shares of stock ranking on a parity with the shares
of
Series A Preferred, except in accordance with a purchase offer made
in
writing or by publication (as determined by the Board) to all holders
of
such shares upon such terms as the Board, after consideration of
the
respective annual dividend rates and other relative rights and preferences
of the respective series and classes, may determine in good faith
will
result in fair and equitable treatment among the respective series
or
classes.
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(b) The
Company will not permit any majority-owned subsidiary of the Company to purchase
or otherwise acquire for consideration any shares of stock of the Company unless
the Company could, under paragraph (a) of this Section 4, purchase or otherwise
acquire such shares at such time and in such manner.
Section
5. Reacquired
Shares.
Any
shares of Series A Preferred purchased or otherwise acquired by the Company
in
any manner whatsoever will be retired and canceled promptly after the
acquisition thereof. All such shares will upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part
of
a new series of Preferred Stock subject to the conditions and restrictions
on
issuance set forth herein, in the Certificate of Incorporation of the Company,
or in any other Certificate of Designations creating a series of Preferred
Stock
or any similar stock or as otherwise required by law.
Section
6. Liquidation,
Dissolution or Winding Up.
Upon any
liquidation, dissolution or winding up of the Company, no distribution will
be
made (a) to the holders of shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the shares of
Series A Preferred unless, prior thereto, the holders of shares of Series A
Preferred have received $100 per share; provided,
however,
that
the holders of shares of Series A Preferred will be entitled to receive an
aggregate amount per share, subject to the provision for adjustment hereinafter
set forth, equal to one hundred (100) times the aggregate amount to be
distributed per share to holders of shares of Common Stock or (b) to the holders
of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the shares of Series A Preferred,
except distributions made ratably on the shares of Series A Preferred and all
such parity stock in proportion to the total amounts to which the holders of
all
such shares are entitled upon such liquidation, dissolution or winding up.
In
the event the Company at any time (i) declares a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (ii) subdivides the
outstanding shares of Common Stock, (iii) combines the outstanding shares of
Common Stock into a smaller number of shares or (iv) issues any shares of its
capital stock in a reclassification of the outstanding shares of Common Stock
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), then,
in each such case and regardless of whether any shares of Series A Preferred
are
then issued or outstanding, the aggregate amount to which each holder of shares
of Series A Preferred would otherwise be entitled immediately prior to such
event under the proviso in clause (a) of the preceding sentence will be adjusted
by multiplying such amount by a fraction, (1) the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
(2) the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
A-4
Section
7. Consolidation,
Merger, Etc.
In the
event that the Company enters into any consolidation, merger, combination or
other transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property, then,
in
each such case, each share of Series A Preferred will at the same time be
similarly exchanged for or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to one hundred (100)
times
the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Company at any time
(a)
declares a dividend on the outstanding shares of Common Stock payable in shares
of Common Stock, (b) subdivides the outstanding shares of Common Stock, (c)
combines the outstanding shares of Common Stock in a smaller number of shares
or
(d) issues any shares of its capital stock in a reclassification of the
outstanding shares of Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, in each such case and regardless of whether
any
shares of Series A Preferred are then issued or outstanding, the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series A Preferred will be adjusted by multiplying such amount by a fraction,
(1) the numerator of which is the number of shares of Common Stock outstanding
immediately after such event and (2) the denominator of which is the number
of
shares of Common Stock that were outstanding immediately prior to such
event.
Section
8. Redemption.
The
shares of Series A Preferred are not redeemable.
Section
9. Rank.
The
Series A Preferred rank, with respect to the payment of dividends and the
distribution of assets, junior to all other series of the Company’s Preferred
Stock.
Section
10. Amendment.
Notwithstanding anything contained in the Certificate of Incorporation of the
Company to the contrary and in addition to any other vote required by applicable
law, the Certificate of Incorporation of the Company may not be amended in
any
manner that would materially alter or change the powers, preferences or special
rights of the Series A Preferred so as to affect them adversely without the
affirmative vote of the holders of at least 51% of the outstanding shares of
Series A Preferred, voting together as a single series.
[REMAINDER
OF PAGE LEFT INTENTIONALLY BLANK]
A-5
IN
WITNESS WHEREOF, this Certificate of Designation is executed on behalf of the
Company by the undersigned on ________ __, 2008.
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CLARUS
CORPORATION
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By:
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Name:
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Title:
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A-6
EXHIBIT
B
FORM
OF RIGHT CERTIFICATE
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Certificate No. R-
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Rights
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NOT
EXERCISABLE AFTER [________] OR EARLIER IF REDEEMED, EXCHANGED OR AMENDED.
THE
RIGHTS ARE SUBJECT TO REDEMPTION, EXCHANGE AND AMENDMENT AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE OR WERE
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR AN ASSOCIATE OF
AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) OR A
TRANSFEREE THEREOF MAY BECOME NULL AND VOID.
RIGHT
CERTIFICATE
CLARUS
CORPORATION
This
certifies that
,
or its
registered assigns, is the registered owner of the number of Rights set forth
above, each of which entitles the owner thereof, subject to the terms,
provisions, and conditions of the Rights Agreement (the “Rights Agreement”), by
and between Clarus Corporation, a Delaware corporation (the “Company”), and
American Stock Transfer & Trust Company, a New York corporation (the “Rights
Agent”), dated as of February 12, 2008, to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 p.m. (Eastern time) on the Expiration Date (as such term
is
defined in the Rights Agreement) at the principal office of the Rights Agent
designated for such purpose, one one-hundredth of a fully paid nonassessable
share of Series A Junior Participating Preferred Stock, par value $0.0001 per
share (the “Preferred Shares”), of the Company, at a purchase price of $12 per
one one-hundredth of a Preferred Share (the “Purchase Price”), upon presentation
and surrender of this Right Certificate with the Form of Election to Purchase
and related Certificate duly executed. If this Right Certificate is exercised
in
part, the holder will be entitled to receive upon surrender hereof another
Right
Certificate or Right Certificates for the number of whole Rights not exercised.
The number of Rights evidenced by this Right Certificate (and the number of
one
one-hundredths of a Preferred Share which may be purchased upon exercise
thereof) set forth above, and the Purchase Price set forth above, are the number
and Purchase Price as of the date of the Rights Agreement, based on the
Preferred Shares as constituted at such date. Terms used herein with initial
capital letters and not defined herein are used herein with the meanings
ascribed thereto in the Rights Agreement.
As
provided in the Rights Agreement, the Purchase Price and/or the number and/or
kind of securities issuable upon the exercise of the Rights evidenced by this
Right Certificate are subject to adjustment upon the occurrence of certain
events.
This
Right Certificate is subject to all of the terms, provisions and conditions
of
the Rights Agreement, which terms, provisions and conditions are hereby
incorporated herein by reference and made apart hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of the Right Certificates, which limitations of
rights include the temporary suspension of the exercisability of the Rights
under the circumstances specified in the Rights Agreement. Copies of the Rights
Agreement are on file at the office of the Rights Agent and can be obtained
from
the Company without charge upon written request therefor.
B-1
Pursuant
to the Rights Agreement, from and after the occurrence of a Flip-in Event,
any
Rights that are Beneficially Owned by (i) any Acquiring Person (or any Affiliate
or Associate of any Acquiring Person), (ii) a transferee of any Acquiring Person
(or any such Affiliate or Associate) who becomes a transferee after the
occurrence of a Flip-in Event or (iii) a transferee of any Acquiring Person
(or
any such Affiliate or Associate) who became a transferee prior to or
concurrently with the Flip-in Event pursuant to either (a) a transfer from
an
Acquiring Person to holders of its equity securities or to any Person with
whom
it has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (b) a transfer which the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding which has the
purpose or effect of avoiding certain provisions of the Rights Agreement, and
subsequent transferees of any of such Persons, will be void without any further
action and any holder of such Rights will thereafter have no rights whatsoever
with respect to such Rights under any provision of the Rights Agreement. From
and after the occurrence of a Flip-in Event, no Right Certificate will be issued
that represents Rights that are or have become void pursuant to the provisions
of the Rights Agreement, and any Right Certificate delivered to the Rights
Agent
that represents Rights that are or have become void pursuant to the provisions
of the Rights Agreement will be canceled.
This
Right Certificate, with or without other Right Certificates, may be transferred,
split up, combined or exchanged for another Right Certificate or Right
Certificates entitling the holder to purchase a like number of one
one-hundredths of a Preferred Share (or other securities, as the case may be)
as
the Right Certificate or Right Certificates surrendered entitled such holder
(or
former holder in the case of a transfer) to purchase, upon presentation and
surrender hereof at the principal office of the Rights Agent designated for
such
purpose, with the Form of Assignment (if appropriate) and the related
Certificate duly executed.
Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Company at its option at a redemption price
of $0.0001 per Right or may be exchanged in whole or in part. The Rights
Agreement may be supplemented and amended by the Company, as provided therein.
The
Company is not required to issue fractions of Preferred Shares (other than
fractions which are integral multiples of one one-hundredth of a Preferred
Share, which may, at the option of the Company, be evidenced by depositary
receipts) or other securities issuable upon the exercise of any Right or Rights
evidenced hereby. In lieu of issuing such fractional Preferred Shares or other
securities, the Company may make a cash payment, as provided in the Rights
Agreement.
B-2
No
holder
of this Right Certificate, as such, will be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or
of
any other securities of the Company which may at any time be issuable upon
the
exercise of the Right or Rights represented hereby, nor will anything contained
herein or in the Rights Agreement be construed to confer upon the holder hereof,
as such, any of the rights of a stockholder of the Company or any right to
vote
for the election of directors or upon any ratter submitted to stockholders
at
any meeting thereof, or to give or withhold consent to any corporate action,
or
to receive notice of meetings or other actions affecting stockholders (except
as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate have been exercised in accordance with the provisions of the Rights
Agreement.
This
Right Certificate will not be valid or obligatory for any purpose until it
has
been countersigned by the Rights Agent.
[REMAINDER
OF PAGE LEFT INTENTIONALLY BLANK]
B-3
WITNESS
the facsimile signature of the proper officers of the Company and its corporate
seal.
Dated
as
of ________________,
_____.
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CLARUS
CORPORATION
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By:
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Name:
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Title:
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COUNTERSIGNED:
[
]
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By:
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Name:
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Title:
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[SIGNATURE
PAGE TO RIGHT CERTIFICATE]
B-4
Form
of
Reverse Side of Right Certificate
FORM
OF ASSIGNMENT
(To
be
executed by the registered holder if such holder desires to transfer the Right
Certificate)
FOR
VALUE
RECEIVED, ____________________________________
hereby
sells, assigns and transfers unto
|
(Please
print name and address of
transferee)
|
this
Right Certificate, together with all right, title and interest therein, and
does
hereby irrevocably constitute and appoint _________________________,
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated:
_____________________, _________.
| ___________________________________ | |
|
Signature
|
|
Signature(s)
Guaranteed:
SIGNATURE(S)
SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE
17Ad-15.
The
undersigned hereby certifies that the Rights evidenced by this Right Certificate
are not beneficially owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
| ___________________________________ | |
|
Signature
|
|
B-5
CERTIFICATE
The
undersigned hereby certifies by checking the appropriate boxes that:
|
(1)
|
the
Rights evidenced by this Right Certificate ¨
are / ¨
are not being sold, assigned, transferred, split up, combined or
exchanged
by or on behalf of a Person who is or was an Acquiring Person or
an
Affiliate or Associate of any such Person (as such terms are defined
in
the Rights Agreement); and
|
|
(2)
|
after
due inquiry and to the best knowledge of the undersigned, it ¨
did / ¨
did not acquire the Rights evidenced by this Right Certificate from
any
Person who is, was or became an Acquiring Person or an Affiliate
or
Associate of an Acquiring Person.
|
Dated:
_____________________________
| ___________________________________ | |
|
Signature
|
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B-6
Form
of
Reverse Side of Right Certificate - continued
FORM
OF ELECTION TO PURCHASE
(To
be
executed if holder desires to exercise the Right Certificate)
To
Clarus
Corporation:
The
undersigned hereby irrevocably elects to exercise
Rights
represented by this Right Certificate to purchase the one one-hundredths of
a
Preferred Share or other securities issuable upon the exercise of such Rights
and requests that certificates for such securities be issued in the name of
and
delivered to:
|
Please insert social security or other identifying number:
|
|
(Please
print name and address)
|
If
such
number of Rights is not all the Rights evidenced by this Right Certificate,
a
new Right Certificate for the balance remaining of such Rights will be
registered in the name of and delivered to:
|
Please insert social security or other identifying number:
|
|
(Please
print name and address)
|
Dated:
_____________________________
|
|
|
Signature
|
Signature(s)
Guaranteed:
SIGNATURE(S)
SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS,
SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED
SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE
17Ad-15.
The
undersigned hereby certifies that
the
Rights evidenced by this Right Certificate are not beneficially owned by an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
|
Signature
|
B-7
CERTIFICATE
The
undersigned hereby certifies by checking the appropriate boxes that:
|
(1)
|
the
Rights evidenced by this Right Certificate ¨
are / ¨
are not being exercised by or on behalf of a Person who is or was
an
Acquiring Person or an Affiliate or Associate of any such Person
(as such
terms are defined pursuant to the Rights Agreement);
and
|
|
(2)
|
after
due inquiry and to the best knowledge of the undersigned, it ¨
did / ¨
did not acquire the Rights evidenced by this Right Certificate from
any
Person who is, was, or became an Acquiring Person or an Affiliate
or
Associate of an Acquiring Person.
|
Dated:
_____________________________
| ___________________________________ | |
|
Signature
|
|
B-8
NOTICE
Signatures
on the foregoing Form of Assignment and Form of Election to Purchase and in
the
related Certificates must correspond to the name as written upon the face of
this Right Certificate in every particular, without alteration or enlargement
or
any change whatsoever.
In
the
event the certification set forth above in the Form of Assignment or the Form
of
Election to Purchase, as the case may be, is not completed, the Company and
the
Rights Agent will deem the beneficial owner of the Rights evidenced by this
Right Certificate to be an Acquiring Person or an Affiliate or Associate thereof
(as defined in the Rights Agreement) and such assignment or election purchase
will not be honored.
B-9
EXHIBIT
C
SUMMARY
OF RIGHTS TO PURCHASE PREFERRED STOCK
On
February 7, 2008, the Board of Directors (the “Board”) of Clarus Corporation, a
Delaware corporation (the “Company”), adopted a rights plan and declared a
dividend of one preferred share purchase right for each outstanding share of
common stock. The dividend is payable to the Company’s stockholders as of the
record date of February 12, 2008. The terms of the rights and the rights plan
are set forth in a Rights Agreement, by and between the Company and American
Stock Transfer & Trust Company , a New York corporation, as Rights Agent,
dated as of February 12, 2008.
This
summary of rights provides only a general description of the rights plan, and
thus, should be read together with the entire rights plan, which is incorporated
in this summary by reference. Upon written request, the Company will provide
a
copy of the rights plan free of charge to any of its stockholder.
By
adopting the rights plan, the Company’s Board protects stockholder value because
the rights plan protects the Company’s ability to carry forward its net
operating losses (the “NOLs”). In prior years, the Company has experienced
substantial operating losses, and under the Internal Revenue Code and rules
promulgated by the Internal Revenue Service, the Company may “carry forward”
these losses in certain circumstances to offset current and future earnings
and
thus, reduce the Company’s federal income tax liability, subject to certain
requirements and restrictions. However, if the Company experiences an “Ownership
Change,” as defined in Section 382 of the Internal Revenue Code, the Company’s
ability to use its NOLs could be substantially limited or lost
altogether.
The
Company’s rights plan imposes a significant penalty upon any person or group
that acquires 4.9% or more of its outstanding common stock without the prior
approval of the Company’s Board. Stockholders who own 4.9% or more of the
Company’s outstanding common stock as of the close of business on February 12,
2008 may not acquire any additional shares of the Company’s common stock. A
person or group that acquires shares of the Company’s common stock in excess of
the above-mentioned applicable threshold of the Company’s common stock is called
an “Acquiring Person.” Any rights held by an Acquiring Person are void and may
not be exercised. The Company’s Board may exempt any person or group from being
deemed an Acquiring Person for purposes of the rights plan.
The
Rights.
The
Company’s Board authorized the issuance of one right per each outstanding share
of the Company’s common stock on February 12, 2008. If the rights become
exercisable, each right would allow its holder to purchase from the Company
one
one-hundredth of a share of the Company’s Series A Junior Participating
Preferred Stock for a purchase price of $12. Each fractional share of preferred
stock would give the stockholder approximately the same dividend, voting and
liquidation rights as does one share of the Company’s common stock. However, a
right does not give its holder any dividend, voting or liquidation rights prior
to exercise.
Exercisability.
The
rights will not be exercisable until 10 days after a public announcement by
the
Company that a person or group has become an Acquiring Person.
The
Company refers to the date that the rights become exercisable as the
“Distribution Date.” Until the Distribution Date, the Company’s common stock
certificates will evidence the rights and will contain a notation to that
effect. Any transfer of shares of common stock prior to the Distribution Date
will constitute a transfer of the associated rights. After the Distribution
Date, the rights will separate from the common stock and will be evidenced
by
rights certificates, which the Company will mail to all holders of rights that
have not become void.
C-1
Flip-in
Event.
After
the Distribution Date, if a person or group already is or becomes an Acquiring
Person, all holders of rights, except the acquiring person, may exercise their
rights upon payment of the purchase price to purchase shares of the Company’s
common stock (or other securities or assets as determined by the Company’s
Board) with a market value of two times the purchase price.
Flip-over
Event.
After
the Distribution Date, if a flip-in event has already occurred and the Company
is acquired in a merger or similar transaction, all holders of rights except
the
Acquiring Person may exercise their rights upon payment of the purchase price,
to purchase shares of the acquiring corporation with a market value of two
times
the purchase price of the rights.
Rights
may be exercised to purchase the Company’s preferred shares only after the
Distribution Date occurs and prior to the occurrence of a flip-in event as
described above. A Distribution Date resulting from any occurrence described
above would necessarily follow the occurrence of a flip-in event, in which
case
the rights could be exercised to purchase shares of common stock or other
securities as described above.
Expiration.
The
rights will expire at such time at which the Company’s Board of Directors
determines that the NOLs are fully utilized or no longer available under Section
382 of the Internal Revenue Code, unless earlier redeemed or
exchanged.
Redemption.
The
Company’s Board may redeem all (but not less than all) of the rights for a
redemption price of $0.0001 per right at any time before the later of the
Distribution Date and the date of the first public announcement or disclosure
by
the Company that a person or group has become an Acquiring Person. Once the
rights are redeemed, the right to exercise rights will terminate, and the only
right of the holders of rights will be to receive the redemption price. The
redemption price will be adjusted if the Company declares a stock split or
issues a stock dividend on its common stock.
Exchange.
After
the later of the distribution date and the date of the first public announcement
by the Company that a person or group has become an Acquiring Person, but before
an Acquiring Person owns 50% or more of the Company’s outstanding common stock,
the Company’s Board may exchange each right (other than rights that have become
void) for one share of common stock or an equivalent security.
Anti-Dilution
Provisions.
The
Company’s Board may adjust the purchase price of the preferred shares, the
number of preferred shares issuable and the number of outstanding rights to
prevent dilution that may occur as a result of certain events, including among
others, a stock dividend, a stock split or a reclassification of the preferred
shares or the Company’s common stock. No adjustments to the purchase price of
less than 1% will be made.
Amendments.
Before
the time the rights cease to be redeemable, the Company’s Board may amend or
supplement the rights plan without the consent of the holders of the rights,
except that no amendment may decrease the redemption price. At any time
thereafter, the Company’s Board may amend or supplement the rights plan only to
cure an ambiguity, to alter time period provisions, to correct inconsistent
provisions or to make any additional changes to the rights plan, but only to
the
extent that those changes do not impair or adversely affect any rights holder
and do not result in the rights again becoming redeemable.
C-2
