Exhibit 4.2
STOCKHOLDER PROTECTION RIGHTS AGREEMENT
THIS STOCKHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time to time,
including April 6, 1999, this "Agreement"), is made and entered into as of
September 16, 1998 between IVI Checkmate Corp., a Delaware corporation (the
"Company"), and First Union National Bank, as Rights Agent (the "Rights Agent,"
which term shall include any successor Rights Agent hereunder).
W I T N E S S E T H:
WHEREAS, on September 16, 1998, the Board of Directors of the Company (a)
established a committee of the Board known as the Rights Plan Committee and
authorized such committee to, among other things, cause to be paid, on a future
date to be determined by the committee (the "Rights Dividend Declaration Date"),
a dividend of one right ("Right") in respect of each share of Common Stock, par
value $.01 per share, of the Company and one Right in respect of each
Exchangeable Share of IVI Checkmate Ltd. held of record as of a future time and
date to be determined by the committee (the "Record Time") and (b) as provided
in Sections 2.4 and 5.3, authorized the issuance of one Right in respect of each
share of Capital Stock issued after the Record Time;
WHEREAS, subject to Sections 3.1, 5.1 and 5.10, each Right entitles the holder
thereof, after the Separation Time, to purchase securities of the Company (or,
in certain cases, of certain other entities) pursuant to the terms and subject
to the conditions set forth herein; and
WHEREAS, the Company desires to appoint the Rights Agent to act on behalf of the
Company, and the Rights Agent is willing so to act, in connection with the
issuance, transfer, exchange and replacement of Rights Certificates (as
hereinafter defined), the exercise of Rights and other matters referred to
herein;
NOW THEREFORE, in consideration of the premises and the respective agreements
set forth herein, the parties hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 Certain Definitions. For purposes of this Agreement, the following terms
have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial Owner of 15% or
more of the outstanding shares of Common Stock; provided, however, that the term
"Acquiring Person" shall not include any Person (i) who is the Beneficial Owner
of 15% or more of the outstanding shares of Common Stock on the date of this
Agreement or who shall become the Beneficial
Owner of 15% or more of the outstanding shares of Common Stock solely as a
result of an acquisition by the Company or IVI Checkmate Ltd., as the case may
be, of shares of Common Stock or Exchangeable Shares, until such time hereafter
or thereafter as any such Person shall become the Beneficial Owner (other than
by means of a stock dividend or stock split) of any additional shares of Common
Stock (including as a result of becoming the Beneficial Owner of additional
Exchangeable Shares), or (ii) who is the Beneficial Owner of 15% or more of the
outstanding shares of Common Stock but who acquired Beneficial Ownership of
shares of Common Stock without any plan or intention to seek or effect control
of the Company, if such Person promptly enters into an irrevocable commitment
promptly to divest, and thereafter promptly divests (without exercising or
retaining any power, including voting power, with respect to such shares),
sufficient shares of Common Stock (or securities convertible into, exchangeable
into or exercisable for Common Stock) so that such Person ceases to be the
Beneficial Owner of 15% or more of the outstanding shares of Common Stock. In
addition, the Company, any wholly-owned Subsidiary of the Company and any
employee stock ownership or other employee benefit plan of the Company or a
wholly-owned Subsidiary of the Company shall not be an Acquiring Person.
"Affiliate" and "Associate" shall have the respective meanings ascribed to such
terms in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as such Rule is in effect on the date of this Agreement.
A Person shall be deemed the "Beneficial Owner," and to have "Beneficial
Ownership" of, and to "Beneficially Own," any securities as to which such Person
or any of such Person's Affiliates or Associates is or may be deemed to be the
beneficial owner of pursuant to Rule 13d-3 and 13d-5 under the Exchange Act, as
such Rules are in effect on the date of this Agreement as well as any securities
as to which such Person or any of such Person's Affiliates or Associates has the
right to become Beneficial Owner (whether such right is exercisable immediately
or only after the passage of time or the occurrence of conditions) pursuant to
any agreement, arrangement or understanding, or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed the "Beneficial
Owner," or to have "Beneficial Ownership" of, or to "Beneficially Own," any
security (i) solely because such security has been tendered pursuant to a tender
or exchange offer made by such Person or any of such Person's Affiliates or
Associates until such tendered security is accepted for payment or exchange or
(ii) solely because such Person or any of such Person's Affiliates or Associates
has or shares the power to vote or direct the voting of such security pursuant
to a revocable proxy given in response to a public proxy or consent solicitation
made to more than ten holders of shares of a class of stock of the Company
registered under Section 12 of the Exchange Act and pursuant to, and in
accordance with, the applicable rules and regulations under the Exchange Act,
except if such power (or the arrangements relating thereto) is then reportable
under Item 6 of Schedule 13D under the Exchange Act (or any similar provision of
a comparable or successor report). Notwithstanding the foregoing, no officer or
director of the Company shall be deemed to Beneficially Own any securities of
any other Person by virtue of any actions such officer or director takes in such
capacity. For purposes of this Agreement, in determining the percentage of the
outstanding shares of Common Stock with
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respect to which a Person is the Beneficial Owner, all shares as to which such
Person is deemed the Beneficial Owner shall be deemed outstanding.
Notwithstanding any other provision of this Agreement, whenever reference is
made in this Agreement to Beneficial Ownership of, or a Person Beneficially
Owning, a specified percentage of the outstanding shares of Common Stock
(including for purposes of determining whether any Person is an Acquiring
Person), such percentage shall be computed by treating each outstanding
Exchangeable Share as though it were an outstanding share of Common Stock (both
for purposes of determining the number of shares of Common Stock Beneficially
Owned by such Person and the number of shares of Common Stock outstanding),
provided, however, that shares of Common Stock or Exchangeable Shares held by
the Company or any Subsidiary of the Company shall not be deemed to be
outstanding for such purpose.
"Business Day" shall mean any day other than a Saturday, Sunday or a day on
which banking institutions in Atlanta, Georgia, or the state in which the
principal office of the Rights Agent is located are generally authorized or
obligated by law or executive order to close.
"Capital Stock" shall mean Common Stock and Exchangeable Shares.
"Close of Business" on any given date shall mean 5:00 p.m. Atlanta, Georgia time
on such date (or, if such date is not a Business Day, 5:00 p.m. Atlanta, Georgia
time on the next succeeding Business Day).
"Common Stock" shall mean the shares of Common Stock, par value $0.01 per share,
of the Company.
"Exchange Time" shall mean the time at which the right to exercise the Rights
shall terminate pursuant to Section 3.1(c).
"Exchangeable Shares" means the Exchangeable Shares of IVI Checkmate Ltd., a
Canadian corporation ("IVI"), all of whose common shares are at the date hereof
owned by the Company.
"Exercise Price" shall mean, as of any date, the price at which a holder may
purchase the securities issuable upon exercise of one whole Right. Until
adjustment thereof in accordance with the terms hereof, the Exercise Price shall
equal $30.00.
"Expiration Time" shall mean the earliest of (i) the Exchange Time, (ii) the
Redemption Time, (iii) October 16, 2008 and (iv) upon the merger of the Company
into another corporation pursuant to an agreement entered into prior to the
Flip-in Date.
"Flip-In Date" shall mean the tenth Business Day after any Stock Acquisition
Date.
"Flip-Over Entity" for purposes of Section 3.2, shall mean (i) in the case of a
Flip-Over Transaction or Event described in clause (i) of the definition
thereof, the Person issuing any securities into which shares of Common Stock are
being converted or exchanged and, if no such
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securities are being issued, the other party to such Flip-Over Transaction or
Event and (ii) in the case of a Flip-Over Transaction or Event referred to in
clause (ii) of the definition thereof, the Person receiving the greatest portion
of the assets or earning power being transferred in such Flip-Over Transaction
or Event, provided in all cases if such Person is a subsidiary of another
Person, the ultimate controlling Person that is not an individual shall be the
Flip-Over Entity.
"Flip-Over Stock" shall mean the capital stock (or similar equity interest) with
the greatest voting power in respect of the election of directors (or other
persons similarly responsible for direction of the business and affairs) of the
Flip-Over Entity.
"Flip-Over Transaction or Event" shall mean a transaction or series of
transactions after a Flip-In Date in which, directly or indirectly, (i) the
Company shall consolidate or merge or participate in a share exchange with any
other Person if, at the time of the consolidation, merger or share exchange or
at the time the Company enters into any agreement with respect to any such
consolidation, merger or share exchange, the Acquiring Person Controls the Board
of Directors of the Company and either (A) any term of or arrangement concerning
the treatment of shares of capital stock in such consolidation, merger or share
exchange relating to the Acquiring Person is not identical to the terms and
arrangements relating to other holders of the Common Stock or (B) the Person
with whom the transaction or series of transactions occurs is the Acquiring
Person or an Affiliate or Associate of the Acquiring Person or (ii) the Company
shall sell or otherwise transfer (or one or more of its Subsidiaries shall sell
or otherwise transfer) assets (A) aggregating more than 50% of the assets
(measured by either book value or fair market value) or (B) generating more than
50% of the operating income or cash flow, of the Company and its Subsidiaries
(taken as a whole) to any Person (other than the Company or one or more of its
wholly owned Subsidiaries) or to two or more such Persons which are Affiliates
or Associates or otherwise acting in concert, if, at the time of the entry by
the Company (or any such Subsidiary) into an agreement with respect to such sale
or transfer of assets, the Acquiring Person Controls the Board of Directors of
the Company. An Acquiring Person shall be deemed to "Control" the Company's
Board of Directors when, following a Flip-In Date, the persons who were
directors of the Company before the Flip-In Date shall cease to constitute a
majority of the Company's Board of Directors.
"Market Price" per share of any securities on any date shall mean the average of
the daily closing prices per share of such securities (determined as described
below) on each of the 20 consecutive Trading Days through and including the
Trading Day immediately preceding such date; provided, however, that if an event
of a type analogous to any of the events described in Section 2.4 shall have
caused the closing prices used to determine the Market Price on any Trading Days
during such period of 20 Trading Days not to be fully comparable with the
closing price on such date, each such closing price so used shall be
appropriately adjusted in order to make it fully comparable with the closing
price on such date. The closing price per share of any securities on any date
shall be the last reported sale price, regular way, or, in case no such sale
takes place or is quoted on such date, the average of the closing bid and asked
prices, regular way, for each share of such securities, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New
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York Stock Exchange, Inc. or, if the securities are not listed or admitted to
trading on the New York Stock Exchange, Inc., as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the securities are listed or
admitted to trading or, if the securities are not listed or admitted to trading
on any national securities exchange, as reported by the National Association of
Securities Dealers, Inc. Nasdaq National Market System or such other system then
in use, or, if on any such date the securities are not listed or admitted to
trading on any national securities exchange or 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 securities selected by the Board of
Directors of the Company; provided, however, that if on any such date the
securities are not listed or admitted to trading on a national securities
exchange or traded in the over-the-counter market, the closing price per share
of such securities on such date shall mean the fair value per share of
securities on such date as determined in good faith by the Board of Directors of
the Company, after consultation with a nationally recognized investment banking
firm, and set forth in a certificate delivered to the Rights Agent.
"Person" shall mean any individual, firm, partnership, association, group (as
such term is used in Rule 13d-5 under the Securities Exchange Act of 1934, as
such Rule is in effect on the date of this Agreement), corporation or other
entity.
"Preferred Stock" shall mean the Series C Junior Participating Preferred Stock,
par value $0.01 per share, of the Company created by a Certificate of
Designation in substantially the form set forth in Exhibit B hereto
appropriately completed.
"Redemption Price" shall mean an amount equal to one cent, $0.01.
"Redemption Time" shall mean the time at which the right to exercise the Rights
shall terminate pursuant to Section 5.1.
"Separation Time" shall mean the Close of Business on the earlier of (i) the
tenth Business Day (or such later date as the Board of Directors of the Company
may from time to time fix by resolution adopted prior to the Separation Time
that would otherwise have occurred) after the date on which any Person commences
a tender or exchange offer which, if consummated, would result in such Person's
becoming an Acquiring Person and (ii) the Flip-In Date; provided, that if the
foregoing results in the Separation Time being prior to the Record Time, the
Separation Time shall be the Record Time and provided further, that if any
tender or exchange offer referred to in clause (i) of this paragraph is
canceled, terminated or otherwise withdrawn prior to the Separation Time without
the purchase of any shares of Common Stock pursuant thereto, such offer shall be
deemed, for purposes of this paragraph, never to have been made.
"Stock Acquisition Date" shall mean the first date of public announcement by the
Company (by any means) that an Acquiring Person has become such.
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"Subsidiary" of any specified Person shall mean any corporation or other entity
of which a majority of the voting power of the equity securities or a majority
of the equity interest is Beneficially Owned, directly or indirectly, by such
Person.
"Trading Day," when used with respect to any securities, shall mean a day on
which the New York Stock Exchange, Inc. is open for the transaction of business
or, if such securities are not listed or admitted to trading on the New York
Stock Exchange, Inc., a day on which the principal national securities exchange
on which such securities are listed or admitted to trading is open for the
transaction of business or, if such securities are not listed or admitted to
trading on any national securities exchange, a Business Day.
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record Time, the
Company will mail a letter summarizing the terms of the Rights to each holder of
record of Capital Stock as of the Record Time, at such holder's address as shown
by the records of the Company or IVI.
2.2 Issuance of Rights Certificates; Legend. (a) Certificates for the Capital
Stock issued after the Record Time but prior to the Separation Time shall
evidence one Right for each share of Capital Stock represented thereby and shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
"Until the Separation Time (as defined in the Rights Agreement referred to
below), this certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement, dated as of September
16, 1998 (as such may be amended from time to time, the "Rights
Agreement"), between IVI Checkmate Corp. (the "Company") and First Union
National Bank, as Rights Agent, the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal
executive offices of the Company. Under certain circumstances, as set forth
in the Rights Agreement, such Rights may be redeemed, may become
exercisable for securities or assets of the Company or of another entity,
may be exchanged for shares of Common Stock or other securities or assets
of the Company, may expire, may become void (if they are "Beneficially
Owned" by an "Acquiring Person" or an Affiliate or Associate thereof, as
such terms are defined in the Rights Agreement, or by any transferee of any
of the foregoing) or may be evidenced by separate certificates and may no
longer be evidenced by this certificate. The Company will mail or arrange
for the mailing of a copy of the Rights Agreement to the holder of this
certificate without charge promptly after the receipt of a written request
therefor."
Certificates representing shares of Capital Stock that are issued and
outstanding at the Record Time shall evidence one Right for each share of
Capital Stock evidenced thereby notwithstanding the absence of the foregoing
legend.
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(b) Subject to Sections 2.4 and 5.3, one Right shall be issued in respect of
(i) each share of Common Stock outstanding as of the Record Time, (ii) each
Exchangeable Share outstanding as of the Record Time (with such Rights in
respect of Exchangeable Shares deemed to be issued to International
Verifact Inc. ("IVI") for the sole purpose of simultaneously transferring
and distributing the same to holders of Exchangeable Shares in the same
manner, on the same basis, at the same time and with the same effect as
though such Exchangeable Shares (and the certificates evidencing same) were
shares of Common Stock) and (iii) each additional share of Common Stock
that becomes outstanding (whether by original issuance or out of treasury,
but other than in a transaction contemplated by Section 2.4) after the
Record Time but prior to the Separation Time.
2.3 Exercise of Rights; Separation of Rights. (a) Subject to Sections 3.1,
5.1 and 5.10 and subject to adjustment as herein set forth, each Right will
entitle the holder thereof, after the Separation Time and prior to the
Expiration Time, to purchase, for the Exercise Price, one one-thousandth
(1/1,000th) of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised and (ii) each
Right will be evidenced by the certificate for the associated share of
Capital Stock (together, in the case of certificates issued prior to the
Record Time, with the letter or notice mailed to the record holder thereof
pursuant to Section 2.1) and will be transferable only together with, and
will be transferred by a transfer (whether with or without such letter or
notice) of, such associated share.
(c) Subject to this Section 2.3 and to Sections 3.1, 5.1 and 5.10, after the
Separation Time and prior to the Expiration Time, the Rights (i) may be
exercised and (ii) may be transferred independent of shares of Capital
Stock. Promptly following the Separation Time, the Rights Agent will mail
to each holder of record of Capital Stock as of the Separation Time (other
than any Person whose Rights have become void pursuant to Section 3.1(b)),
at such holder's address as shown by the records of the Company (the
Company hereby agreeing to furnish copies of such records to the Rights
Agent for this purpose), (x) a certificate (a "Rights Certificate") in
substantially the form of Exhibit A hereto appropriately completed,
representing the number of Rights held by such holder at the Separation
Time and having such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
national securities exchange or quotation system on which the Rights may
from time to time be listed or traded, or to conform to usage, and (y) a
disclosure statement describing the Rights.
(d) Subject to Sections 3.1, 5.1 and 5.10, Rights may be exercised on any
Business Day after the Separation Time and prior to the Expiration Time by
submitting to the Rights Agent the Rights Certificate evidencing such
Rights with an Election to Exercise (an "Election to Exercise")
substantially in the form attached to the Rights Certificate duly
completed, accompanied by payment in cash, or by certified or official bank
check or money order payable to the order of the Company, of a sum equal to
the Exercise Price multiplied by the number of Rights being exercised and a
sum sufficient to cover any transfer tax or charge which may be
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payable in respect of any transfer involved in the transfer or delivery of
Rights Certificates or the issuance or delivery of certificates for shares
or depositary receipts (or both) in a name other than that of the holder of
the Rights being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to Exercise
accompanied by payment as set forth in Section 2.3(d), and subject to
Sections 3.1, 5.1 and 5.10, the Rights Agent will thereupon promptly (i)(A)
requisition from a transfer agent stock certificates evidencing such number
of shares or other securities to be purchased (the Company hereby
irrevocably authorizing its transfer agents to comply with all such
requisitions) and (B) if the Company elects pursuant to Section 5.5 not to
issue certificates representing fractional shares, requisition from the
depositary selected by the Company depositary receipts representing the
fractional shares to be purchased or requisition from the Company the
amount of cash to be paid in lieu of fractional shares in accordance with
Section 5.5 and (ii) after receipt of such certificates, depositary
receipts and/or cash, deliver the same to or upon the order of the
registered holder of such Rights Certificate, registered (in the case of
certificates or depositary receipts) in such name or names as may be
designated by such holder.
(f) In case the holder of any Rights shall exercise less than all the Rights
evidenced by such holder's Rights Certificate, a new Rights Certificate
evidencing the Rights remaining unexercised will be issued by the Rights
Agent to such holder or to such holder's duly authorized assigns.
(g) The Company covenants and agrees that it will (i) take all such action as
may be necessary to ensure that all shares delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Exercise Price), be duly and validly authorized,
executed, issued and delivered and fully paid and nonassessable; (ii) take
all such action as may be necessary to comply with any applicable
requirements of the Securities Act of 1933, the Exchange Act and securities
legislation in Canada, and the rules and regulations thereunder, and any
other applicable law, rule or regulation, in connection with the issuance
of any shares upon exercise of Rights; and (iii) pay when due and payable
any and all federal, provincial and state transfer taxes and charges which
may be payable in respect of the original issuance or delivery of the
Rights Certificates or of any shares issued upon the exercise of Rights,
provided that the Company shall not be required to pay any transfer tax or
charge which may be payable in respect of any transfer involved in the
transfer or delivery of Rights Certificates or the issuance or delivery of
certificates for shares in a name other than that of the holder of the
Rights being transferred or exercised.
2.4 Adjustments to Exercise Price; Number of Rights. (a) In the event the
Company shall at any time after the Record Time and prior to the Separation Time
(i) declare or pay a dividend on Capital Stock payable in such Capital Stock,
(ii) subdivide the outstanding Capital Stock or (iii) combine the outstanding
Capital Stock into a smaller number of shares of Capital Stock, (x) the Exercise
Price in effect after such adjustment will be equal to the Exercise Price in
effect immediately prior to such adjustment divided by the number of shares of
Capital Stock (the "Expansion Factor") that a holder of one share of such
Capital Stock immediately prior to such dividend, subdivision or combination
would hold thereafter as a result thereof (assuming for
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such purpose that the Company would issues a fraction of a share of such Capital
Stock, as applicable, and without giving effect to any requirement that cash be
paid in lieu of the issuance of any fractional share interest) and (y) each
Right held prior to such adjustment will become that number of Rights equal to
the Expansion Factor, and the adjusted number of Rights will be deemed to be
distributed among the shares of such Capital Stock with respect to which the
original Rights were associated (if they remain outstanding) and the shares
issued in respect of such dividend, subdivision or combination, so that each
such share of such Capital Stock will have exactly one Right associated with it.
Each adjustment made pursuant to this paragraph shall be made as of the payment
or effective date for the applicable dividend, subdivision or combination.
(b) In the event the Company shall at any time after the Record Time and prior
to the Separation Time issue or distribute any securities or assets in
respect of, in lieu of or in exchange for Capital Stock (other than
pursuant to a regular periodic cash dividend or a dividend paid solely in
Capital Stock) whether by dividend, in a reclassification or
recapitalization (including any such transaction involving a merger,
consolidation or share exchange), or otherwise, the Company shall make such
adjustments, if any, in the Exercise Price, number of Rights and/or
securities or other property purchasable upon exercise of Rights as the
Board of Directors of the Company, in its sole discretion, may deem to be
appropriate under the circumstances in order to adequately protect the
interests of the holders of Rights generally, and the Company and the
Rights Agent shall amend this Agreement as necessary to provide for such
adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this Section 2.4
shall be calculated to the nearest cent. Whenever an adjustment to the
Exercise Price is made pursuant to this Section 2.4, the Company shall (i)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment and (ii) promptly
file with the Rights Agent and with each transfer agent for the Common
Stock a copy of such certificate. The Rights Agent shall be fully
protected in relying on any such certificate and on any adjustment therein
and shall not be deemed to have knowledge of any such adjustment unless and
until it shall have received such a certificate.
Rights Certificates shall represent the securities purchasable under the terms
of this Agreement, including any adjustment or change in the securities
purchasable upon exercise of the Rights, even though such certificates may
continue to express the securities purchasable at the time of issuance of the
initial Rights Certificates.
2.5 Date on Which Exercise is Effective. Each person in whose name any
certificate for shares is issued upon the exercise of Rights shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on the date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Exercise Price for such Rights (and any
applicable taxes and other governmental charges payable by the exercising holder
hereunder) was made; provided, however, that if the date of such surrender and
payment is a date upon which the stock transfer books of the Company are closed,
such person shall be deemed to have become the record holder of such shares on,
and such certificate shall be dated, the next succeeding Business Day on which
the stock transfer books of the Company are open.
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2.6 Execution, Authentication, Delivery and Dating of Rights Certificates. (a)
The Rights Certificates shall be executed on behalf of the Company by its
Chairman of the Board, President or one of its Vice Presidents, under its
corporate seal reproduced thereon attested by its Secretary or one of its
Assistant Secretaries. The signature of any of these officers on the Rights
Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to or after the countersignature and delivery of such Rights
Certificates.
Promptly after the Separation Time, the Company will notify the Rights Agent of
such Separation Time and will deliver Rights Certificates executed by the
Company to the Rights Agent for countersignature, and, subject to Section
3.1(b), an authorized signatory of the Rights Agent shall manually countersign
and deliver such Rights Certificates to the holders of the Rights pursuant to
Section 2.3(c). No Rights Certificate shall be valid for any purpose unless
manually countersigned by an authorized signatory of the Rights Agent.
(b) Each Rights Certificate shall be dated the date of countersignature
thereof.
2.7 Registration, Registration of Transfer and Exchange. (a) After the
Separation Time, the Company will cause to be kept a register (the "Rights
Register") in which, subject to such reasonable regulations as it may prescribe,
the Company will provide for the registration and transfer of Rights. The
Rights Agent is hereby appointed "Rights Registrar" for the purpose of
maintaining the Rights Register for the Company and registering Rights and
transfers of Rights after the Separation Time as herein provided. In the event
that the Rights Agent shall cease to be the Rights Registrar, the Rights Agent
will have the right to examine the Rights Register at all reasonable times after
the Separation Time.
After the Separation Time and prior to the Expiration Time, upon surrender for
registration of transfer or exchange of any Rights Certificate, and subject to
the provisions of Section 2.7(c) and (d), the Company will execute and the
Rights Agent will countersign and deliver, in the name of the holder or the
designated transferee or transferees, as required pursuant to the holder's
instructions, one or more new Rights Certificates evidencing the same aggregate
number of Rights as did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights issued upon any
registration of transfer or exchange of Rights Certificates shall be the
valid obligations of the Company, and such Rights shall be entitled to the
same benefits under this Agreement as the Rights surrendered upon such
registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of transfer or
exchange shall be duly endorsed, or be accompanied by a written instrument
of transfer in form satisfactory to the Company or the Rights Agent, as the
case may be, duly executed by the holder thereof or such holder's attorney
duly authorized in writing. As a condition to the issuance of any new
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Rights Certificate under this Section 2.7, the Company may require the
payment of a sum sufficient to cover any tax or other governmental charge
that may be imposed in relation thereto.
(d) The Company shall not be required to register the transfer or exchange of
any Rights after such Rights have become void under Section 3.1(b), been
exchanged under Section 3.1(c) or been redeemed under Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates. (a) If any
mutilated Rights Certificate is surrendered to the Rights Agent prior to the
Expiration Time, then, subject to Sections 3.1(b), 3.1(c) and 5.1, the Company
shall execute and the Rights Agent shall countersign and deliver in exchange
therefor a new Rights Certificate evidencing the same number of Rights as did
the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights Agent prior to
the Expiration Time (i) evidence to their satisfaction of the destruction,
loss or theft of any Rights Certificate and (ii) such security or indemnity
as may be required by them to save each of them and any of their agents
harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the
absence of notice to the Company or the Rights Agent that such Rights
Certificate has been acquired by a bona fide purchaser, the Company shall
execute and upon its request the Rights Agent shall countersign and
deliver, in lieu of any such destroyed, lost or stolen Rights Certificate,
a new Rights Certificate evidencing the same number of Rights as did the
Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under this
Section 2.8, the Company may require the payment of a sum sufficient to
cover any tax or other governmental charge that may be imposed in relation
thereto and any other expenses (including the fees and expenses of the
Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.8 in lieu of
any destroyed, lost or stolen Rights Certificate shall evidence an original
additional contractual obligation of the Company, whether or not the
destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and, subject to Section 3.1(b), shall be entitled to
all the benefits of this Agreement equally and proportionately with any and
all other Rights duly issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a Rights Certificate
(or, prior to the Separation Time, the associated Capital Stock certificate) for
registration of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the person in whose name such
Rights Certificate (or, prior to the Separation Time, such Capital Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor the
Rights Agent shall be affected by any notice to the contrary. As used in this
Agreement, unless the context otherwise requires, the term "holder" of any
Rights shall mean the registered holder of such Rights (or, prior to the
Separation Time, the associated shares of Capital Stock).
-11-
2.10 Delivery and Cancellation of Certificates. All Rights Certificates
surrendered upon exercise or for registration of transfer or exchange shall, if
surrendered to any person other than the Rights Agent, be delivered to the
Rights Agent and, in any case, shall be promptly canceled by the Rights Agent.
The Company may at any time deliver to the Rights Agent for cancellation any
Rights Certificates previously countersigned and delivered hereunder which the
Company may have acquired in any manner whatsoever, and all Rights Certificates
so delivered shall be promptly canceled by the Rights Agent. No Rights
Certificates shall be countersigned in lieu of or in exchange for any Rights
Certificates canceled as provided in this Section 2.10, except as expressly
permitted by this Agreement. The Rights Agent shall return all canceled Rights
Certificates to the Company.
2.11 Agreement of Rights Holders. Every holder of Rights by accepting the same
consents and agrees with the Company and the Rights Agent and with every other
holder of Rights that:
(a) prior to the Separation Time, each Right will be transferable only together
with, and will be transferred by a transfer of, the associated share of
Capital Stock;
(b) after the Separation Time, the Rights Certificates will be transferable
only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to the
Separation Time, the associated Capital Stock certificate) for registration
of transfer, the Company, the Rights Agent and any agent of the Company or
the Rights Agent may deem and treat the person in whose name the Rights
Certificate (or, prior to the Separation Time, the associated Capital Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary;
(d) Rights Beneficially Owned by certain Persons will, under the circumstances
set forth in Section 3.1(b), become void;
(e) this Agreement may be supplemented or amended from time to time pursuant to
Section 2.4(b) or 5.4; and
(f) notwithstanding anything in this Agreement to the contrary, neither the
Company nor the Rights Agent shall have any liability to any holder of a
Right or other Persons as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however, the Company
must use its best efforts to have any such order, decree or ruling lifted
or otherwise overturned as soon as possible.
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ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. (a) In the event that prior to the Expiration Time a Flip-In Date
shall occur, except as provided in this Section 3.1, each Right shall constitute
the right to purchase from the Company, upon exercise thereof in accordance with
the terms hereof (but subject to Section 5.10), that number of shares of Common
Stock having an aggregate Market Price on the Stock Acquisition Date equal to
twice the Exercise Price for an amount in cash equal to the Exercise Price (such
right to be appropriately adjusted in order to protect the interests of the
holders of Rights generally in the event that on or after such Stock Acquisition
Date an event of a type analogous to any of the events described in Section
2.4(a) or (b) shall have occurred with respect to the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or were Beneficially
Owned on or after the Stock Acquisition Date by an Acquiring Person or an
Affiliate or Associate thereof or by any transferee, direct or indirect, of
any of the foregoing shall become void and any holder of such Rights
(including transferees) shall thereafter have no right to exercise or
transfer such Rights under any provision of this Agreement. If any Rights
Certificate is presented for assignment or exercise and the Person
presenting the same will not complete the certification set forth at the
end of the form of assignment or notice of election to exercise and provide
such additional evidence of the identity of the Beneficial Owner and its
Affiliates and Associates (or former Beneficial Owners and their Affiliates
and Associates) as the Company shall reasonably request, then the Company
shall be entitled conclusively to deem the Beneficial Owner thereof to be
an Acquiring Person or an Affiliate or Associate thereof or a transferee of
any of the foregoing and accordingly will deem the Rights evidenced thereby
to be void and not transferable or exercisable.
(c) The Board of Directors of the Company may, at its option, at any time after
a Flip-In Date and prior to the time that an Acquiring Person becomes the
Beneficial Owner of more than 50% of the outstanding shares of Common
Stock, elect to exchange all (but not less than all) the then-outstanding
Rights (other than Rights that have become void pursuant to the provisions
of Section 3.1(b)) for shares of Common Stock at an exchange ratio of one
share of Common Stock per Right (appropriately adjusted in order to protect
the interests of holders of Rights generally in the event that after the
Separation Time an event of a type analogous to any of the events described
in Section 2.4(a) or (b) shall have occurred with respect to the Common
Stock) (such exchange ratio, as adjusted from time to time, being
hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the Company electing to
exchange the Rights, without any further action and without any notice, the
right to exercise the Rights will terminate and each Right (other than Rights
that have become void pursuant to Section 3.1(b)) will thereafter represent only
the right to receive a number of shares of Common
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Stock equal to the Exchange Ratio. Promptly after the action of the Board of
Directors electing to exchange the Rights, the Company shall give notice thereof
(specifying the steps to be taken to receive shares of Common Stock in exchange
for Rights) to the Rights Agent and the holders of the Rights (other than Rights
that have become void pursuant to Section 3.1(b)) outstanding immediately prior
thereto by mailing such notice in accordance with Section 5.9.
Each Person in whose name any certificate for shares is issued upon the exchange
of Rights pursuant to this Section 3.1(c) or Section 3.1(e) shall for all
purposes be deemed to have become the holder of record of the shares represented
thereby on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of any
applicable taxes and other governmental charges payable by the holder was made;
provided, however, that if the date of such surrender and payment is a date upon
which the stock transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such Certificate
shall be dated, the next succeeding Business Day on which the stock transfer
books of the Company are open.
(d) Whenever the Company shall become obligated under Section 3.1(a) or (c) to
issue shares of Common Stock upon exercise of or in exchange for Rights,
the Company, at its option, may substitute therefor shares of Preferred
Stock, at a ratio of one one-thousandth (1/1,000th) of a share of Preferred
Stock for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient treasury shares or
authorized but unissued shares of Common Stock or Preferred Stock of the
Company to permit the exercise or exchange in full of the Rights in
accordance with Section 3.1(a) or (c), the Company shall either (i) call a
meeting of stockholders seeking approval to cause sufficient additional
shares to be authorized (provided that if such approval is not obtained the
Company will take the action specified in clause (ii) of this sentence) or
(ii) take such action as shall be necessary to ensure and provide, to the
extent permitted by applicable law and any agreements or instruments in
effect on the Stock Acquisition Date to which it is a party, that each
Right shall thereafter constitute the right to receive, (x) at the
Company's option, either (A) in return for the Exercise Price, cash, debt
or equity securities or other assets (or a combination thereof) having a
fair value equal to twice the Exercise Price, or (B) without payment of
consideration (except as otherwise required by applicable law), cash, debt
or equity securities or other assets (or a combination thereof) having a
fair value equal to the Exercise Price, or (y) if the Board of Directors of
the Company elects to exchange the Rights in accordance with Section
3.1(c), debt or equity securities or other assets (or a combination
thereof) having a fair value equal to the product of the Market Price of a
share of Common Stock on the Flip-In Date times the Exchange Ratio in
effect on the Flip-In Date, where in any case set forth in (x) or (y) above
the fair value of such debt or equity securities or other assets shall be
as determined in good faith by the Board of Directors of the Company, after
consultation with a nationally recognized investment banking firm.
3.2 Flip-over. (a) Prior to the Expiration Time, the Company shall not enter
into any agreement with respect to, consummate or permit to occur any Flip-Over
Transaction or Event unless and until it shall have entered into a supplemental
agreement with the Flip-Over Entity, for the benefit of the holders of the
Rights (other than holders of Rights that have become void
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pursuant to Section 3.1(b)), providing that, upon consummation or occurrence of
the Flip-Over Transaction or Event (i) each Right shall thereafter constitute
the right to purchase from the Flip-Over Entity, upon exercise thereof in
accordance with the terms hereof, that number of shares of Flip-Over Stock of
the Flip-Over Entity having an aggregate Market Price on the date of
consummation or occurrence of such Flip-Over Transaction or Event equal to twice
the Exercise Price for an amount in cash equal to the Exercise Price (such right
to be appropriately adjusted in order to protect the interests of the holders of
Rights generally (other than holders of Rights that have become void pursuant to
Section 3.1(b)) in the event that after such date of consummation or occurrence
an event of a type analogous to any of the events described in Section 2.4(a) or
(b) shall have occurred with respect to the Flip-Over Stock) and (ii) the Flip-
Over Entity shall thereafter be liable for, and shall assume, by virtue of such
Flip-Over Transaction or Event and such supplemental agreement, all the
obligations and duties of the Company pursuant to this Agreement. The provisions
of this Section 3.2 shall apply to successive Flip-Over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be redeemed pursuant
to Section 5.1 in connection therewith, the Company shall not enter into
any agreement with respect to, consummate or permit to occur any Flip-Over
Transaction or Event if at the time thereof there are any rights, warrants
or securities outstanding or any other arrangements, agreements or
instruments that would eliminate or otherwise diminish in any material
respect the benefits intended to be afforded by this Rights Agreement to
the holders of Rights upon consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) 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 agrees to pay to the
Rights Agent reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its reasonable expenses
and counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent, its
directors, officers, employees and agents for, and to hold each of them harmless
against, any loss, liability, or expense, incurred without gross negligence, bad
faith or willful misconduct on the part of the Rights Agent or such indemnified
party, for anything done or omitted to be done by the Rights Agent in connection
with the acceptance and administration of this Agreement or the exercise or
performance of its duties hereunder, including the costs and expenses of
defending against any claim of liability. The indemnity provided in this
Section 4.1(a) shall survive the expiration of the Rights and the termination of
this Agreement.
(b) The Rights Agent shall be fully protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in connection
with its administration of this
-15-
Agreement or the exercise or performance of its duties hereunder in
reliance upon any certificate for securities purchasable upon exercise of
Rights, Rights Certificate, certificate for other securities of the
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.
4.2 Merger or Consolidation or Change of Name of Rights Agent. (a) Any
corporation into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any corporation resulting from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent is a party, or any corporation succeeding to the stockholder services
business of the Rights Agent or any successor Rights Agent, will be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto,
provided that such corporation would be eligible for appointment as a successor
Rights Agent under the provisions of Section 4.4. In case at the time such
successor Rights Agent succeeds to the agency created by this Agreement any of
the Rights Certificates have been countersigned but not delivered, any such
successor Rights Agent may adopt the countersignature of the predecessor Rights
Agent and deliver such Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates have not been countersigned, any successor
Rights Agent may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates will have the full force provided in the
Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is changed and at such
time any of the Rights Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior
name or in its changed name; and in all such cases such Rights Certificates
shall have the full force provided in the Rights Certificates and in this
Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the duties and
obligations imposed by this Agreement upon the following terms and conditions,
by all of which the Company and the holders of Rights Certificates, by their
acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal counsel
for the Company), and the advice or opinion of such counsel will be full
and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
advice or opinion.
(b) Whenever in the performance of its duties under this Agreement the Rights
Agent deems it necessary or desirable that any fact or matter be proved or
established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
-16-
established by a certificate signed by a person believed by the Rights
Agent to be the Chairman of the Board, the President or any Vice President
and by the Treasurer or any Assistant Treasurer or the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and
such certificate will be full authorization to the Rights Agent for any
action taken or suffered in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own gross
negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the
certificates for securities purchasable upon exercise of Rights or the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and will be
deemed to have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect of the
validity of any provision of this Agreement or the execution and delivery
hereof (except the due authorization, execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any certificate
for securities purchasable upon exercise of Rights or Rights Certificate
(except its countersignature thereof); nor will it be responsible for any
breach by the Company of any covenant or condition contained in this
Agreement or in any Rights Certificate; nor will it be responsible for any
change in the exercisability of the Rights (including the Rights becoming
void pursuant to Section 3.1(b)) or any adjustment required under any
provision of this Agreement or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that
would require any such adjustment (except with respect to the exercise of
Rights after receipt of the certificate contemplated by Section 2.4
describing any such adjustment); nor will it by any act hereunder be deemed
to make any representation or warranty as to the authorization or
reservation of any securities purchasable upon exercise of Rights or any
Rights or as to whether any securities purchasable upon exercise of Rights
will, when issued, be duly and validly authorized, executed, issued and
delivered and fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and deliver
or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the
Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept instructions
with respect to the performance of its duties hereunder from any person
believed by the Rights Agent to be the Chairman of the Board, the President
or any Vice President or the Secretary or any Assistant Secretary or the
Treasurer or any Assistant Treasurer of the Company, and to apply to such
persons for advice or instructions in connection with its duties, and it
shall not be liable for any action taken or suffered by it in good faith in
accordance with instructions of any such person, or for any delay in acting
while awaiting instructions. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights
Agent, set
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forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Agreement and the date on or after which such action shall
be taken or such omission shall be effective. The Rights Agent shall not be
liable for any action taken by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the
date specified in such application (which date shall not be less than five
Business Days after the date any officer of the 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 or omitted.
(h) The Rights Agent and any stockholder, director, officer or employee of the
Rights Agent may buy, sell or deal in Common Stock, Rights or other
securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or
lend money to the Company or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall preclude
the Rights Agent from acting in any other capacity for the Company or for
any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers
hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent 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, provided the Rights Agent was
not grossly negligent in the selection and continued employment thereof.
(j) The Rights Agent undertakes only the express duties and obligations imposed
on it by this Agreement and no implied duties or obligations shall be read
into this Agreement against the Rights Agent.
(k) Anything in this Agreement to the contrary notwithstanding, in no event
shall the Rights Agent be liable for special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits).
(l) No provision of this Agreement shall require the Rights Agent to expend or
risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights
if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
4.4 Change of Rights Agent. The Rights Agent may resign and be discharged from
its duties under this Agreement upon 90 days notice (or such lesser notice as is
acceptable to the Company) in writing mailed to the Company and to each transfer
agent of Common Stock by registered or certified mail, and to the holders of the
Rights in accordance with Section 5.9. The Company may remove the Rights Agent
upon 30 days notice in writing, mailed to the Rights Agent and to each transfer
agent of the Common Stock by registered or certified mail, and to the holders of
the Rights in accordance with Section 5.9. If the Rights Agent should resign or
be
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removed or otherwise become 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 days after such removal or after it has been notified in
writing of such resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of any Rights (which holder shall, with such
notice, submit such holder's Rights Certificate for inspection by the Company),
then the holder of any Rights may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be (a) a corporation
organized and doing business under the laws of the United States or of the State
of Delaware or any other State of the United States, in good standing, which is
authorized under such laws to exercise the powers of the Rights Agent
contemplated by this Agreement and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $50,000,000 or (b) an
affiliate of a corporation described in the immediately preceding clause (a).
After appointment, the successor Rights Agent will be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company will file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock,
and mail a notice thereof in writing to the holders of the Rights. Failure to
give any notice provided for in this Section 4.4, however, or any defect
therein, shall not affect the legality or validity of the resignation or removal
of the Rights Agent or the appointment of the successor Rights Agent, as the
case may be.
ARTICLE V
MISCELLANEOUS
5.1 Redemption. (a) The Board of Directors of the Company may, at its option,
at any time prior to the close of business on the Flip-In Date elect to redeem
all (but not less than all) of the then outstanding Rights at the Redemption
Price and the Company, at its option, may pay the Redemption Price either in
cash or shares of Common Stock or other securities of the Company deemed by the
Board of Directors, in the exercise of its sole discretion, to be at least
equivalent in value to the Redemption Price.
(b) Immediately upon the action of the Board of Directors of the Company
electing to redeem the Rights (or, if the resolution of the Board of
Directors electing to redeem the Rights states that the redemption will not
be effective until the occurrence of a specified future time or event, upon
the occurrence of such future time or event), without any further action
and without any notice, the right to exercise the Rights will terminate and
each Right will thereafter represent only the right to receive the
Redemption Price in cash or securities, as determined by the Board of
Directors. Promptly after the Rights are redeemed, the Company shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice in accordance with Section 5.9.
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5.2 Expiration. The Rights and this Agreement shall expire at the Expiration
Time and no Person shall have any rights pursuant to this Agreement or any Right
after the Expiration Time, except, if the Rights are exchanged or redeemed, as
provided in Section 3.1 or 5.1.
5.3 Issuance of New Rights Certificates. Notwithstanding any of the provisions
of this Agreement or of the Rights to the contrary, the Company may, at its
option, issue new Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or change in the
number or kind or class of shares of stock purchasable upon exercise of Rights
made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock by the Company
following the Separation Time and prior to the Redemption Time or Expiration
Time pursuant to the terms of securities convertible or redeemable into shares
of Common Stock or to options, in each case issued or granted prior to, and
outstanding at, the Separation Time, the Company shall issue to the holders of
such shares of Common Stock, Rights Certificates representing the appropriate
number of Rights in connection with the issuance or sale of such shares of
Common Stock; provided, however, in each case, (i) no such Rights Certificate
shall be issued, if, and to the extent that, the Company shall be advised by
counsel that such issuance would create a significant risk of material adverse
tax consequences to the Company or to the Person to whom such Rights
Certificates would be issued, (ii) no such Rights Certificates shall be issued
if, and to the extent that, appropriate adjustment shall have otherwise been
made in lieu of the issuance thereof, and (iii) the Company shall have no
obligation to distribute Rights Certificates to any Acquiring Person or
Affiliate or Associate of an Acquiring Person or any transferee of any of the
foregoing; provided, further, that, the Company will not issue new Rights
Certificates to the holders of Exchangeable Shares who exchange their
Exchangeable Shares into Common Stock following the Separation Time and prior to
the Redemption Time or Expiration Time.
5.4 Supplements and Amendments. The Company and the Rights Agent may from time
to time supplement or amend this Agreement without the approval of any holders
of Rights (i) prior to the close of business on the Flip-In Date, in any respect
and (ii) after the close of business on the Flip-In Date, to make any changes
that the Company may deem necessary or desirable and which shall not materially
adversely affect the interests of the holders of Rights generally (other than an
Acquiring Person or an Affiliate or an Associate of an Acquiring Person) or in
order to cure any ambiguity or to correct or supplement any provision contained
herein which may be inconsistent with any other provisions herein or otherwise
defective. The Rights Agent will duly execute and deliver any supplement or
amendment hereto requested by the Company upon receipt of a certificate from the
Company that such supplement or amendment satisfies the terms of the preceding
sentence. Notwithstanding anything contained in this Agreement to the contrary,
no supplement or amendment that changes the rights and duties of the Rights
Agent under this Agreement shall be effective without the consent of the Rights
Agent.
5.5 Fractional Shares. If the Company elects not to issue certificates
representing fractional shares upon exercise or redemption of Rights, the
Company shall, in lieu thereof, in the sole discretion of the Board of
Directors, either (a) evidence such fractional shares by depositary receipts
issued pursuant to an appropriate agreement between the Company and a depositary
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selected by it, providing that each holder of a depositary receipt shall have
all of the rights, privileges and preferences to which such holder would be
entitled as a beneficial owner of such fractional share, or (b) sell such shares
on behalf of the holders of Rights and pay to the registered holder of such
Rights the appropriate fraction of price per share received upon such sale.
5.6 Rights of Action. Subject to the terms of this Agreement (including
Section 3.1(b)), rights of action in respect of this Agreement, other than
rights of action vested solely in the Rights Agent, are vested in the respective
holders of the Rights; and any holder of any Rights, without the consent of the
Rights Agent or of the holder of any other Rights, may, on such holder's own
behalf and for such holder's own benefit and the benefit of other holders of
Rights, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, such holder's
right to exercise such holder's Rights in the manner provided in such holder's
Rights Certificate and in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
5.7 Holder of Rights Not Deemed a Stockholder. No holder, as such, of any
Rights shall be entitled to vote, receive dividends or be deemed for any purpose
the holder of shares or any other securities which may at any time be issuable
on the exercise of such Rights, nor shall anything contained herein or in any
Rights Certificate be construed to confer upon the holder of any Rights, as
such, any of the rights of a 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 5.8), or to receive dividends or subscription rights, or
otherwise, until such Rights shall have been exercised or exchanged in
accordance with the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose after the
Separation Time and prior to the Expiration Time (i) to effect or permit
occurrence of any Flip-Over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section
5.9, a notice of such proposed action, which shall specify the date on which
such Flip-Over Transaction or Event, liquidation, dissolution, or winding up is
to take place, and such notice shall be so given at least 20 Business Days prior
to the date of the taking of such proposed action.
5.9 Notices. Notices or demands authorized or required by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights to or on the
Company shall be sufficiently given or made if delivered or sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
-21-
IVI Checkmate Corp.
0000 Xxxxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Secretary
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
First Union National Bank
0000 X. X. Xxxxxx Xxxx., 0X0
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Stockholder Services
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the registry books of the Rights Agent or, prior to the Separation Time, on
the registry books of the transfer agent for the Common Stock. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Failure to give a notice pursuant to the
provisions of this Agreement shall not affect the validity of any action taken
hereunder.
5.10 Suspension of Exercisability. To the extent that the Company determines
in good faith that some action will or need be taken pursuant to Section 3.1 or
to comply with federal or state securities laws, the Company may suspend the
exercisability of the Rights for ninety (90) days and any additional period that
may be reasonable in order to take such action or comply with such laws. In the
event of any such suspension, the Company shall issue as promptly as practicable
a public announcement stating that the exercisability or exchangeability of the
Rights has been temporarily suspended. Notice thereof pursuant to Section 5.9
shall not be required.
5.11 Costs of Enforcement. The Company agrees that if the Company or any other
Person the securities of which are purchasable upon exercise of Rights fails to
fulfill any of its obligations pursuant to this Agreement, then the Company or
such Person will reimburse the holder of any Rights for the costs and expenses
(including legal fees) incurred by such holder in actions to enforce such
holder's rights pursuant to any Rights or this Agreement.
5.12 Successors. All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Rights Agent shall bind and inure to the
benefit of their respective successors and assigns hereunder.
5.13 Benefits of this Agreement. Nothing in this Agreement shall be construed
to give to any Person other than the Company, the Rights Agent and the holders
of the Rights any legal
-22-
or equitable right, remedy or claim under this Agreement and this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent and
the holders of the Rights.
5.14 Determination and Actions by the Board of Directors, etc. The Board of
Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board 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. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith, shall (x) be
final, conclusive and binding on the 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 the holders of the Rights.
5.15 Descriptive Headings. Descriptive headings appear herein for convenience
only and shall not control or affect the meaning or construction of any of the
provisions hereof.
5.16 Governing Law. THIS AGREEMENT AND EACH RIGHT ISSUED HEREUNDER SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF DELAWARE AND FOR ALL
PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH
STATE APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED ENTIRELY WITHIN SUCH
STATE.
5.17 Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
5.18 [Omitted.]
5.19 Severability. If any term or provision hereof or the application thereof
to any circumstance shall, in any jurisdiction and to any extent, be invalid or
unenforceable, such term or
-23-
provision shall be ineffective as to such jurisdiction to the extent of such
invalidity or unenforceability without invalidating or rendering unenforceable
the remaining terms and provisions hereof or the application of such term or
provision to circumstances other than those as to which it is held invalid or
unenforceable.
5.20 Regulatory Approval. This Agreement will be effective on the date hereof,
subject to the receipt of all required regulatory approvals.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
IVI CHECKMATE CORP.
By:
----------------------------
Name:
Title:
FIRST UNION NATIONAL BANK, as Rights Agent
By:
----------------------------
Name:
Title:
-24-
EXHIBIT A
(Form of Rights Certificate)
Certificate No. R- Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS BENEFICIALLY
OWNED BY ACQUIRING PERSONS OR AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE FOREGOING WILL
BE VOID.
Rights Certificate
IVI CHECKMATE CORP.
This certifies that _______________________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Stockholder Protection Rights Agreement, dated as of September
16, 1998 (as amended from time to time, the "Rights Agreement"), between IVI
Checkmate Corp., a Delaware corporation (the "Company"), and First Union
National Bank, as Rights Agent (the "Rights Agent," which term shall include any
successor Rights Agent under the Rights Agreement), to purchase from the Company
at any time after the Separation Time (as such term is defined in the Rights
Agreement) and prior to the close of business on October 16, 2008, one one-
thousandth (1/1,000) of a fully paid share of Series C Junior Participating
Preferred Stock, par value $0.01 per share (the "Preferred Stock"), of the
Company (subject to adjustment as provided in the Rights Agreement) at the
Exercise Price referred to below, upon presentation and surrender of this Rights
Certificate with the Form of Election to Exercise duly executed at the principal
office of the Rights Agent. The Exercise Price shall initially be $30.00 per
Right and shall be subject to adjustment in certain events as provided in the
Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights evidenced
hereby may entitle the registered holder thereof to purchase securities of an
entity other than the Company or securities or assets of the Company other than
Preferred Stock, all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates. Copies of
the Rights Agreement are on file at the principal office of the Company and are
available without cost upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
evidencing an aggregate number of Rights equal to the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates surrendered. If this
Rights Certificate shall be exercised in part, the registered holder shall be
entitled to receive, upon surrender hereof, another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, each Right evidenced by this
Certificate may be (a) redeemed by the Company under certain circumstances, at
its option, at a redemption price of $0.01 per Right or (b) exchanged by the
Company under certain circumstances, at its option, for one share of Common
Stock or one one-thousandth (1/1,000) of a share of Preferred Stock) per Right
(or, in certain cases, other securities or assets of the Company), subject in
each case to adjustment in certain events as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of any securities
which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Rights evidenced by
this Rights Certificate shall have been exercised or exchanged as provided in
the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until
it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and its
corporate seal.
Date:
--------------------
ATTEST: IVI CHECKMATE CORP.
--------------------------------- By:
Secretary ----------------------------------
Countersigned:
FIRST UNION NATIONAL BANK
By:
------------------------------
Authorized Officer
-2-
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED _________________ hereby sells, assigns and transfers unto
--------------------------------------------------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint ______________________
Attorney, to transfer the within Rights Certificate on the books of the within-
named Company, with full power of substitution.
Dated:
------------------, -----.
Signature Guaranteed:
--------------------------------------------------
Signature
(Signature must correspond to name as written upon
the face of this Rights Certificate in every
particular, without alteration or enlargement or
any change whatsoever)
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
---------------------------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in connection
with a purported assignment, the Company will deem the Beneficial Owner of the
Rights evidenced by the enclosed Rights Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement) or a
transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to exercise the Rights Certificate.)
TO: IVI CHECKMATE CORP.
The undersigned hereby irrevocably elects to exercise _________________ whole
Rights represented by the attached Rights Certificate to purchase the shares of
Participating Preferred Stock issuable upon the exercise of such Rights and
requests that certificates for such shares be issued in the name of:
---------------------------------
Address:
---------------------------------
Social Security or other Taxpayer
Identification Number:
---------------------------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
---------------------------------
Address:
---------------------------------
Social Security or other Taxpayer
Identification Number:
---------------------------------
Dated:
----------------, -----
Signature Guaranteed:
--------------------------------------------------
Signature
(Signature must correspond to name as written upon
the face of this Rights Certificate in every
particular, without alteration or enlargement or
any change whatsoever)
Signatures must be guaranteed by an eligible guarantor institution (a bank,
stockbroker, savings and loan association or credit union with membership in an
approved signature guarantee medallion program) pursuant to Rule 17Ad-15 of the
Securities Exchange Act of 1934.
--------------------------------------------------------------------------------
(To be completed if true)
-2-
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the knowledge of the undersigned, have never been, Beneficially
Owned by an Acquiring Person or an Affiliate or Associate thereof (as defined in
the Rights Agreement).
-------------------------------------
Signature
--------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in connection
with a purported assignment, the Company will deem the Beneficial Owner of the
Rights evidenced by the enclosed Rights Certificate to be an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement) or a
transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
-3-
EXHIBIT B
CERTIFICATE OF DESIGNATIONS, PREFERENCES, LIMITATIONS AND RELATIVE
RIGHTS
OF
SERIES C JUNIOR PARTICIPATING PREFERRED STOCK
OF
IVI CHECKMATE CORP.
Pursuant to Section 151 of the Delaware General Corporation Law, IVI
Checkmate Corp., a corporation organized and existing under the Delaware General
Corporation Law (the "Corporation"),
DOES HEREBY CERTIFY that pursuant to the authority conferred upon the Board
of Directors by the Certificate of Incorporation of the Corporation, and
pursuant to Section 151 of the Delaware General Corporation Law, said Board of
Directors, at a meeting duly held on September 16, 1998, duly adopted a
resolution providing for the issuance of a series of 100,000 shares of Preferred
Stock--Junior Participating Series C, which resolution is and reads as follows:
RESOLVED, that pursuant to the authority expressly granted to and invested
in the Board of Directors of IVI Checkmate Corp. (the "Corporation") by the
provisions of the Certificate of Incorporation of the Corporation, a series of
the Preferred Stock, par value $.01 per share, of the Corporation be, and it
hereby is, established, and that such series of Preferred Stock shall have the
powers and preferences, and the relative, participating, optional and other
rights, and the qualifications, limitations, and restrictions thereon set forth
below:
1. Series C Participating Preferred Stock. There is hereby established
--------------------------------------
a series of Preferred Stock, par value $.01 per share, of the Corporation, and
the designation and certain terms, powers, preferences and other rights of the
shares of such series, and certain qualifications, limitations and restrictions
thereon, are hereby fixed as follows:
(i) The distinctive serial designation of this series shall be
"Series C Junior Participating Preferred Stock" (hereinafter called "this
Series"). Each share of this Series shall be identical in all respects with the
other shares of this Series except as to the dates from and after which
dividends thereon shall be cumulative.
(ii) The number of shares in this Series shall initially be
100,000, which number may from time to time be increased or decreased (but not
below the number then outstanding) by the Board of Directors. Shares of this
Series purchased by the Corporation shall be canceled and shall revert to
authorized but unissued shares of Preferred Stock undesignated as to series.
Shares of this Series may be issued in fractional shares, which fractional
shares shall entitle the holder, in proportion to such holder's fractional
share, to all rights of a holder of a whole share of this Series.
(iii) The holders of full or fractional shares of this Series shall
be entitled to receive, when and as declared by the Board of Directors, but only
out of funds legally available therefor, dividends, (A) on each date that
dividends or other distributions payable in Common Stock of the Corporation are
payable on or in respect of Common Stock comprising part of the Reference
Package (as defined below), in an amount per whole share of this Series equal to
the aggregate amount of dividends or other distributions (other than dividends
or distributions payable in Common Stock of the Corporation) that would be
payable on such date to a holder of the Reference Package and (B) on the last
day of March, June, September and December in each year, in an amount per whole
share of this Series equal to the excess (if any) of $1.00 over the aggregate
dividends paid per whole share of this Series during the three-month period
ending on such last day. Each such dividend shall be paid to the holders of
record of shares of this Series on the date, not exceeding sixty days preceding
such dividend or distribution payment date, fixed for that purpose by the Board
of Directors in advance of payment of each particular dividend or distribution.
Dividends on each full and each fractional share of this Series shall be
cumulative from the date such full or fractional share is originally issued;
provided that any such full or fractional share originally issued after a
dividend record date and on or prior to the dividend payment date to which such
record date relates shall not be entitled to receive the dividend payable on
such dividend payment date or any amount in respect of the period from such
original issuance to such dividend payment date.
The term "Reference Package" shall initially mean 1,000 shares of
Common Stock, par value $0.01 per share ("Common Stock"), of the Corporation. In
the event the Corporation shall at any time (A) declare or pay a dividend on any
Common Stock payable in Common Stock, (B) subdivide any Common Stock or (C)
combine any Common Stock into a smaller number of shares, then and in each such
case the Reference Package after such event shall be the Common Stock that a
holder of the Reference Package immediately prior to such event would hold
thereafter as a result thereof.
Holders of shares of this Series shall not be entitled to any
dividends, whether payable in cash, property or stock, in excess of full
cumulative dividends, as herein provided, on this Series.
So long as any shares of this Series are outstanding, no dividend
(other than a dividend in Common Stock or in any other stock ranking junior to
this Series as to dividends and upon liquidation) shall be declared or paid or
set aside for payment or other distribution declared or made upon the Common
Stock or upon any other stock ranking junior to this Series as to dividends or
upon liquidation, nor shall any Common Stock nor any other stock of the
Corporation ranking junior to or on a parity with this Series as to dividends or
upon liquidation be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund for
the redemption of any shares of any such stock) by the Corporation (except by
conversion into or exchange for stock of the Corporation ranking junior to this
Series as to dividends and upon liquidation), unless, in each case, the full
cumulative dividends (including the dividend to be due upon payment of such
dividend, distribution, redemption, purchase or other acquisition) on all
outstanding shares of this Series shall have been, or shall contemporaneously
be, paid.
(iv) In the event of any merger, consolidation, reclassification or
other transaction in which the shares of Common Stock are exchanged for or
changed into other stock or securities, cash and/or any other property, then in
any such case the shares of this Series shall at the same time be similarly
exchanged or changed in an amount per whole share equal to the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the
case may be, that a holder of the Reference Package would be entitled to receive
as a result of such transaction.
(v) In the event of any liquidation, dissolution or winding up of
the affairs of the Corporation, whether voluntary or involuntary, the holders of
full and fractional shares of this Series shall be entitled, before any
distribution or payment is made on any date to the holders of the Common Stock
or any other stock of the Corporation ranking junior to this Series upon
liquidation, to be paid in full an amount per whole share of this Series equal
to the greater of (A) $1.00 or (B) the aggregate amount distributed or to be
distributed prior to such date in connection with such liquidation, dissolution
or winding up to a holder of the Reference Package (such greater amount being
hereinafter referred to as
-2-
the "Liquidation Preference"), together with accrued dividends to such
distribution or payment date, whether or not earned or declared. If such payment
shall have been made in full to all holders of shares of this Series, the
holders of shares of this Series as such shall have no right or claim to any of
the remaining assets of the Corporation.
In the event the assets of the Corporation available for distribution
to the holders of shares of this Series upon any liquidation, dissolution or
winding up of the Corporation, whether voluntary or involuntary, shall be
insufficient to pay in full all amounts to which such holders are entitled
pursuant to the first paragraph of this Section (v), no such distribution shall
be made on account of any shares of any other class or series of Preferred Stock
ranking on a parity with the shares of this Series upon such liquidation,
dissolution or winding up unless proportionate distributive amounts shall be
paid on account of the shares of this Series, ratably in proportion to the full
distributable, amounts for which holders of all such parity shares are
respectively entitled upon such liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the Corporation,
the holders of shares of this Series then outstanding shall be entitled to be
paid out of assets of the Corporation available for distribution to its
stockholders all amounts to which such holders are entitled pursuant to the
first paragraph of this Section (v) before any payment shall be made to the
holders of Common Stock or any other stock of the Corporation ranking junior
upon liquidation to this Series.
For the purposes of this Section (v), the consolidation or merger of,
or binding share exchange by, the Corporation with any other corporation shall
not be deemed to constitute a liquidation, dissolution or winding up of the
corporation.
(vi) The shares of this Series shall not be redeemable.
(vii) In addition to any other vote or consent of stockholders
required by law or by the Certificate of Incorporation of the Corporation, each
whole share of this Series shall, on any matter, vote as a class with any other
capital stock comprising part of the Reference Package and voting on such matter
and shall have the number of votes thereon that a holder of the Reference
Package would have.
-3-
