Exhibit 4.1
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated February 18, 2003 (this
"Agreement"), is made and entered into by and between Research
Frontiers Incorporated, a Delaware corporation (the "Company"),
and Continental Stock Transfer & Trust Company, a corporation
organized under the banking laws of the State of New York (the
"Rights Agent").
RECITALS
WHEREAS, on February 18, 2003, the Board of Directors of
the Company authorized and declared a dividend distribution of one
right ("Right") for each share of Common Stock outstanding as of the
Close of Business on March 3, 2003 (the "Record Date"), each Right
initially representing the right to purchase one Common Share, upon
the terms and subject to the conditions herein set forth, and further
authorized and directed the issuance of one Right with respect to
each Common Share issued or delivered by the Company (whether
originally issued or delivered from the Company's treasury) after the
Record Date but prior to the earlier of the Distribution Date and the
Expiration Date;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms shall have the meanings indicated:
(A) "Acquiring Person" shall mean any Person
(other than the Company or any Subsidiary of the
Company or any employee benefit or stock ownership
plan of the Company or of any Subsidiary of the Company
or any Person holding Common Shares for or pursuant to
the terms of any such plan or for the purpose of funding
any such plan or funding other employee benefits for
employees of the Company or of any Subsidiary or any
current executive officer of the Company (or his or her
estate)) who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner
of 15% or more of the Common Shares then outstanding;
provided, however, that such a Person shall not be
deemed to have become an "Acquiring Person" solely as
a result of a reduction in the number of Common Shares
outstanding unless and until (i) such time as such Person
or any Affiliate or Associate of such Person shall
thereafter become the Beneficial Owner of any additional
Common Shares, other than as a result of a stock
dividend, stock split or similar transaction effected by the
Company in which all holders of Common Shares are
treated equally, or (ii) any other Person who is the
Beneficial Owner of any Common Shares shall thereafter
become an Affiliate or Associate of such Person; and
further provided, however, that if the Board of Directors of
the Company determines in good faith that a Person who
would otherwise be an "Acquiring Person" has become
such inadvertently, and such Person divests as promptly
as practicable a sufficient number of Common Shares so
that such Person would no longer be an "Acquiring
Person," then such Person shall not be deemed to be an
"Acquiring Person" for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations under the Exchange Act, as in effect on the date of
this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the exercise
of conversion rights, exchange rights, rights, warrants or
options, or otherwise (in each case, other than upon exercise
or exchange of the Rights); or
(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act), including pursuant to any agreement,
arrangement or understanding, whether or not in writing;
provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security
under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding: (A) arises solely
from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with,
the applicable provisions of the General Rules and Regulations
under the Exchange Act, and (B) is not also then reportable by
such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with
which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in
the proviso to subparagraph (ii) of this paragraph (c)) or
disposing of any voting securities of the Company;
provided, however, that a Person shall not be deemed the Beneficial
Owner of, or to beneficially own, any security (A) tendered pursuant
to a tender or exchange offer made in accordance with the
Exchange Act and the General Rules and Regulations promulgated
thereunder by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering Event, (C)
securities issuable upon exercise of Rights acquired by such Person
or any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(c) or Section 22 hereof
(the "Original Rights") or pursuant to Section 11(i) hereof in
connection with an adjustment made with respect to any Original
Rights, or (D) if such beneficial ownership arises solely as a result
of such Person's status as a "clearing agency," as defined in Section
3(a) (23) of the Exchange Act; and provided, further, that nothing in
this paragraph (c) shall cause a Person engaged in business as an
underwriter of securities to be the Beneficial Owner of, or to
beneficially own, any securities of the Company acquired through
such Person's participation in good faith in a firm commitment
underwriting registered under the Securities Act until the expiration
of 40 calendar days after the date of such acquisition, or such later
date as the Board of Directors of the Company may determine in
any specific case.
(d) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which the New York Stock Exchange or banking
institutions in New York City are authorized or obligated by law or
executive order to close.
(e) "Close of Business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 P.M., New York
City time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the
Company shall mean the Common Stock; provided, however, that,
if the Company is the continuing or surviving corporation in a
transaction described in Section 11(a) (ii) or Section 13(a) (ii) hereof,
"Common Shares" when used with reference to the Company shall
mean the capital stock or equity security with the greatest aggregate
voting power of the Company. "Common Shares" when used with
reference to any Person other than the Company, including an
Issuer, shall mean the capital stock of such Person with the greatest
aggregate voting power of such Person or the equity securities or
other equity interest having power to control or direct the
management of such Person.
(g) "Common Stock" shall mean the common stock, par value
$.0001 per share, of the Company.
(h) "Designated Holder" shall mean any: (i) Acquiring Person
or Associate or Affiliate of an Acquiring Person, (ii) transferee of an
Acquiring Person (or of any such Associate or Affiliate) which
becomes a transferee after the Acquiring Person becomes such, or
(iii) transferee of an Acquiring Person (or of any such Associate or
Affiliate) which becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and which receives such Rights
pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person (or any such Associate or Affiliate) to
holders of equity interests in such Acquiring Person (or any such
Associate or Affiliate) or to any Person with whom the Acquiring
Person (or such Associate or Affiliate) has any continuing
agreement, arrangement or understanding regarding the transferred
Rights, the Common Shares or the Company or (B) a transfer which
the Company's Board of Directors has determined to be part of a
plan, arrangement or understanding which has as a primary purpose
or effect the avoidance of Section 7(d) of this Agreement.
(i) "Distribution Date" shall mean the earlier of: (i) the Close
of Business on the tenth Business Day after the Share Acquisition
Date (or such later date as may be specified by the Board of
Directors and of which the Company will give the Rights Agent
prompt written notice), and (ii) the Close of Business on the tenth
Business Day (or such later date as may be specified by the Board
of Directors of the Company and of which the Company will give the
Rights Agent prompt written notice) after the date of the
commencement of a tender or exchange offer by any Person (other
than the Company or any Subsidiary of the Company or any
employee benefit or stock ownership plan of the Company or of any
Subsidiary of the Company or any Person holding Common Shares
for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for
employees of the Company or of any Subsidiary or any current
executive officer of the Company (or his or her estate)), within the
meaning of Rule 14d-2 of the General Rules and Regulations under
the Exchange Act if upon the consummation thereof such Person
would become an Acquiring Person.
(j) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(k) "Expiration Date" shall mean the earliest of (i) the Close
of Business on the Final Expiration Date, (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof, and (iii) the
time at which all exercisable Rights are exchanged as provided in
Section 27 hereof.
(l) "Final Expiration Date" shall mean February 18, 2013.
(m) "Flip-in Event" shall mean any event described in clauses
(A), (B) or (C) of Section 11(a)(ii) hereof.
(n) "Flip-over Event" shall mean any event described in
subsections (i), (ii) or (iii) of Section 13(a) hereof.
(o) "Issuer" shall have the meaning set forth in Section 13(b)
hereof.
(p) "NASDAQ" shall mean the National Association of
Securities Dealers, Inc. Automated Quotation System.
(q) "Person" shall mean any individual, firm, corporation,
partnership, association, trust, unincorporated organization or other
entity, as well as any syndicate or group deemed to be a person
under Section 14(d)(2) of the Exchange Act, and shall include any
successor (by merger or otherwise) of such entity.
(r) "Purchase Price" from and after the date of this
Agreement, shall mean initially $60 per Common Share and shall be
subject to adjustment from time to time as provided in this
Agreement.
(s) "Record Date" shall have the meaning set forth in the
Recitals to this Agreement.
(t) "Redemption Price" shall mean $.0001 per Right, subject
to adjustment by resolution of the Board of Directors of the Company
to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof.
(u) "Right" shall have the meaning set forth in the Recitals to
this Agreement.
(v) "Right Certificates" shall mean certificates evidencing the
Rights, in substantially the form of Exhibit A attached hereto.
(w) "Rights Agent" shall mean Continental Stock Transfer &
Trust Company, unless and until a successor Rights Agent shall
have become such pursuant to the terms of this Agreement, and
thereafter, "Rights Agent" shall mean such successor Rights Agent.
(x) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(y) "Share Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person (by press
release, filing made with the Securities and Exchange Commission
pursuant to Section 13(d) under the Exchange Act or pursuant to
other applicable law or otherwise) that an Acquiring Person has
become such.
(z) "Subsidiary" when used with reference to any Person shall
mean any other Person of which an amount of voting securities or
equity interests sufficient to elect at least a majority of the directors
or equivalent governing body is beneficially owned, directly or
indirectly, by such Person; provided, however, that for purposes of
Section 13(b) hereof, "Subsidiary" when used with reference to any
Person shall mean any corporation or other entity of which at least
20% of the voting power of the voting equity securities or equity
interests is owned, directly or indirectly, by such Person.
(aa) "Summary of Rights" shall mean the Summary of Rights
to Purchase Common Stock, in substantially the form of Exhibit B
attached hereto.
(bb) "Trading Day" shall mean any day on which the principal
national securities exchange on which the Common Shares are
listed or admitted to trading is open for the transaction of business
or, if the Common Shares are not listed or admitted to trading on any
national securities exchange, a Business Day.
(cc) "Triggering Event" shall mean any Flip-in Event or Flip-
over Event.
Section 2. Appointment of Rights Agent. The Company
hereby appoints the Rights Agent to act as agent for the Company
and the holders of the Rights (who, in accordance with Section 3
hereof, shall also be, prior to the Distribution Date, the holders of the
Common Shares) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment.
The Company may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable. Any actions which may be
taken by the Rights Agent pursuant to the terms of this Agreement
may be taken by any such Co-Rights Agent. To the extent that any
Co-Rights Agent takes any action pursuant to this Agreement, such
Co-Rights Agent shall be entitled to all of the rights and protections
of, and subject to all of the applicable duties and obligations
imposed upon, the Rights Agent pursuant to the terms of this
Agreement.
Section 3. Issue of Right Certificates.
(a) Until the Distribution Date, (i) subject to the provisions of
Section 3(b), the Rights shall be evidenced by the certificates
representing Common Shares registered in the names of the record
holders thereof (which certificates representing Common Shares
shall also be deemed to be Right Certificates), together with a copy
of the Summary of Rights, and not by separate certificates, (ii) the
Rights shall be transferable only in connection with the transfer of
the underlying Common Shares (including a transfer to the
Company), and (iii) the surrender for transfer of any certificates
evidencing Common Shares in respect of which Rights have been
issued, with or without a copy of the Summary of Rights, shall also
constitute the transfer of the Rights associated with the Common
Shares evidenced by such certificates.
(b) Within 90 days following the execution of this Agreement,
the Company shall send a copy of the Summary of Rights by first-
class, postage prepaid mail, to each record holder of Common
Shares, at the address of such holder shown on the records of the
Company.
(c) Rights shall, without any further action, be issued by the
Company in respect of all Common Shares (other than Common
Shares issued upon the exercise or exchange of any Right) issued
or delivered by the Company (whether originally issued or delivered
from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date and the Expiration Date. Certificates
issued after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date, evidencing such Common
Shares shall have stamped on, impressed on, printed on, written on
or otherwise affixed to them the following legend or such similar
legend as the Company may deem appropriate and as is not
inconsistent with the provisions of this Agreement, or as may be
required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of
any stock exchange or transaction reporting system on which the
Common Shares may from time to time be listed or quoted, or to
conform to usage:
This Certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights Agreement
between Research Frontiers Incorporated (the
"Company") and Continental Stock Transfer & Trust
Company, dated February 18, 2003 (the "Rights
Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights may be redeemed, may be exchanged, may
expire, may be amended or may be evidenced by
separate certificates and no longer be evidenced by this
Certificate. The Company will mail to the holder of this
Certificate a copy of the Rights Agreement, as in effect on
the date of mailing, without charge promptly after receipt
of a written request therefor. Under certain circumstances
as set forth in the Rights Agreement, Rights issued to, or
held by, any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate of an Acquiring
Person (as such terms are defined in the Rights
Agreement), whether then currently held by or on behalf
of such Person or by any subsequent holder, may
become null and void.
(d) As promptly as practicable after the Distribution Date, the
Company shall prepare and execute, the Rights Agent will
countersign and the Company shall send or cause to be sent (and
the Rights Agent shall, if requested, send), by first-class, insured,
postage prepaid mail, to each record holder of Common Shares as
of the Close of Business on the Distribution Date, at the address of
such holder shown on the records of the Company, one or more
Right Certificates, evidencing one Right for each Common Share so
held, subject to adjustment. In the event that an adjustment in the
number of Rights per Common Share has been made pursuant to
Section 11(i) hereof, at the time of distribution of the Right
Certificates, the Company may make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so
that Right Certificates representing only whole numbers of Rights
are distributed and cash is paid in lieu of any fractional Rights. As
of and after the Distribution Date, the Rights shall be evidenced
solely by such Right Certificates.
Section 4. Form of Right Certificates.
(a) The Right Certificates (and the form of election to
purchase and form of assignment to be printed on the reverse
thereof) shall be substantially in the form set forth as Exhibit A
hereto with such changes, marks of identification or designation and
such legends, summaries or endorsements printed thereon as the
Company may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or
transaction reporting system on which the Rights may from time to
time be listed or quoted, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Right
Certificates, whenever distributed, shall be dated as of the Record
Date and shall, on their face, entitle the holders thereof to purchase
such number of Common Shares as shall be set forth therein at the
Purchase Price set forth therein, but the Purchase Price, the number
and kind of securities issuable upon exercise of each Right and the
number of Rights outstanding shall be subject to adjustment as
provided herein.
(b) Any Right Certificate issued pursuant hereto that
represents Rights beneficially owned by a Designated Holder shall
contain (to the extent feasible) the following legend:
"The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was or became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person (as such
terms are defined in the Rights Agreement). Accordingly, this Right
Certificate and the Rights represented hereby may become null and
void in the circumstances specified in Section 7(d) of such
Agreement."
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, President or any Vice
President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof which shall
be attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent
and shall not be valid for any purpose unless so countersigned. In
case any officer of the Company who shall have signed any of the
Right Certificates shall cease to be such officer of the Company
before countersignature by the Rights Agent and issuance and
delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent, and issued and delivered by
the Company with the same force and effect as though the person
who signed such Right Certificates had not ceased to be such officer
of the Company; and any Right Certificate may be signed on behalf
of the Company by any person who, at the actual date of the
execution of such Right Certificate, shall be a proper officer of the
Company to sign such Right Certificate, although at the date of the
execution of this Rights Agreement any such person was not such
an officer.
(b) Following the Distribution Date, the Rights Agent shall
keep or cause to be kept, at the principal office of the Rights Agent
designated for such purpose and at such other offices as may be
required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of
any stock exchange or any transaction reporting system on which
the Rights may from time to time be listed or quoted, books for
registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on
its face by each of the Right Certificates and the date of each of the
Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange
of Right Certificates; Mutilated, Destroyed, Lost or Stolen Right
Certificates.
(a) Subject to the provisions of Sections 4(b), 7(d) and 14
hereof, at any time after the Close of Business on the Distribution
Date and prior to the Expiration Date, any Right Certificate or Right
Certificates representing exercisable Rights may be transferred, split
up, combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number
of Common Shares (or other securities, as the case may be) as the
Right Certificate or Right Certificates surrendered then entitled such
holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange
any such Right Certificate shall make such request in writing
delivered to the Rights Agent, and shall surrender the Right
Certificate or Right Certificates to be transferred, split up, combined
or exchanged at the principal office of the Rights Agent designated
for such purpose. Thereupon or as promptly as practicable
thereafter, subject to the provisions of Sections 4(b), 7(d) and 14
hereof, the Company shall prepare, execute and deliver to the
Rights Agent, and the Rights Agent shall countersign and deliver a
Right Certificate or Right Certificates, as the case may be, as so
requested. Notwithstanding the foregoing, neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever
with respect to the transfer, split up, combination or exchange of any
such surrendered Right Certificate until the registered holder shall
have completed and executed the certificate set forth in the form of
assignment on the reverse side of such Right Certificate and shall
have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall have reasonably
requested. The Company may require payment of a sum sufficient
to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of
Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory
to them, and reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender
to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company shall prepare, execute and deliver a new
Right Certificate of like tenor to the Rights Agent and the Rights
Agent shall countersign and deliver such new Right Certificate to the
registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution
Date and prior to the Expiration Date, upon surrender of the Right
Certificate, with the form of election to purchase and related
certificate on the reverse side thereof duly executed, to the Rights
Agent at the office or offices of the Rights Agent designated for such
purpose, together with payment in cash, by certified check or bank
draft in lawful money of the United States of America payable to the
order of the Company equal to the sum of (i) the Purchase Price for
the total number of securities as to which such surrendered Rights
are exercised and (ii) an amount equal to any applicable transfer tax
required to be paid by the holder of such Right Certificate in
accordance with the provisions of Section 9(d) hereof.
(b) Upon receipt of a Right Certificate representing
exercisable Rights with the form of election to purchase and the
certificate duly executed, accompanied by payment as described
above, the Rights Agent shall, subject to Section 20(k) hereof,
promptly (i) requisition from any transfer agent of the Common
Shares (or make available, if the Rights Agent is the transfer agent)
certificates representing the number of Common Shares to be
purchased (and the Company hereby irrevocably authorizes and
directs its transfer agent to comply with all such requests), (ii) when
appropriate, requisition from the Company the amount of cash, debt
securities or other assets to be paid in lieu of the issuance of
fractional shares in accordance with the provisions of Section 14
hereof, and (iii) after receipt thereof, cause the same to be delivered
to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated
by such holder. In the event that the Company is obligated to issue
other securities of the Company, pay cash and/or distribute other
property pursuant to Section 11 hereof, the Company will make all
arrangements necessary so that such other securities, cash and/or
other property are available for distribution by, and are distributed
by, the Rights Agent, if and when appropriate.
(c) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, the Company
shall prepare, execute and deliver a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised and the
Rights Agent shall countersign and deliver such new Right
Certificate to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14
hereof.
(d) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Flip-in Event, any
Rights beneficially owned by a Designated Holder shall be null and
void without any further action, and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to ensure that the provisions of this
Section 7(d) and Section 4(b) hereof are complied with, but shall
have no liability to any holder of Rights or any other Person as a
result of its failure to make any determination under this Section 7(d)
or such Section 4(b) with respect to a Designated Holder.
(e) Notwithstanding anything in this Section 7 to the contrary,
neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to any purported exercise of a
Right Certificate as set forth in this Section 7 unless the registered
holder of such Right Certificate shall have (i) completed and signed
the certificate following the form of election to purchase set forth on
the reverse side of the Right Certificate surrendered for such
exercise, and (ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall have reasonably
requested.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its stock transfer agents,
be delivered to the Rights Agent for cancellation or in cancelled
form, or, if surrendered to the Rights Agent, shall be cancelled by it,
and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate
purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all cancelled Right
Certificates to the Company, or shall, at the written request of the
Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Company Covenants Concerning Securities and
Rights. The Company covenants and agrees that:
(a) It shall at all times prior to the Expiration Date cause to be
reserved and kept available, out of its authorized and unissued
Common Shares or out of the Common Shares held in its treasury,
a number of Common Shares that, as provided in this Agreement,
will be sufficient to permit the exercise in full of all outstanding
Rights. Upon the occurrence of any events resulting in an increase
in the aggregate number of Common Shares of the Company
issuable upon exercise of all outstanding Rights above the number
then reserved, the Company shall make appropriate increases in the
number of shares so reserved.
(b) If the Common Shares issuable upon the exercise of the
Rights may be quoted on any national securities exchange, the
Company shall, during the period from the Distribution Date through
the Expiration Date, endeavor to cause all securities reserved for
issuance upon the exercise of Rights to be quoted on such
exchange upon official notice of issuance.
(c) It shall take all such action as may be necessary to ensure
that all Common Shares and/or other securities delivered upon
exercise of Rights, at the time of delivery of the certificates for such
securities shall be (subject to payment of the Purchase Price) duly
and validly authorized and issued, fully paid and nonassessable
securities.
(d) It shall pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of
the issuance or delivery of the Right Certificates and of any
certificates representing securities issued upon the exercise of
Rights; provided, however, that the Company shall not be required
to pay any transfer tax or charge which may be payable in respect
of any transfer or delivery of Right Certificates to a person other
than, or the issuance or delivery of certificates representing
securities issued upon the exercise of Rights in a name other than
that of, the registered holder of the Right Certificate surrendered for
exercise. The Company shall not be required to issue or deliver any
certificates representing securities issued upon the exercise of any
Rights to, or in a name other than that of, the registered holder until
any such tax or charge shall have been paid (any such tax or charge
being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's
reasonable satisfaction that no such tax is due.
(e) It shall use its best efforts (i) to file on an appropriate form,
as soon as practicable following the first occurrence of a Flip-in
Event and a determination by the Company in accordance with
Section 11(a)(iii) hereof of the consideration to be delivered by the
Company upon the exercise of the Rights, a registration statement
under the Securities Act with respect to the securities issuable upon
exercise of the Rights, (ii) to cause such registration statement to
become effective as soon as practicable after such filing, and (iii) to
cause such registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Securities
Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities and (B) the Expiration Date.
The Company shall also take such action as may be appropriate
under, or to ensure compliance with, the securities or "blue sky" laws
of the various states in connection with the exercisability of the
Rights. The Company may temporarily suspend, for a period of time
after the date set forth in clause (i) of the first sentence of this
Section 9(e), the exercisability of the Rights in order to prepare and
file such registration statement and to permit it to become effective.
Upon the commencement and termination of any such suspension,
the Company shall issue a public announcement of such event.
Notwithstanding anything in this Agreement to the contrary, the
Rights shall not be exercisable in any jurisdiction if the requisite
registration or qualification in such jurisdiction shall not have been
effected or the exercise of the Rights shall not be permitted under
applicable law.
Section 10. Record Date. Each Person in whose name any
certificate representing Common Shares is issued upon the exercise
of Rights shall for all purposes be deemed to have become the
holder of record of the Common Shares represented thereby on, and
such certificate shall be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered with the
form of election to purchase and related certificate on the reverse
side thereof duly executed and payment of the Purchase Price (and
all applicable transfer taxes) was made; provided, however, that if
the date of such surrender and payment is a date upon which the
Common Shares transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such
securities on, and such certificate shall be dated, the next
succeeding Business Day on which the Common Shares transfer
books of the Company are open; provided, further, that if delivery of
Common Shares is delayed pursuant to Section 9(d) hereof, such
Persons shall be deemed to have become the record holders of
such Common Shares only when such Common Shares first
become deliverable. Prior to the exercise of the Rights evidenced
thereby, the holder of a Right Certificate shall not be entitled to any
rights of a stockholder of the Company with respect to securities for
which the Rights shall be exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions or to
exercise any preemptive rights, and shall not be entitled to receive
any notice of any proceedings of the Company, except as provided
herein.
Section 11. Adjustment of Purchase Price, Number and
Kind of Securities or Number of Rights.
(a) The Purchase Price, the number and kind of securities
issuable upon exercise of each Right and the number of Rights
outstanding are subject to adjustment from time to time as provided
in this Section 11.
(i) In the event that the Company shall at any time after
the date of this Agreement (A) declare a dividend on the
Common Shares payable in Common Shares, (B) subdivide
the outstanding Common Shares, (C) combine the outstanding
Common Shares into a smaller number of shares, or (D) issue
any shares of its capital stock in a reclassification of the
Common Shares (including any such reclassification in
connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) or in Section 7(d)
hereof, the Purchase Price in effect at the time of the record
date for such dividend or of the effective date of such
subdivision, combination or reclassification, and/or the number
and/or kind of shares of capital stock issuable on such date
upon exercise of a Right, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be
entitled to receive upon payment of the Purchase Price then in
effect the aggregate number and kind of shares of capital stock
which, if such Right had been exercised immediately prior to
such date, the holder of such Right would have owned upon
such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an
event occurs which would require an adjustment under both
this Section 11(a)(i) and Section 11(a)(ii) hereof or Section 13
hereof, the adjustment provided for in this Section 11(a)(i) shall
be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) or Section 13 hereof.
(ii) Subject to the provisions of Section 27 hereof, in the
event that:
(A) any Acquiring Person or any Affiliate or
Associate of any Acquiring Person, at any time after the
date of this Agreement, directly or indirectly, (1) shall
merge into the Company or otherwise combine with the
Company and the Company shall be the continuing or
surviving corporation of such merger or combination
(other than in a transaction subject to Section 13 hereof)
and Company's Common Shares shall remain
outstanding and unchanged, (2) shall, in one transaction
or a series of transactions, transfer any assets to the
Company or to any of its Subsidiaries in exchange (in
whole or in part) for Common Shares of the Company, for
other equity securities of the Company or any such
Subsidiary, or for securities exercisable for or convertible
into shares of equity securities of the Company or any of
its Subsidiaries (whether Common Shares or otherwise)
or otherwise obtain from the Company or any of its
Subsidiaries, with or without consideration, any additional
shares of such equity securities or securities exercisable
for or convertible into such equity securities (other than
pursuant to a pro rata distribution to all holders of
Common Shares of the Company), (3) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of, in one transaction or a
series of transactions, to, from or with (as the case may
be) the Company or any of its Subsidiaries or any
employee benefit or stock ownership plan of the
Company or any of its Subsidiaries or any Person holding
Common Shares pursuant to the terms of such plan or for
the purpose of funding such plan or funding other
employee benefits for employees of the Company or any
Subsidiary, assets (including securities) on terms and
conditions less favorable to the Company or such
Subsidiary or plan than those that could have been
obtained in arm's length negotiations with an unaffiliated
third party, other than pursuant to a transaction set forth
in Section 13(a) hereof, (4) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise
acquire or dispose of, in one transaction or a series of
transactions, to, from or with the Company or any of the
Company's Subsidiaries or any employee benefit or stock
ownership plan of the Company or any of its Subsidiaries
or any Person holding Common Shares pursuant to the
terms of such plan or for the purpose of funding any such
plan or funding other employee benefits for employees of
the Company or any Subsidiary (other than transactions,
if any, consistent with those engaged in, as of the date
hereof, by the Company and such Acquiring Person or
such Associate or Affiliate), assets (including securities)
having an aggregate fair market value of more than
$50,000,000, other than pursuant to a transaction set
forth in Section 13(a) hereof, (5) shall sell, purchase,
lease, exchange, mortgage, pledge, transfer or otherwise
acquire or dispose of, in one transaction or a series of
transactions, to, from or with the Company or any of its
Subsidiaries or any employee benefit or stock ownership
plan of the Company or any of its Subsidiaries or any
Person holding Common Shares pursuant to the terms of
such plan or for the purpose of funding any such plan or
funding other employee benefits for employees of the
Company or any Subsidiary, any material patent,
trademark or service xxxx, other than pursuant to a
transaction set forth in Section 13(a) hereof, (6) shall
receive, or any designee, agent or representative of such
Acquiring Person or any Affiliate or Associate of such
Acquiring Person shall receive, any compensation from
the Company or any of its Subsidiaries other than
compensation for full-time employment as a regular
employee at rates in accordance with the Company's (or
its Subsidiaries') past practices, (7) shall receive the
benefit, directly or indirectly (except proportionately as a
holder of Common Shares or as required by law or
governmental regulation), of any loans, advances,
guarantees, pledges or other financial assistance or any
tax credits or other tax advantage provided by the
Company or any of its Subsidiaries or any employee
benefit or stock ownership plan of the Company or any of
its Subsidiaries or any Person holding Common Shares
pursuant to the terms of such plan or for the purpose of
funding any such plan or funding other employee benefits
for employees of the Company or any Subsidiary; or
(B) any Person shall at any time after date of this
Agreement, become an Acquiring Person (other than
pursuant to any transaction set forth in Section 13 (a)
hereof) and shall remain an Acquiring Person as of the
Share Acquisition Date with respect to such Person; or
(C) during such time as there is an Acquiring
Person, there shall be any reclassification of securities
(including any reverse stock split), or recapitalization of
the Company, or any merger or consolidation of the
Company with any of its Subsidiaries or any other
transaction or series of transactions involving the
Company or any of its Subsidiaries, other than a
transaction or transactions to which the provisions of
Section 13(a) apply (whether or not with or into or
otherwise involving an Acquiring Person), which has the
effect, directly or indirectly, of increasing by more than 1%
the proportionate share of the outstanding shares of any
class of equity securities of the Company or any of its
Subsidiaries which is directly or indirectly beneficially
owned by any Acquiring Person or any Associate or
Affiliate of any Acquiring Person;
then, and in each such case, immediately upon the occurrence of
the Flip-in Event, proper provision shall be made so that each holder
of a Right, except as provided in Section 7(d) hereof, shall thereafter
have a right to receive, upon exercise thereof in accordance with the
terms of this Agreement at the then current Purchase Price
multiplied by the number of Common Shares for which a Right was
exercisable immediately prior to the first occurrence of a Flip-in
Event (the "Flip-in Aggregate Purchase Price"), such number of
Common Shares (the "Adjustment Shares") as shall equal the result
obtained by dividing the Flip-in Aggregate Purchase Price by 50%
of the current per share market price of the Common Shares
(determined pursuant to Section 11(d) hereof) on the date of the first
occurrence of a Flip-in Event.
(iii) In the event that the number of Common Shares
which are authorized by the Company's Certificate of
Incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this Section
11(a), the Company's Board of Directors shall (A) determine
the excess of (x) the value of the Adjustment Shares issuable
upon the exercise of a Right (the "Current Value") over (y) the
Flip-in Aggregate Purchase Price (such excess being the
"Spread"), and (B) with respect to each Right, make adequate
provision to substitute for such Adjustment Shares, upon
payment of the applicable Flip-in Aggregate Purchase Price, in
the sole discretion of the Company's Board of Directors, (1)
cash, (2) a reduction in the Flip-in Aggregate Purchase Price,
(3) Common Shares of the Company or other equity securities
of the Company (including, without limitation, shares, or units
of shares, of preferred stock (such other shares being
"Common Share Equivalents")), other than equity securities
which would have the effect of nullifying, restricting or
disparately reducing the per share voting rights of holders of
the Common Shares to the extent the issuance of such equity
securities would result in the national securities exchange or
quotation system on which the Common Shares are principally
traded being prohibited under applicable law from listing or
continuing to list or from authorizing for or continuing quotation
and/or transactional reporting of the Common Shares or other
equity securities of the Company, (4) debt securities of the
Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by
the Company's Board of Directors, after receiving advice from
a nationally recognized investment banking firm; provided,
however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within
ninety calendar days following the later of (x) the first
occurrence of a Flip-in Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein as the
"Flip-in Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without
requiring payment of the Flip-in Aggregate Purchase Price,
Common Shares (to the extent available) and then, if
necessary, cash, which Common Shares and/or cash shall
have an aggregate value equal to the Spread. To the extent
that the Company determines that some action needs to be
taken pursuant to the first sentence of this Section 11(a)(iii), the
Company shall provide, subject to Section 7(d) hereof, that
such action shall apply uniformly to all outstanding Rights. For
purposes of this Section 11(a)(iii), the value of a Common
Share shall be the current per share market price (as
determined pursuant to Section 11(d) hereof) for a Common
Share on the Flip-in Trigger Date and the value of any
Common Share Equivalents shall be deemed to have the same
value as the Common Shares on such date.
(b) In the event that the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of Common
Shares entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Common
Shares (or securities having equivalent rights, privileges and
preferences as the Common Shares (for purposes of this Section
11(b), "equivalent common shares")) or securities convertible into
Common Shares or equivalent common shares at a price per
Common Share or equivalent common share (or having a
conversion price per share, if a security convertible into Common
Shares or equivalent common shares) less than the current per
share market price of the Common Shares (determined pursuant to
Section 11(d) hereof) on such record date, the Purchase Price to be
in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by
a fraction, the numerator of which shall be the number of Common
Shares outstanding on such record date plus the number of
Common Shares which the aggregate offering price of the total
number of Common Shares and/or equivalent common shares so to
be offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such
current per share market price and the denominator of which shall
be the number of Common Shares outstanding on such record date
plus the number of additional Common Shares and/or equivalent
common shares to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially
convertible). In case such subscription price may be paid in a
consideration part or all of which shall be in a form other than cash,
the value of such consideration shall be as determined in good faith
by the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent and the holders of the Rights.
Common Shares owned by or held for the account of the Company
shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such
rights, options or warrants are not so issued, the Purchase Price
shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In the event that the Company shall fix a record date for
the making of a distribution to all holders of Common Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness, cash (other
than a regular periodic cash dividends out of earnings or retained
earnings of the Company), assets, stock (other than a dividend
payable in Common Shares) or subscription rights, options or
warrants (excluding those referred to in Section 11(b) hereof), the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall
be the current per share market price of the Common Shares (as
determined pursuant to Section 11(d) hereof) on such record date
or, if earlier, the date on which Common Shares begin to trade on an
ex-dividend or when-issued basis for such distribution, less the fair
market value (as determined in good faith by the Board of Directors
of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding upon the
Rights Agent and the holder of the Rights) of the portion of the
evidences of indebtedness, cash, assets or stock so to be
distributed or of such subscription rights, options or warrants
applicable to one Common Share, and the denominator of which
shall be such current per share market price of the Common Shares
(as determined pursuant to Section 11(d) hereof). Such adjustments
shall be made successively whenever such a record date is fixed;
and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would
then be in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, the
"current per share market price" of Common Shares on any date
shall be deemed to be the average of the daily closing prices per
share of such Common Shares for the ten consecutive Trading Days
immediately prior to such date; provided, however, that in the event
that the current per share market price of the Common Shares is
determined during a period following the announcement by the
issuer of such Common Shares of (i) a dividend or distribution on
such Common Shares payable in such Common Shares or
securities convertible into such Common Shares (other than the
Rights) or (ii) any subdivision, combination or reclassification of such
Common Shares, and prior to the expiration of the tenth Trading Day
after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification,
then, and in each such case, the current per share market price shall
be appropriately adjusted to take into account such event. The
closing price for each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities
exchange on which the Common Shares are listed or admitted to
trading or, if the Common Shares are not listed or admitted to
trading on any national securities exchange, the last quoted sale
price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or
such other system then in use, or, if on any such date the Common
Shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market
maker making a market in the Common Shares selected by the
Board of Directors of the Company. If the Common Shares are not
publicly held or not so listed or traded, or not the subject of available
bid and asked quotes, "current per share market price" shall mean
the fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for
all purposes.
(e) Except as set forth below, no adjustment in the Purchase
Price shall be required unless such adjustment would require an
increase or decrease of at least 1% in the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest one
ten-thousandth of a Common Share or other security, as the case
may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than
the earlier of (i) three years from the date of the transaction which
requires such adjustment and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall
become entitled to receive any securities of the Company other than
Common Shares, thereafter the number of such other securities so
receivable upon exercise of any Right shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Common Shares
contained in this Section 11, and the provisions of Sections 7, 9, 10,
13 and 14 hereof with respect to the Common Shares shall apply on
like terms to any such other securities.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price, the
number of Common Shares (or other securities or amount of cash
or combination thereof) issuable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the
Purchase Price as a result of the calculations made in Section 11(b)
and Section 11(c) hereof, each Right outstanding immediately prior
to the making of such adjustment shall thereafter evidence the right
to purchase, at the adjusted Purchase Price, that number of
Common Shares (calculated to the nearest one ten-thousandth a
Common Share) obtained by (i) multiplying (x) the number of
Common Shares issuable upon exercise of a Right immediately prior
to this adjustment by (y) the Purchase Price in effect immediately
prior to such adjustment of the Purchase Price, and (ii) dividing the
product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect, on or after the date of any
adjustment of the Purchase Price, to adjust the number of Rights in
substitution for any adjustment in the number of Common Shares
issuable upon the exercise of a Right. Each of the Rights
outstanding after such adjustment of the number of Rights shall be
exercisable for the number of Common Shares for which a Right
was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights shall
become that number of Rights (calculated to the nearest one ten-
thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement
of its election to adjust the number of Rights, indicating the record
date for the adjustment, and, if known at the time, the amount of the
adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 calendar days
later than the date of the public announcement. If Right Certificates
have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of Right
Certificates on such record date Right Certificates evidencing,
subject to the provisions of Section 14 hereof, the additional Rights
to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement
for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company,
new Right Certificates evidencing all the Rights to which such
holders shall be entitled after such adjustment. Right Certificates so
to be distributed shall be issued, executed and countersigned in the
manner provided for herein (and may bear, at the option of the
Company, the adjusted Purchase Price) and shall be registered in
the names of the holders of record of Right Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number or kind of securities issuable upon the exercise
of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price and the number and
kind of securities which were expressed in the initial Right
Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the
Common Shares or other securities issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in
the opinion of its counsel, be necessary or appropriate in order that
the Company may validly and legally issue fully paid and
nonassessable Common Shares or such other securities at such
adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date the number of Common Shares or
other securities of the Company, if any, issuable upon such exercise
over and above the number of Common Shares or other securities
of the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or
other appropriate instrument evidencing such holder's right to
receive such additional Common Shares or other securities upon the
occurrence of the event requiring such adjustment.
(m) Notwithstanding anything in this Section 11 to the
contrary, the Company shall be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in its good faith
judgment the Board of Directors of the Company shall determine to
be advisable in order that any (i) consolidation or subdivision of the
Common Shares, (ii) issuance wholly for cash of Common Shares
at less than the current per share market price therefor, (iii) issuance
wholly for cash of Common Shares or securities which by their terms
are convertible into or exchangeable for Common Shares, (iv) stock
dividends, or (v) issuance of rights, options or warrants referred to
in this Section 11, hereafter made by the Company to holders of its
Common Shares shall not be taxable to such stockholders.
(n) The Company shall not, at any time after the Distribution
Date, (i) consolidate with any other Person (other than a Subsidiary
of the Company in a transaction which is not prohibited by Section
11(o) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which is not prohibited
by Section 11(o) hereof), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series of
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any other Person or Persons (other than the
Company and/or any of its Subsidiaries in one or more transactions
each of which is not prohibited by Section 11(o) hereof), if (x) at the
time of or immediately after such consolidation, merger or sale there
are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to be afforded
by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the Person which constitutes, or
would constitute, the "Issuer" for purposes of Section 13(a) hereof
shall have distributed or otherwise transferred to its shareholders, or
other persons holding an equity interest in such Person, Rights
previously owned by such Person or any of its Affiliates and
Associates; provided, however, this Section 11(n) shall not affect the
ability of any Subsidiary of the Company to consolidate with, merge
with or into, or sell or transfer assets or earning power to, any other
Subsidiary of the Company.
(o) After the Distribution Date, the Company shall not, except
as permitted by Section 23 or Section 26 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the
Rights.
Section 12. Certificate of Adjusted Purchase Price or
Number of Securities. Whenever an adjustment is made as provided
in Section 11 or Section 13 hereof, the Company shall promptly (a)
prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b) file with
the Rights Agent and with each transfer agent for the Common
Shares, a copy of such certificate, and (c) mail a brief summary of
such adjustment to each holder of a Right Certificate (or, if such
adjustment is made prior to the Distribution Date, to each holder of
a certificate evidencing Common Shares) in accordance with
Section 25 hereof. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of any such
adjustment unless and until it shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, following the Share Acquisition Date,
directly or indirectly:
(i) the Company shall consolidate with, or merge with
or into, any other Person (other than a Subsidiary of the
Company in a transaction which is not prohibited by Section
11(o) hereof) and the Company shall not be the continuing or
surviving corporation of such consolidation or merger; or
(ii) any Person (other than a Subsidiary of the Company
in a transaction which is not prohibited by Section 11(o)) hereof
shall consolidate with or merge with or into the Company and
the Company shall be the continuing or surviving corporation
of such merger or consolidation and, in connection with such
merger or consolidation, all or part of the Common Shares shall
be changed into or exchanged for stock or other securities of
any other Person or cash or any other property; or
(iii) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), to
any Person or Persons (other than the Company or any of its
Subsidiaries in one or more transactions each of which is not
prohibited by Section 11(o) hereof) in one or more transactions,
assets or earning power (including, without limitation, securities
creating any obligation on the part of the Company and/or any
of its Subsidiaries) representing in the aggregate more than
50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole),
then, and in each such case, proper provision shall be made so that
(A) each holder of a Right (except as otherwise provided herein)
shall thereafter have the right to receive, upon the exercise thereof
in accordance with the terms of this Agreement at the then current
Purchase Price, multiplied by the number of Common Shares for
which a Right was exercisable immediately prior to the first
occurrence of a Triggering Event, such number of validly authorized
and issued, fully paid, nonassessable and freely tradeable Common
Shares of the Issuer, free and clear of any liens, encumbrances and
other adverse claims and not subject to any rights of call or of first
refusal, as shall be equal to the result obtained by (x) multiplying the
then current Purchase Price by the number of Common Shares for
which a Right is exercisable immediately prior to the first occurrence
of a Flip-over Event (or, if a Flip-in Event has occurred prior to the
first occurrence of a Flip-over Event, by the number of Common
Shares for which a Right would be exercisable hereunder but for the
occurrence of such Flip-in Event) and dividing that product by (y)
50% of the current per share market price of the Common Shares of
the Issuer (determined pursuant to Section 11(d) hereof), on the
date of consummation of such Flip-over Event; (B) the Issuer shall
thereafter be liable for, and shall assume, by virtue of the
consummation of such Flip-over Event, all the obligations and duties
of the Company pursuant to this Agreement; (C) the term
"Company" shall thereafter be deemed to refer to the Issuer; it being
specifically intended that the provisions of Section 11 hereof shall
apply only to such Issuer following the first occurrence of a Flip-over
Event; (D) the Issuer shall take such steps (including, without
limitation, the reservation of a sufficient number of its Common
Shares to permit the exercise of all outstanding Rights) in
connection with such consummation as may be necessary to ensure
that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be possible, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights; and (E) the
provisions of Section 11(a)(ii) hereof shall be of no further effect
following the first occurrence of any Flip-over Event. The provisions
of this Section 13 shall not apply to any Flip-over Event that was
approved by the Board of Directors prior to the consummation of
such Flip-over Event.
(b) For purposes of this Section 13, "Issuer shall mean (i) in
the case of any Flip-over Event described in Sections 13(a)(i) or (ii)
above, the Person that is the issuer of any securities into which the
Common Shares of the Company are converted in such merger or
consolidation, or, if there is more than one such Issuer, the Issuer of
securities that have the highest aggregate current per share market
price (determined pursuant to Section 11(d) hereof) and (B) if no
securities are so issued, the Person that is the other party to such
merger or consolidation, or, if there is more than one such Person,
the Person the securities of which have the highest aggregate
current per share market price (determined pursuant to Section
11(d) hereof), and (ii) in the case of any Flip-over Event described
in Section 13(a) (iii) above, the Person that is the party receiving the
greatest portion of the assets or earning power (including, without
limitation, securities creating any obligation on the part of the
Company and/or any of its Subsidiaries) transferred pursuant to
such transaction or transactions or, if each Person that is a party to
such transaction or transactions receives the same portion of the
assets or earning power transferred pursuant to such transaction or
transactions or if the Person receiving the largest portion of the
assets or earning power cannot be determined, whichever Person
the equity securities of which has the highest aggregate current per
share market price (determined pursuant to Section 11(d) hereof);
provided, however, that, in any such case, (A) if (1) no class of
equity security of such Person is, at the time of such merger,
consolidation or transaction, and has been continuously over the
preceding 12-month period, registered pursuant to Section 12 of the
Exchange Act, and (2) such Person is a Subsidiary, directly or
indirectly, of another Person, a class of equity security of which is
and has been so registered, the term "Issuer" shall mean such other
Person; and (B) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, a class of equity security of two
or more of which are and have been so registered, the term "Issuer"
shall mean whichever of such Persons is the issuer of the equity
security having the greatest aggregate market value.
Notwithstanding the foregoing, if the Issuer in any of the Flip-over
Events listed above is not a corporation or other entity having
outstanding equity securities, then, and in each such case, (x) if the
Issuer is directly or indirectly wholly owned by a corporation or other
entity having outstanding equity securities, then all references to
Common Shares of the Issuer shall be deemed to be references to
the Common Shares of the corporation or other entity having
outstanding equity securities which ultimately controls the Issuer,
and (y) if there is no such corporation or other entity having
outstanding equity securities, (I) proper provision shall be made so
that the Issuer shall create or otherwise make available for purposes
of the exercise of the Rights in accordance with the terms of this
Agreement, a kind or kinds of security or securities having a fair
market value at least equal to the economic value of the Common
Shares which each holder of a Right would have been entitled to
receive if the Issuer had been a corporation or other entity having
outstanding equity securities; and (II) all other provisions of this
Agreement shall apply to the Issuer of such securities as if such
securities were Common Shares.
(c) The Company shall not consummate any Flip-over Event,
unless the Issuer shall have a sufficient number of authorized
Common Shares which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance
with this Section 13 and unless prior to such consummation the
Company and the Issuer shall have executed and delivered to the
Rights Agent a supplemental agreement providing for the terms set
forth in subsections (a) and (b) of this Section 13 and further
providing that as promptly as practicable after the execution of such
supplemental agreement, the Issuer shall:
(i) prepare and file a registration statement under the
Securities Act, with respect to the Rights and the securities
issuable upon exercise of the Rights on an appropriate form,
and shall use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Securities Act) until the
Expiration Date;
(ii) take all such action as may be required or
appropriate to ensure that any acquisition of securities upon
the exercise of Rights complies with all applicable state
securities or "blue sky" laws; and
(iii) deliver to holders of the Rights historical financial
statements for the Issuer and each of its Affiliates which
comply in all respects with the requirements for registration on
Form 10 under the Exchange Act.
(d) In case the Issuer which is to be a party to a transaction
referred to in this Section 13 has a provision in any of its authorized
securities or in its Certificate of Incorporation or By-laws or other
instrument governing its corporate affairs, which provision would
have the effect of (i) causing such Issuer to issue, in connection
with, or as a consequence of, the consummation of a transaction
referred to in this Section 13, equity securities of such Issuer at less
than the then current per share market price (determined pursuant
to Section 11(d) hereof) or securities exercisable for, or convertible
into, equity securities of such Issuer at less than such then current
per share market price (other than to holders of Rights pursuant to
this Section 13) or (ii) providing for any special payment, tax or
similar provisions in connection with the issuance of the equity
securities of such Issuer pursuant to the provisions of this Section
13; then, in such event, the Company shall not consummate any
such transaction unless prior thereto the Company and such Issuer
shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question
shall have been cancelled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence
of, the consummation of the proposed transaction.
(e) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In
the event that a Flip-over Event occurs at any time after the
occurrence of a Flip-in Event, the Rights which have not theretofore
been exercised shall thereafter become exercisable only in the
manner described in Section 13(a) hereof.
Section 14. Fractional Rights and Fractional Securities.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, the Company shall pay as
promptly as practicable to the registered holders of the Right
Certificates with regard to which such fractional Rights otherwise
would be issuable, an amount in cash equal to the same fraction of
the current market value of a whole Right. For the purposes of this
Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to
the date on which such fractional Rights otherwise would have been
issuable. The closing price of the Rights for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way,
in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to
trading on any national securities exchange, the last quoted sale
price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or
such other system then in use or, if on any such date the Rights are
not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker
making a market in the Rights selected by the Board of Directors of
the Company. If on any such date no such market maker is making
a market in the Rights the fair value of the Rights on such date shall
be determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of Rights.
(b) The Company shall not be required to issue fractions of
Common Shares (or other securities) issuable upon exercise or
exchange of the Rights or to distribute certificates which evidence
any such fractional securities. In lieu of issuing any such fractional
Common Shares (or other securities), the Company may pay to any
Person to whom or which such fractional securities would otherwise
be issuable at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market
value of one such security on the Trading Day immediately prior to
the date of exercise (determined in accordance with Section 11(d)
hereof).
Section 15. Rights of Action. All rights of action in respect
of this Agreement, excepting the rights of action given to the Rights
Agent under Section 18 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares);
and any registered holder of any Right Certificate (and, prior to the
Distribution Date, of the Common Shares), without the consent of
the Rights Agent or of the holder of any other Right Certificate (and,
prior to the Distribution Date, of the holder of any Common Shares),
may in his own behalf and for his own benefit enforce, and may
institute and maintain any suit, action or proceeding against the
Company or any other Person to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right
Certificate or Common Share certificate in the manner provided in
such Right Certificate and in this Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is
specifically acknowledged that the registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares) would not have an adequate
remedy at law for any breach of this Agreement and shall be entitled
to specific performance of the obligations under this Agreement, and
injunctive relief against actual or threatened violations of the
obligations of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of
a Right by accepting the same consents and agrees with the
Company and the Rights Agent and with every other holder of a
Right that:
(a) Prior to the Distribution Date, the Rights shall be
transferable only in connection with the transfer of the Common
Shares;
(b) After the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates
duly executed;
(c) Subject to Sections 6(a) and Section 7(e), the Company
and the Rights Agent may deem and treat the person in whose
name the Right Certificate (or, prior to the Distribution Date, the
associated Common Share certificate) is registered as the absolute
owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Right Certificate or the
associated Common Share certificate made by anyone other than
the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be affected by any
notice to the contrary;
(d) Such holder expressly waives any right to receive any
fractional Rights or any fractional securities upon exercise or
exchange of a Right, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission,
or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; provided, however, that
the Company shall use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose the
holder of the Common Shares or any other securities of the
Company which may at any time be issuable upon the exercise of
the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of
any Right Certificate, as such, any of the rights of a stockholder of
the Company or any right to vote for the election of Directors or upon
any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice
of meetings or other actions affecting stockholders (except as
provided in Section 24 hereof), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced
by such Right Certificate shall have been exercised in accordance
with the provisions of this Agreement or exchanged pursuant to the
provisions of Section 27 hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder
and, from time to time, on demand of the Rights Agent, its
reasonable expenses and counsel fees and other disbursements
incurred in the administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Company
also agrees to indemnify the Rights Agent and its affiliates and each
of their directors, officers, employees and agents (collectively, the
"Indemnified Parties") for, and to hold the Indemnified Parties
harmless against, any damage, loss, liability, suit, action,
proceeding, cost or expense, incurred without gross negligence, bad
faith or willful misconduct on the part of the Indemnified Parties, for
anything done or omitted by the Indemnified Parties in connection
with the acceptance and administration of this Agreement, including
the costs and expenses of defending against any claim or demand
of liability arising therefrom. The provisions of this Section 18(a)
shall survive the expiration of the Rights and termination of this
Agreement.
(b) The Rights Agent and its Affiliates shall be protected and
shall incur no liability for or in respect of any action taken, suffered
or omitted by it in connection with its administration of this
Agreement in reliance upon any Right Certificate or certificate
evidencing Common Shares or other securities of the Company,
instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights
Agent under the provisions of Section 21 hereof. In case at the time
such successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of the predecessor Rights Agent
and deliver such Right Certificates so countersigned; and in case at
that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such
Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such
cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have
been countersigned but not delivered, the Rights Agent may adopt
the countersignature under its prior name and deliver Right
Certificates so countersigned; and in case at that time any of the
Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior
name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent
undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the
Company and the holders of Right Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to
the Rights Agent as to any action taken or omitted by it in good faith
and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the identify of
any Acquiring Person and the determination of "current per share
market price") be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be herein specifically prescribed)
may be deemed to be conclusively proved and established by a
certificate signed by any one of the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company
and delivered to the Rights Agent; and such certificate shall be full
authorization to the Rights Agent for any action taken or suffered in
good faith by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Right Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are
and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution and delivery hereof by the
Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Right Certificate; nor
shall it be responsible for any adjustment required under the
provisions of Section 11 or Section 13 hereof (including any
adjustment which results in Rights becoming void) or responsible for
the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such
adjustment (except with respect to the exercise of Rights evidenced
by Right Certificates after receipt by the Rights Agent of the
certificate describing any such adjustment as contemplated by
Section 12); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation
of any Common Shares or other securities to be issued pursuant to
this Agreement or any Right Certificate or as to whether any
Common Shares or other securities will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights Agent
of its duties under this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the
President, any Vice President, the Treasurer, any Assistant
Treasurer, the Secretary and any Assistant Secretary of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action
taken or suffered to be taken by it in good faith in accordance with
instructions of any such officer. Any application by the Rights Agent
for written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent under this Rights Agreement and the
date on and/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 such 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 any of the
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be
interested, or contract with or lend money to the Company or
otherwise act as fully and freely as though it were not Rights Agent
under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent shall not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any
loss to the Company resulting from any such act, default, neglect or
misconduct, provided reasonable care was exercised in the
selection and continued employment thereof. The Rights Agent shall
not be under any duty or responsibility to insure compliance with any
applicable federal or state securities laws in connection with the
issuance, transfer or exchange of Right Certificates.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties or in the exercise of its
rights hereunder if the Rights Agent shall have reasonable grounds
for believing that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise, transfer, split up, combination or
exchange, the certificate attached to the form of assignment or form
of election to purchase, as the case may be, has either not been
completed or indicates an affirmative response to clause 1 or 2
thereof, the Rights Agent shall not take any further action with
respect to such requested exercise, transfer, split up, combination
or exchange, without first consulting with the Company. If such
certificate has been completed and signed and shows a negative
response to clauses 1 and 2 of such certificate, unless previously
instructed otherwise in writing by the Company (which instructions
may impose on the Rights Agent additional ministerial
responsibilities, but no discretionary responsibilities), the Rights
Agent may assume without further inquiry that the Right Certificate
is not owned by a person described in Section 4(b) or Section 7(d)
hereof and shall not be charged with any knowledge to the contrary.
Section 21. Change of Rights Agent. The Rights Agent or
any successor Rights Agent may resign and be discharged from its
duties under this Agreement upon 30 calendar days' notice in writing
mailed to the Company and to each transfer agent of the Common
Shares by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon 30 calendar days' notice
in writing, mailed to the Rights Agent or successor Rights Agent, as
the case may be, and to each transfer agent of the Common Shares
by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the
Company shall appoint a successor to the Rights Agent. If the
Company shall fail to make such appointment within a period of 30
calendar days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning
or incapacitated Rights Agent or by the holder of a Right Certificate
(who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent,
whether appointed by the Company or by such a court, shall be (a)
a corporation organized and doing business under the laws of the
United States or any state of the United States in good standing,
shall be authorized to do business as a banking institution in the
State of New York, shall be authorized under such laws to exercise
corporate trust or stock transfer powers, shall be subject to
supervision or examination by federal or state authorities and shall
have at the time of its appointment as Rights Agent a combined
capital and surplus of at least $100,000,000 or (b) an Affiliate of a
corporation described in clause (a). After appointment, the
successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute
and deliver any further assurance, conveyance, act or deed
necessary for the purpose. Not later than the effective date of any
such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the
Common Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new
Right Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price per share and the number or kind of
securities issuable or property purchasable upon exercise of the
Rights made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale by the Company
of Common Shares following the Distribution Date and prior to the
Expiration Date, the Company (a) shall, with respect to Common
Shares so issued or sold pursuant to the exercise of stock options
or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereafter issued by the
Company, and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Right
Certificates representing the appropriate number of Rights in
connection with such issuance or sale; provided, however, that (i) no
such Right 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 Right Certificate would be
issued, and (ii) no such Right Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have been made
in lieu of the issuance thereof.
Section 23. Redemption.
(a) Subject to Section 30 hereof, the Board of Directors of the
Company may, at its option, at any time prior to the earlier of (i) the
Distribution Date or (ii) the Final Expiration Date, redeem all, but not
less than all, of the then outstanding Rights at the Redemption Price.
The Company may, at its option, pay the Redemption Price in cash,
in Common Shares (based on the "current per share market price",
as defined in Section 11(d) hereof, of the Common Shares at the
time of redemption) or in any other form of consideration deemed
appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights (evidence of
which shall be filed with the Rights Agent), and without any further
action and without any notice, the right to exercise the Rights shall
terminate and the only right thereafter of the holders of Rights shall
be to receive the Redemption Price for each Right so held. Promptly
after the action of its Board of Directors ordering the redemption of
the Rights, the Company shall give notice of such redemption to the
holders of the then outstanding Rights; provided, however, that the
failure to give, or any defect in, any such notice shall not affect the
validity of the redemption of the Rights. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. The notice of redemption mailed
to the holders of Rights shall state the method by which the payment
of the Redemption Price will be made.
Section 24. Notice of Certain Events.
(a) In case, after the Distribution Date, the Company shall
propose (i) to pay any dividend payable in stock of any class to the
holders of Common Shares or to make any other distribution to the
holders of Common Shares (other than a regular periodic cash
dividend out of earnings or retained earnings of the Company), (ii)
to offer to the holders of Common Shares rights, options or warrants
to subscribe for or to purchase any additional Common Shares or
shares of stock of any class or any other securities, rights or options,
(iii) to effect any reclassification of its Common Shares (other than
a reclassification involving only the subdivision of outstanding
Common Shares), (iv) to effect any consolidation or merger into or
with any other Person (other than a Subsidiary of the Company in a
transaction which is not prohibited by Section 11(o) hereof), or to
effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer) , in one or more
transactions, of assets or earning power (including, without
limitation, securities creating any obligation on the part of the
Company and/or any of its Subsidiaries) representing more than
50% of the assets and earning power of the Company and its
Subsidiaries, taken as a whole, to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or
more transactions each of which is not prohibited by Section 11(o)
hereof), or (v) to effect the liquidation, dissolution or winding up of
the Company, then, in each such case, the Company shall give to
each holder of a Right Certificate, to the extent feasible and in
accordance with Section 25 hereof, a notice of such proposed
action, which shall specify the record date for the purposes of such
stock dividend, distribution or offering of rights, options or warrants,
or the date on which such reclassification, consolidation, merger,
sale, transfer, liquidation, dissolution, or winding up is to take place
and the date of participation therein by the holders of the Common
Shares, if any such date is to be fixed, and such notice shall be so
given, in the case of any action covered by clause (i) or (ii) above,
at least 10 calendar days prior to the record date for determining
holders of the Common Shares for purposes of such action, and, in
the case of any such other action, at least 10 calendar days prior to
the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares,
whichever shall be the earlier; provided, however, no such notice
shall be required pursuant to this Section 24, if any Subsidiary of the
Company effects a consolidation or merger with or into, or effects a
sale or other transfer of assets or earnings power to, any other
Subsidiary of the Company.
(b) In case any Flip-in Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to
the Rights Agent and each holder of a Right Certificate, to the extent
feasible and in accordance with Section 25 hereof, a notice of the
occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights.
Section 25. Notices. All notices and other communications
provided for hereunder shall, unless otherwise stated herein, be in
writing and shall be sent by first-class mail, postage prepaid, or
delivered by hand, if to the Company, to its address at:
Research Frontiers Incorporated
000 Xxxxxxxxx Xxxx Xxxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: President
or to such other address as shall be specified to the Rights Agent by
like notice and if to the Rights Agent, to its address at:
Continental Stock Transfer & Trust Company
00 Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Compliance Department
or to such other address as shall be specified to the Company by
like notice.
Notices or demands authorized by this Agreement to be
given or made by the Company or the Rights Agent to the holder of
any Right Certificate (or, if prior to the Distribution Date, to the holder
of a certificate representing Common Shares) shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed
to such holder at the address of such holder as shown on the
registry books of the Company.
Section 26. Supplements and Amendments. Prior to the
Distribution Date and subject to the last two sentences of this
Section 26, the Company and the Rights Agent shall, if the
Company so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates
representing Common Shares. From and after the Distribution Date
and subject to the last two sentences of this Section 26, the
Company and the Rights Agent shall, if the Company so directs,
supplement or amend this Agreement without the approval of any
holders of Right Certificates in order (i) to cure any ambiguity, (ii) to
correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder, or (iv) to supplement
or amend the provisions hereunder in any manner which the
Company may deem desirable, including, without limitation, the
addition of other events requiring adjustment to the Rights under
Sections 11 or 13 hereof or procedures relating to the redemption of
the Rights, which supplement or amendment shall not, in the good
faith determination of the Board of Directors, adversely affect the
interests of the holders of Right Certificates (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person);
provided, however, this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A)
subject to Section 30 hereof, a time period relating to when the
Rights may be redeemed at such time as the Rights are not then
redeemable, or (B) any other time period unless such lengthening
is for the purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights. Upon the delivery of a
certificate from an officer of the Company which states that the
proposed supplement or amendment is in compliance with the terms
of this Section 26 and certification that the Board of Directors has
approved the supplement or amendment, the Rights Agent shall
execute such supplement or amendment; provided, however, that
the failure or refusal of the Rights Agent to execute such supplement
or amendment shall not affect the validity of any supplement or
amendment adopted by the Company, any of which shall be
effective in accordance with the terms thereof. Prior to the
Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holder of Common
Shares of the Company. Notwithstanding anything in this Agreement
to the contrary, no supplement or amendment shall be made which
changes the Redemption Price, the Purchase Price, the Final
Expiration Date or the number of Common Shares for which a Right
is exercisable without the approval of the Board of Directors.
Further, notwithstanding anything in this Agreement to the contrary,
no supplement or amendment that changes the rights and duties of
the Rights Agent under this Agreement will be effective against the
Rights Agent without the execution of such supplement or
amendment by the Rights Agent.
Section 27. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time after any Person becomes an Acquiring Person,
exchange all or part of the then-outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to
the provisions of Section 7(d) hereof) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio
being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be
empowered to effect such exchange at any time after any Person
(other than the Company, any Subsidiary of the Company, any
employee benefit or stock ownership plan of the Company or of any
Subsidiary of the Company, or any Person holding Common Shares
for or pursuant to the terms of any such plan or for the purpose of
funding any such plan or funding other employee benefits for
employees of the Company or of any Subsidiary or any current
executive officer (or his or her estate)), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50%
or more of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to
Section 27(a) hereof, and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only
right thereafter of the holder of such Rights shall be to receive that
number of Common Shares equal to the number of such Rights held
by such holder multiplied by the Exchange Ratio. Promptly after the
action of the Board of Directors of the Company ordering the
exchange of any Rights pursuant to Section 27(a) hereof, the
Company shall publicly announce such action and give notice of
such action to each holder of Rights; provided, however, that the
failure to give, or any defect in, such notice shall not affect the
validity of such exchange. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange shall state the
method by which the exchange of the Common Shares for Rights
will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of
Section 7(d)hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 27, the
Company, at its option, may substitute for any Common Share
exchangeable for a Right, (i) equivalent common shares (as such
term is used in Section 11(b) hereof), (ii) cash, (iii) debt securities of
the Company, (iv) other assets, or (v) any combination of the
foregoing, in any event having an aggregate value which the Board
of Directors of the Company shall have determined in good faith to
be equal to the current per share market price of one Common
Share (determined pursuant to Section 11(d) hereof) on the Trading
Day immediately preceding the date of exchange pursuant to this
Section 27.
Section 28. Successors; Certain Covenants. All the
covenants and provisions of this Agreement by or for the benefit of
the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered
holders of the Common Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares)
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way
be affected, impaired or invalidated; provided, however,
notwithstanding anything in this Agreement to the contrary, if any
such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that
severing the invalid language from this Agreement would adversely
affect the purpose or effect of this Agreement and the Rights shall
not then be redeemable, the right of redemption set forth in Section
23 hereof shall be reinstated and shall not expire until the Close of
Business on the tenth Business Day following the date of such
determination by the Board of Directors of the Company.
Section 31. Determinations and Actions by the Board of
Directors, etc. For all purposes of this Agreement, any calculation
of the number of Common Shares outstanding at any particular time,
including for purposes of determining the particular percentage of
such outstanding Common Shares of which any Person is the
Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act as in effect on the date hereof.
Except as otherwise specifically provided herein, the Board of
Directors shall have the exclusive power and authority to administer
this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors or to the Company, or as may be
necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power (i) to interpret the
provisions of this Agreement, and (ii) to 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 of Directors 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 or
any member thereof to any liability to the holders of the Rights.
Section 32. Governing Law. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made
under the internal substantive laws of the State of Delaware and for
all purposes shall be governed by and construed in accordance with
the internal substantive laws of such State applicable to contracts to
be made and performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed
in any number of counterparts, and by the different parties hereto in
separate counterparts, and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of
the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of
any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals
to be hereunto affixed and attested, all as of the day and year first
above written.
Attest: RESEARCH FRONTIERS INCORPORATED
By: /s/Xxxxxx X. Xxxxxx By:/s/ Xxxxxx X. Xxxx
Name: Xxxxxx X. Xxxxxx Name: Xxxxxx X. Xxxx
Title: Asst. Secretary Title: Chairman
Attest: CONTINENTAL STOCK TRANSFER & TRUST COMPANY
By: /s/ Xxxxxx Xxxxxxxx By:/s/ Xxxxxx X. Xxxxxx
Name: Xxxxxx Xxxxxxxx Name: Xxxxxx X. Xxxxxx
Title: Asst. Secretary Title: Chairman of the Board and President
EXHIBIT A
[Form of Right Certificate]
Certificate No. ____________ Rights
NOT EXERCISABLE AFTER THE
EXPIRATION DATE (AS DEFINED IN THE
RIGHTS AGREEMENT REFERRED TO
BELOW). THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN
THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES (SPECIFIED IN
THE RIGHTS AGREEMENT), RIGHTS
BENEFICIALLY OWNED BY ACQUIRING
PERSONS (AS DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHT
CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO
WAS OR BECAME AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS
ARE DEFINED IN THE RIGHTS AGREEMENT
REFERRED TO BELOW). ACCORDINGLY,
THIS RIGHT CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION
7(d) OF THE RIGHTS AGREEMENT.]
Right Certificate
RESEARCH FRONTIERS INCORPORATED
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 and
conditions of the Rights Agreement dated as of February 18, 2003
(the "Rights Agreement"; terms defined therein are used herein with
the same meaning unless otherwise defined herein) between
Research Frontiers Incorporated, a Delaware corporation (the
"Company"), and Continental Stock Transfer & Trust Company, a
corporation organized under the banking laws of the State of New
York, as Rights Agent (which term shall include any successor
Rights Agent under the Rights Agreement), to purchase from the
Company at any time after the Distribution Date and prior to the
Expiration Date at the office of the Rights Agent, one fully paid and
non-assessable share of Common Stock, par value $.0001 per
share, of the Company at the Purchase Price initially of $60 per
Common Share, upon presentation and surrender of this Right
Certificate with the form of election to purchase and related
certificate duly executed. The number of Rights evidenced by this
Right Certificate (and the number of Common Shares which may be
purchased upon exercise thereof) set forth above, and the Purchase
Price per Common Share set forth above shall be subject to
adjustment in certain events as provided in the Rights Agreement.
Upon the occurrence of a Flip-in Event, if the Rights
evidenced by this Right Certificate are beneficially owned by an
Acquiring Person or an Affiliate or Associate of any such Acquiring
Person or, under certain circumstances described in the Rights
Agreement, a transferee of any such Acquiring Person, Associate or
Affiliate, such Rights shall become null and void and no holder
hereof shall have any right with respect to such Rights from and
after the occurrence of such Flip-in Event.
In certain circumstances described in the Rights
Agreement, the rights evidenced hereby may entitle the registered
holder thereof to purchase capital stock of an entity other than the
Company or receive common stock, cash or other assets, all as
provided in the Rights Agreement.
This Right Certificate is subject to all of the terms and
conditions of the Rights Agreement, which terms and conditions are
hereby incorporated herein by reference and made a part hereof and
to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the
holders of the Right Certificates. Copies of the Rights Agreement
are on file at the principal office of the Company and are available
from the Company upon written request.
This Right Certificate, with or without other Right
Certificates, upon surrender at the office of the Rights Agent
designated for such purpose, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing an
aggregate number of Rights equal to the aggregate number of
Rights evidenced by the Right Certificate or Right Certificates
surrendered. If this Right Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof,
another Right Certificate or Right Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Right Certificate may be redeemed by the
Company under certain circumstances at its option at a redemption
price of $.0001 per Right, payable at the Company's option in cash,
Common Shares of the Company or in such other form of
consideration as shall be deemed appropriate by the Board of
Directors of the Company, subject to adjustment in certain events as
provided in the Rights Agreement.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Right Certificate may be exchanged by the
Company at an exchange ratio of one Common Share per Right,
subject to adjustment in certain events as provided in the Rights
Agreement.
The Company shall not be required to issue fractional
Common Shares upon the exercise of any Right or Rights evidenced
hereby, but in lieu thereof may make a cash payment, as provided
in the Rights Agreement.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose
the holder of Common Shares or of any other securities which may
at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a shareholder
of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive
notice of meetings or other actions affecting shareholders (except as
provided in the Rights Agreement), or to receive dividends or
subscription rights, until the Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights
Agreement.
The Rights Agreement may be amended or supplemented
by the Company as provided therein.
This Right 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.
Dated as of _____________, 2003.
ATTEST: RESEARCH FRONTIERS INCORPORATED
By ____________________ By ____________________
Name: Name:
Title: Title:
Countersigned:
CONTINENTAL STOCK TRANSFER
& TRUST COMPANY, as
Rights Agent
By ____________________
Authorized Officer
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the
Right Certificate.)
FOR VALUE RECEIVED
hereby sells, assigns and transfers unto
(Please print name and address of transferee)
this Right Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint
_______________________ Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full
power of substitution.
Dated: ________________, 20__
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being sold, assigned, transferred, split up, combined or
exchanged by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as
such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by
this Right Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: _________________, 20__ _____________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or
any change whatsoever.
In the event the certification set forth above is not completed,
the Company will deem the beneficial owner of the Rights evidenced
by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and, in the
case of an Assignment, will affix a legend to that effect on any Right
Certificates issued in exchange for this Right Certificate.
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Right Certificate.)
To: RESEARCH FRONTIERS INCORPORATED
The undersigned hereby irrevocably elects to exercise
________________________ Rights represented by this Right
Certificate to purchase the Common Shares issuable upon the
exercise of the Rights (or such other securities of the Company or
of any other person or other property which may be issuable upon
the exercise of the Rights) and requests that certificates for such
securities be issued in the name of and delivered to:
(Please print name and address)
Please insert social security
or other identifying
number:
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the balance of
such Rights shall be registered in the name of and delivered to:
(Please print name and address)
Please insert social security
or other identifying
number:
Dated: _____________, 20__
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was
an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: _____________, 20__
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of
this Right Certificate in every particular, without alteration or
enlargement or any change whatsoever.
In the event the certification set forth above is not completed,
the Company will deem the beneficial owner of the Rights evidenced
by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE COMMON STOCK
On February 18, 2003, the Board of Directors of Research
Frontiers Incorporated (the "Company") declared a dividend
distribution of one Right for each outstanding share of common
stock, par value $.0001 per share, of the Company (the "Common
Stock") to stockholders of record at the close of business on March
3, 2003. In addition, a Right will attach to each share of Common
Stock issued by the Company between that time and the time the
Rights become exercisable. Each Right entitles the registered
holder to purchase from the Company one share of Common Stock
at a price of $60 per share, subject to adjustment (the "Purchase
Price").
The terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Company and Continental Stock
Transfer & Trust Company, as Rights Agent. This Summary of
Rights to Purchase Common Stock does not purport to be complete
and should be read together with the Rights Agreement, a copy of
which may be obtained from the Company free of charge.
Initially, the Rights will be attached to all Common Stock
certificates representing shares then outstanding, and no separate
Right Certificates will be distributed. The Rights will separate from
the Common Stock and become exercisable upon the earlier to
occur of the following events (the "Distribution Date"):
(a) the close of business on the 10th business day (or such
later date as the Board shall determine) following the first
public announcement that a person or group of affiliated or
associated persons (subject to certain exceptions listed in the
Rights Agreement, an "Acquiring Person") has acquired, or
obtained the right to acquire, beneficial ownership of 15% or
more of the outstanding shares of Common Stock (the "Share
Acquisition Date"), or
(b) the close of business on the 10th business day (or such
later date as the Board shall determine) following the
commencement of a tender offer or exchange offer that would
result in a person or group beneficially owning 15% or more of
the outstanding shares of Common Stock.
Until the Distribution Date:
(a) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with the
Common Stock certificates,
(b) new Common Stock certificates issued after March 3,
2003 will contain a notation incorporating the Rights
Agreement by reference, and
(c) the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the
Rights associated with the Common Stock represented by
those certificates.
The Rights will expire at the close of business on
February 18, 2013, unless earlier redeemed or exchanged
by the Company as described below.
As promptly as practicable after the Distribution Date,
Right Certificates will be mailed to holders of record of the
Common Stock as of the close of business on the
Distribution Date. After the Distribution Date, the separate
Right Certificates alone will represent the Rights.
If:
(a) the Company is the surviving corporation in a merger with
an Acquiring Person and its Common Stock is not changed or
exchanged,
(b) any person becomes an Acquiring Person and remains
an Acquiring Person as of the Share Acquisition Date with
respect to such person,
(c) an Acquiring Person engages in one or more "self-
dealing" transactions as set forth in the Rights Agreements, or
(d) during such time as there is an Acquiring Person, an
event occurs which results in such Acquiring Person's
ownership interest being increased by more than 1% (e.g., by
means of a reverse stock split or recapitalization),
thereafter, each holder of a Right will have the right to receive,
upon exercise, Common Stock (or, in certain circumstances,
cash, property or other securities of the Company) having a
value equal to two times the Purchase Price. However, this will
not apply to Rights beneficially owned by and Acquiring
Person, whose rights will become null and void. In addition,
Rights will not be exercisable following the occurrence of any
of the events set forth above until such time as the Rights are
no longer redeemable by the Company as set forth below.
For example, at an exercise price of $60 per Right, each
Right not owned by an Acquiring Person following an event set
forth in the preceding paragraph would entitle its holder to
purchase $120 worth of Common Stock (or other consideration,
as noted above) for $60. Assuming that the Common Stock
had a per share market price of $10 at such time, the holder of
each valid Right would be entitled to purchase 12 shares of
Common Stock for $60.
If, following the Share Acquisition Date,
(a) the Company is acquired in a merger or other business
combination transaction in which the Company is not the
surviving corporation (other than a merger of the nature
descended above),
(b) any person consolidates or merges with the Company and
all or part of the Common Stock is converted or exchanged for
securities, cash or property of any other person, or
(c) 50% or more of the Company's assets or earning power
is sold or transferred,
each holder of a Right (except Rights which previously have
been voided as set forth above) shall thereafter have the right
to receive, upon exercise, common stock of the Acquiring
Person having a value equal to two times the exercise price of
the Right.
At any time after a person becomes an Acquiring Person
and as long as no person beneficially owns 50% or more of the
Common Stock the Company may exchange all or part of the
outstanding and exercisable Rights for shares of Common
Stock at an exchange ratio specified in the Rights Agreement.
The Purchase Price payable, and the number of shares
of Common Stock or other securities or property issuable, upon
exercise of the Rights are subject to adjustment from time to
time to prevent certain types of dilution. With certain
exceptions, no adjustment to the Purchase Price will be made
until cumulative adjustments amount to at least 1% of the
Purchase Price. The Company is not required to issue
fractional shares of Common Stock or Rights. In lieu thereof,
an adjustment in cash may be made based on the market price
of the Common Stock on the last trading date prior to the date
of exercise.
At any time prior to the Distribution Date, the Company
may redeem the Rights in whole, but not in part, at a price of
$.0001 per Right (payable in cash, Common Stock or other
consideration deemed appropriate by the Board of Directors).
Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the Rights will terminate and
the only right of the holders of Rights will be to receive the
redemption price.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
While the distribution of the Rights will not be taxable to
stockholders or to the Company, stockholders may, depending
upon the circumstances, recognize taxable income in the event
that the Rights become exercisable for Common Stock (or
other consideration) of the Company or for common stock of
the Acquiring Person as set forth above or in the event that the
Rights are redeemed or exchanged.
Prior to the Distribution Date, any of the provisions of the
Rights Agreement may be amended by the Board of Directors
of the Company without approval of the holders of the Common
Stock. After the Distribution Date, the provisions of the Rights
Agreement may be amended by the Board in order to cure any
ambiguity, defect or inconsistency, to make changes which do
not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person), or to shorten
or lengthen any time period under the Rights Agreement;
provided, however, that no amendment to adjust the time
period governing redemption may be made at such time as the
Rights are not redeemable.
The Rights may have certain anti-takeover effects. The
Rights will cause substantial dilution to a person or group that
attempts to acquire the Company on terms not approved by the
Board of Directors unless the offer is conditioned on a
substantial number of Rights being acquired. However, the
Rights should not interfere with any merger or other business
combination approved by the Board of Directors since the
Rights may be redeemed by the Company at $.0001 per Right
at any time on or prior to the Distribution Date. Thus, the Rights
are intended to encourage persons who may seek to acquire
control of the Company to initiate such an acquisition through
negotiations with the Board of Directors. However, the effect of
the Rights may be to discourage a third party from making a
partial tender offer or otherwise attempting to obtain a
substantial position in the Company's equity securities or
seeking to obtain control of the Company. To the extent any
potential acquirers are deterred by the Rights, the Rights may
have the effect of preserving incumbent management in office.
