EXHIBIT 99.1
RIGHTS AGREEMENT
XXXXXXXX, INC.
and
AMERICAN SECURITIES TRANSFER & TRUST, INC.
as Rights Agent
RIGHTS AGREEMENT
dated as of
October 6, 1998
TABLE OF CONTENTS
1. Certain Definitions. . 1
2. Appointment of Rights Agent. . . . . . . . . . . . 5
3. Issue of Rights Certificates.. . . . . . . . . . . 5
4. Form of Rights Certificates. . . . . . . . . . . . 7
5. Countersignature and Registration. . . . . . . . . 8
6. Transfer, Split-Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates.8
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.9
8. Cancellation and Destruction of Rights Certificates.11
9. Concerning the Capital Stock.. . . . . . . . . . .11
10. Record Date.. . . . . . . . . . . . . . . . . . .12
11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights. . . . . . . . . . . . . . . . . . . . . . . .13
12. Certificate of Adjusted Purchase Price or Number of Shares.20
13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.. . . . . . . . . . . . . . . . . . . . . . . .20
14. Fractional Rights and Fractional Shares.. . . . .23
15. Rights of Action. . . . . . . . . . . . . . . . .24
16. Agreement of Rights Holders.. . . . . . . . . . .24
17. Rights Certificate Holder Not Deemed a Stockholder.25
18. Concerning the Rights Agent.. . . . . . . . . . .25
19. Merger or Consolidation or Change of Name of Rights Agent.26
20. Duties of Rights Agent. . . . . . . . . . . . . .26
21. Change of Rights Agent. . . . . . . . . . . . . .28
22. Issuance of New Rights Certificates.. . . . . . .29
23. Redemption and Termination. . . . . . . . . . . .29
24. Exchange. . . . . . . . . . . . . . . . . . . . .30
25. Notice of Certain Events. . . . . . . . . . . . .32
26. Notices.. . . . . . . . . . . . . . . . . . . . .33
27. Supplements and Amendments. . . . . . . . . . . .33
28. Successors. . . . . . . . . . . . . . . . . . . .34
29. Determination and Actions by the Board of Directors, etc.34
30. Benefits of this Agreement. . . . . . . . . . . .34
31. Severability. . . . . . . . . . . . . . . . . . .35
32. Governing Law.. . . . . . . . . . . . . . . . . .35
33. Counterparts. . . . . . . . . . . . . . . . . . .35
34. Descriptive Headings; References. . . . . . . . .35
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT (this "Agreement"), dated as of October 6, 1998,
is entered into by and between XXXXXXXX, INC., a Delaware corporation
(the "Company"), and American Securities Transfer & Trust, Inc., a
Colorado corporation (the "Rights Agent"), with reference to the
following facts:
WHEREAS, on September 23, 1998 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company authorized and declared a dividend
distribution of one Right for each share of Common Stock (as hereinafter
defined) of the Company outstanding at the Close of Business on October
11, 1998 (the "Record Date"), and has authorized the issuance of one
Right (as such number may hereinafter be adjusted pursuant to the
provisions of Section 11(p)) for each share of Common Stock of the
Company issued from the Record Date (whether originally issued or
delivered from the Company's treasury) until the earliest of the
Distribution Date or a Section 13 Event or the Expiration Date (each as
hereinafter defined), each Right initially representing the right to
purchase one share of Common Stock of the Company, upon the terms and
subject to the conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
1. Certain Definitions.
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring Person" shall mean any Person who or which, together with
all Affiliates and Associates of such Person, without the prior approval
of the Board of Directors of the Company, shall become, after the date
hereof, the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, but shall not include an Exempt Person or a
Person who or which, together with its Affiliates and Associates, shall
become the Beneficial Owner of 15% or more of the shares of Common Stock
then outstanding solely as a result of a reduction in the number of
shares of Common Stock outstanding due to a repurchase of Common Stock
by the Company, unless such Person shall thereafter purchase or
otherwise become the Beneficial Owner of additional shares of Common
Stock representing 1% of the shares of Common Stock then outstanding.
Notwithstanding the foregoing, if the Board of Directors of the Company
determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provisions of
this paragraph (a), has become such inadvertently, and such Person
divests as promptly as practicable a sufficient number of shares of
Common Stock so that such Person would no longer be an "Acquiring
Person," as defined pursuant to the foregoing provisions of this
paragraph (a), then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Agreement.
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii).
(d) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended and in
effect on the date of this Agreement (the "Exchange Act").
(e) 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; provided, however, that a Person
shall not be deemed the "Beneficial Owner" of, or to "Beneficially Own,"
(A)securities tendered pursuant to a tender or exchange offer made by
such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or
(B)securities issuable upon exercise of Rights at any time prior to the
occurrence of a Triggering Event, or (C) securities issuable upon
exercise of Rights from and after the occurrence of a Triggering Event
which Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to
Section3(a) or Section 22 (the "Original Rights") or pursuant to Section
11(i) in connection with an adjustment made with respect to any Original
Rights;
(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
(e)) or disposing of any voting securities of the Company; provided,
however, that nothing in this paragraph (e) shall cause a person engaged
in business as an underwriter of securities to be the "Beneficial Owner"
of, or to "Beneficially Own," any securities acquired through such
person's participation in good faith in a firm commitment underwriting
until the expiration of 40 days after the date of such acquisition.
(f) "Business Day" shall mean any day other than a Saturday, Sunday or a
day on which banking institutions in the State of California are
authorized or obligated by law or executive order to close.
(g) "Close of Business" on any given date shall mean 5:00 P.M.,
California time on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., California time on the next
succeeding Business Day.
(h) "Common Stock" shall mean the common stock, par value $.001 per
share, of the Company, except that "Common Stock" when used with
reference to any Person other than the Company shall mean the capital
stock (or units of beneficial interest which represent the right to
participate in profits, losses, deductions and credits) of such Person
with the greatest voting power, or the equity securities or other equity
interest having power to control or direct the management, of such
Person.
(i) "Common Stock Equivalent" shall have the meaning set forth in
Section 11(a)(iii).
(j) "Continuing Director" shall mean (i) any member of the Board of
Directors of the Company, while a member of the Board, who is not an
Acquiring Person, or an Affiliate or Associate of an Acquiring Person,
or a representative of an Acquiring Person or of any such Affiliate or
Associate, and who was a member of the Board prior to the date of this
Agreement, or (ii) any Person who subsequently becomes a member of the
Board, while a member of the Board, who is not an Acquiring Person, or
an Affiliate or Associate of an Acquiring Person, or a representative of
an Acquiring Person or of any such Affiliate or Associate, if such
Person's nomination for election or election to the Board is recommended
or approved by a majority of the Continuing Directors.
(k) "Current Market Price" shall have the meaning set forth in Section
11(d)(i).
(l) "Current Value" shall have the meaning set forth in Section
11(a)(iii).
(m) "Distribution Date" shall have the meaning set forth in Section
3(a).
(n) "Equivalent Common Stock" shall have the meaning set forth in
Section 11(b).
(o) "Exchange Act" shall have the meaning set forth in Section 1(d).
(p) "Exempt Person" shall mean the Company, any Subsidiary of the
Company, any employee benefit plan or employee stock plan of the Company
or any Subsidiary of the Company, or any person or entity organized,
appointed, or established by the Company or any Subsidiary of the
Company, for or pursuant to the terms of any such plan.
(q) "Expiration Date" shall mean the earliest of (i) the Final
Expiration Date, (ii) the time at which the Rights are redeemed as
provided in Section 23, (iii) the time at which the Board of Directors
orders the exchange of Rights as provided in Section 24, or (iv) the
consummation of a transaction contemplated by Section 13(d).
(r) "Final Expiration Date" shall mean the Close of Business on October
5, 2008.
(s) "NASDAQ" shall mean the National Market System of the National
Association of Securities Dealers Automated Quotation System.
(t) "Person" shall mean any individual, firm, corporation, partnership
or other entity.
(u) "Principal Party" shall have the meaning set forth in Section 13(b).
(v) "Purchase Price" shall have the meaning set forth in Section 4(a).
(w) "Ratio of Exchange" shall have the meaning set forth in Section
24(a).
(x) "Record Date" shall have the meaning set forth in the WHEREAS clause
at the beginning of this Agreement.
(y) "Redemption Price" shall have the meaning set forth in Section
23(a).
(z) "Rights" shall have the meaning set forth in the WHEREAS clause at
the beginning of this Agreement.
(aa) "Rights Certificates" shall have the meaning set forth in Section
3(a).
(bb) "Rights Dividend Declaration Date" shall have the meaning set forth
in the WHEREAS clause at the beginning of this Agreement.
(cc) "Section 11(a)(ii) Event" shall mean any event described in Section
11(a)(ii).
(dd) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii).
(ee) "Section 13 Event" shall mean any event described in clause (x),
(y) or (z) of Section 13(a).
(ff) "Special Vote" shall mean an action of the Company's Board of
Directors that is taken (and can only be taken) at a time when there are
two or more Continuing Directors, and that is approved by both (i) a
majority of the Continuing Directors, and (ii) a majority of the entire
Board of Directors, including the Continuing Directors.
(gg) "Spread" shall have the meaning set forth in Section 11(a)(iii).
(hh) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall include,
without limitation, a report properly filed pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such or such earlier date as a majority of
the directors shall become aware of the existence of an Acquiring
Person; provided, however, that if such Person is thereafter determined
not to have become an Acquiring Person within the meaning of
Section 1(a), then no Stock Acquisition Date shall be deemed to have
occurred.
(ii) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient to elect at least a
majority of the directors of such corporation (or other persons
performing similar functions) is Beneficially Owned, directly or
indirectly, by such Person, or otherwise controlled by such Person.
(jj) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii).
(kk) "Trading Day" shall mean a day on which the principal national
securities exchange or market system on which the shares of Common Stock
are listed or admitted to trading is open for the transaction of
business or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange or market system, a Business
Day.
(ll) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
Any determination required by the definitions contained in this Section
1 shall be made by the Board of Directors of the Company in its good
faith judgment, which determination shall be binding on the Rights Agent
and the holders of the Rights.
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, shall prior to the Distribution Date also be the holders of the
Common Stock) 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.
3. Issue of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the tenth (10th)
day after the Stock Acquisition Date (or, if the tenth (10th) day after
the Stock Acquisition Date occurs before the Record Date, the Close of
Business on the Record Date), or (ii) the Close of Business on the tenth
(10th) day after the date that a tender or exchange offer by any Person
(other than an Exempt Person) is first published or sent or given within
the meaning of Rule 14d-2(a) of the General Rules and Regulations under
the Exchange Act, if, upon consummation thereof, such Person, together
with its Affiliates and Associates, would be the Beneficial Owner of 15%
or more of the shares of Common Stock then outstanding (irrespective of
whether any shares are actually purchased pursuant to any such offer)
(each of the time periods in (i) and (ii) being subject to extension as
provided in Section 27 and the earliest of (i) and (ii) being herein
referred to as the "Distribution Date"), (x) the Rights will be
evidenced (subject to the provisions of paragraph (b) of this Section 3)
by the certificates for the Common Stock registered in the names of the
holders of the Common Stock (which certificates for Common Stock shall
be deemed also to be certificates for Rights) and not by separate
certificates, and (y) each Right will be transferable only in connection
with the transfer of the underlying share of Common Stock (including a
transfer to the Company). As soon as practicable after the Distribution
Date, the Rights Agent will send to each record holder of the Common
Stock 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
rights certificates in substantially the form of Exhibit A hereto (the
"Rights Certificates"), evidencing one Right for each share of Common
Stock so held, subject to adjustment as provided herein. In the event
that an adjustment in the number of Rights per share of Common Stock has
been made pursuant to Section 11(p), at the time of distribution of the
Rights Certificates, the Company shall make the necessary and
appropriate rounding adjustments (in accordance with Section 14(a)) so
that Rights 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 will be evidenced solely by
such Rights Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to purchase Common Stock,
containing substantially the information set forth in the form attached
hereto as Exhibit B, to each record holder of the Common Stock as of the
Close of Business on the Record Date, at the address of such holder
shown on the records of the Company. With respect to certificates for
the Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates for
the Common Stock and the registered holders of the Common Stock shall
also be the registered holders of the associated Rights. Until the
earlier of the Distribution Date or the Expiration Date, the transfer of
any certificates representing shares of Common Stock in respect of which
Rights have been issued shall also constitute the transfer of the Rights
associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common Stock that
are issued after the Record Date but prior to the earliest of the
Distribution Date or a Section 13 Event or the Expiration Date.
Certificates representing such shares of Common Stock (including,
without limitation, certificates issued upon transfer or exchange of
Common Stock) shall also be deemed to be certificates for Rights, and
shall bear the following legend:
This certificate also represents Rights that entitle the holder hereof
to certain rights as set forth in a Rights Agreement between the
Corporation and American Securities Transfer & Trust, Inc., as Rights
Agent, dated as of October 6, 1998 (the "Rights Agreement"), the terms,
conditions and limitations of which are hereby incorporated herein by
reference and a copy of which is on file at the principal offices of the
Corporation. Under certain circumstances, as set forth in the Rights
Agreement, such Rights will be evidenced by separate certificates and
will no longer be evidenced by this certificate. The Corporation will
mail to the holder of this certificate a copy of the Rights Agreement,
as in effect on the date of mailing, without charge promptly after
receipt of a written request therefor. Under certain circumstances set
forth in the Rights Agreement, Rights issued to, or beneficially owned
by, any Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person or by
any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, the
Rights associated with the Common Stock represented by such certificates
shall, until the Distribution Date, be evidenced by such certificates
alone and registered holders of Common Stock shall also be the
registered holders of the associated Rights, and the transfer of any of
such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of an election to purchase
and of assignment and of certificates to be printed on the reverse
thereof) when, as and if issued, shall each be substantially in the form
set forth in Exhibit A hereto and may have such marks of identification
or designation and such legends, summaries or endorsements printed
thereon as the Company may deem appropriate and as are not inconsistent
with the provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which
the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 11 and Section 22, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date
and on their face shall entitle the holders thereof to purchase such
number of shares of Common Stock as shall be set forth therein at the
price set forth therein (such exercise price per share, the "Purchase
Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject
to adjustment as provided herein.
(b) Notwithstanding any other provision of this Agreement, any Rights
Certificate issued pursuant to Section 3(a) or Section 22 that
represents Rights Beneficially Owned by any Person known to be (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) a transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests
in such Acquiring Person or to any Person with whom such Acquiring
Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer that the Board of
Directors of the Company has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect avoidance of
Section 7(e), and any Rights Certificate issued pursuant to Section 6 or
Section 11 upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to
the extent feasible) the following legend, modified as applicable to
apply to such Person:
The Rights represented by this Rights 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 Rights Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement.
5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company
by its Chairman of the Board, its President or any other officer of the
Company designated by the Chairman or 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 Rights 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 Rights Certificates shall cease to be such officer of the
Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights 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 Rights Certificates had not ceased to be such officer of the
Company; and any Rights Certificates may be signed on behalf of the
Company by any person who, at the actual date of the execution of such
Rights Certificate shall be a proper officer of the Company to sign such
Rights 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 will keep or cause
to be kept, at its office or offices designated as the appropriate place
for surrender of Rights Certificates upon exercise or transfer, books
for registration and transfer of the Rights Certificates issued
hereunder. Such books shall show the names and addresses of the
respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the
certificate number and the date of each of the Rights Certificates.
6.Transfer, Split-Up, Combination and Exchange of Rights Certificates;
Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e) and Section
14, at any time after the Close of Business on the Distribution Date,
and at or prior to the Close of Business on the Expiration Date, any
Rights Certificate or Certificates may be transferred, split up,
combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of shares of
Common Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights
Certificate or 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 Rights
Certificate or Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Rights Certificate or
Certificates to be transferred, split up, combined or exchanged at the
office or offices of the Rights Agent designated for such purpose.
Neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have completed and
signed the certificate contained in the form of assignment on the
reverse side of such Rights Certificate and shall have provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request. Thereupon the Rights Agent shall, subject to
Section 4(b), Section 7(e) and Section 14, countersign and deliver to
the Person entitled thereto a Rights Certificate or Rights Certificates,
as the case may be, as so requested. The Company may require payment of
a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split up, combination or
exchange of Rights 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 Rights 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 Rights Certificate if mutilated, the Company will
execute and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and delivery to the registered owner in lieu
of the Rights Certificate so lost, stolen, destroyed or mutilated.
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 7(e), Section 23(b) and Section 24(b), the
registered holder of any Rights Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein including,
without limitation, the restrictions on exercisability set forth in
Section 9(c), Section 11(a)(iii) and Section 23(a)), in whole or in part
at any time after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase and the certificate
on the reverse side thereof duly executed, to the Rights Agent at the
office or offices of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with respect to
the total number of shares of Common Stock (or other securities, cash or
other assets, as the case may be) as to which such surrendered Rights
are then exercisable, at or prior to the Expiration Date.
(b) The Purchase Price for each share of Common Stock pursuant to the
exercise of a Right shall initially be $40, and shall be subject to
adjustment from time to time as provided in Section 11 and Section 13(a)
and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment, with respect to each Right so
exercised, of the Purchase Price per share of Common Stock (or other
shares, securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any applicable
transfer tax, the Rights Agent shall, subject to Section 20(k),
thereupon promptly (i) (A) requisition from any transfer agent of the
shares of Common Stock (or make available, if the Rights Agent is the
transfer agent for such shares) certificates for the total number of
shares of Common Stock to be purchased and the Company hereby authorizes
its transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of shares of
Common Stock issuable upon exercise of the Rights hereunder with a
depository agent, requisition from the depository agent depository
receipts representing such number of shares of Common Stock as are to be
purchased (in which case certificates for the shares of Common Stock
represented by such receipts shall be deposited by the transfer agent
with the depository agent) and the Company will direct the depository
agent to comply with such request, (ii) requisition from the Company an
amount of cash, if any, to be paid in lieu of fractional shares in
accordance with Section 14, (iii) after receipt of such certificates or
depository receipts, cause the same to be delivered to or upon the order
of the registered holder of such Rights Certificate, registered in such
name or names as may be designated by such holder, and (iv) after
receipt thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii)) may be made by bank draft, certified bank check or
money order payable to the order of the Company. In the event that the
Company is obligated to issue other securities (including Common Stock)
of the Company, pay cash and/or distribute other property pursuant to
Section 11(a), the Company will make all arrangements necessary so that
such other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent and delivered to, or
upon the order of, the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder,
subject to the provisions of Section 14.
(e) Notwithstanding anything in this Agreement to the contrary, from and
after the occurrence of a Section 11(a)(ii) Event, any Rights
Beneficially Owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee
after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate of Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether
or not for consideration) by or for the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which
the Board of Directors of the Company has determined is part of a plan,
arrangement or understanding which has as a primary purpose or effect
the avoidance of this Section 7(e), shall become 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 insure that the provisions of this Section 7(e) and Section
4(b) are complied with, but shall have no liability to any holder of
Rights Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or any of their
respective Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any
purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate contained in
the form of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights
Agent, shall be canceled by it, and no Rights Certificates shall be
issued in lieu thereof except as expressly permitted by any of the
provisions of 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 Rights Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights Agent
shall deliver all canceled Rights Certificates to the Company, or shall,
at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
9. Concerning the Capital Stock.
(a) The Company shall not be required to reserve and keep available
shares of Common Stock sufficient to permit the exercise in full of all
outstanding Rights unless, and only to the extent that, the Rights
become exercisable, provided that the Company's obligation to reserve
shares after the rights become exercisable will be subject to Section
11(a)(iii).
(b) So long as the shares of Common Stock and/or other securities
issuable and deliverable upon the exercise of Rights may be listed on
any national securities exchange or quoted on the Nasdaq National
Market, the Company shall use its best efforts to cause, from and after
such time as the Rights become exercisable, all such shares to be so
listed or quoted upon official notice of issuance upon such exercise.
(c) If necessary to permit the offer and issuance of Common Stock and/or
other securities issuable and deliverable upon the exercise of Rights,
the Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the occurrence of a
Section 11(a)(ii) Event on which the consideration to be delivered by
the Company upon exercise of the Rights has been determined in
accordance with Section 11(a)(iii), or as soon as is required by law
following the Distribution Date, as the case may be, a registration
statement under the Act, with respect to the securities purchasable upon
exercise of the Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of
the Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the date of the
expiration of the Rights. The Company will also take such action as may
be appropriate under, or to ensure compliance with, the securities or
"blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for
a period of time not to exceed ninety (90) days after the date set forth
in clause (i) of the first sentence of this Section 9(c), the
exercisability of the Rights in order to prepare and file such
registration statement and permit it to become effective. Upon any such
suspension, the Company shall issue a public announcement stating that
the exercisability of the Rights has been temporarily suspended, as well
as a public announcement at such time as the suspension is no longer in
effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable in any jurisdiction,
unless the requisite qualification in such jurisdiction shall have been
obtained and until a registration statement (if required) has been
declared effective.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all shares of Common Stock and/or
other securities delivered upon exercise of Rights shall, at the time of
delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully
paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the
Rights Certificates and of any certificates for a number of shares of
Common Stock and/or other securities, as the case may be, upon the
exercise of Rights. The Company shall not, however, be required to pay
any transfer tax which may be payable in respect of any transfer or
delivery of Rights Certificates to a Person other than, or the issuance
or delivery of a number of shares of Common Stock and/or other
securities, as the case may be, in respect of a name other than that of,
the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for a
number of shares of Common Stock and/or other securities, as the case
may be, in a name other than that of the registered holder upon the
exercise of any Rights until such tax shall have been paid (any such tax
being payable by the holder of such Rights Certificate at the time of
surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
10. Record Date.
Each person in whose name any certificate for a number of shares of
Common Stock and/or other securities, as the case may be, is issued upon
the exercise of Rights shall for all purposes be deemed to have become
the holder of record of such fractional shares of Common Stock and/or
other securities, as the case may be, represented thereby and such
certificate shall be dated as of the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of
the Purchase Price (and all applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a
date upon which the Common Stock and/or other securities, as the case
may be, transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares (fractional or
otherwise) on, and such certificate shall be dated, the next succeeding
Business Day on which the Common Stock and/or other securities, as the
case may be, transfer books of the Company are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights
Certificate, as such, shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights
shall be exercisable, including, without limitation, the right to vote,
to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of
any proceedings of the Company, except as provided herein.
11. Adjustment of Purchase Price, Number and Kind of Shares or Number of
Rights.
The Purchase Price, the number and kind of shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time
to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Common Stock payable in
shares of Common Stock, (B) subdivide the outstanding Common Stock, (C)
combine the outstanding Common Stock into a smaller number of shares, or
(D) issue any shares of its capital stock in a reclassification of the
Common Stock (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) and Section 7(e), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of Common Stock or capital stock, as the case may be, issuable on
such date, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number and
kind of shares of Common Stock or capital stock, as the case may be,
which, if such Right had been exercised immediately prior to such date
and at a time when the Common Stock transfer books of the Company were
open, he 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), 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).
(ii) Subject to Section 23(a) and Section 24, in the event any Person
(other than an Exempt Person), alone or together with its Affiliates and
Associates, shall, at any time after the Rights Dividend Declaration
Date, become the Beneficial Owner of 15% or more of the shares of Common
Stock then outstanding, unless the event causing the 15% threshold to be
crossed is a transaction set forth in Section 13(a), or is an
acquisition of shares of Common Stock pursuant to a tender offer or an
exchange offer for all outstanding shares of Common Stock at a price and
on terms determined by the Board of Directors of the Company acting by
Special Vote and by at least a majority of the Continuing Directors who
are not officers of the Company, after receiving advice from one or more
investment banking firms, to be (a) at a price which is fair to
stockholders of the Company (taking into account all factors which such
members of the Board deem relevant including, without limitation, prices
which could reasonably be achieved if the Company or its assets were
sold on an orderly basis designed to realize maximum value) and
(b)otherwise in the best interests of the Company and its stockholders,
then, proper provision shall be made so that each holder of a Right
(except as provided below and in Section 7(e)) shall thereafter have the
right to receive, upon exercise thereof at the then current Purchase
Price in accordance with the terms of this Agreement, in lieu of one
share of Common Stock per right, such number of shares of Common Stock
of the Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of shares of Common Stock
for which a Right was exercisable immediately prior to the occurrence of
a Section 11(a)(ii) Event, and (y) dividing that product (which,
following such occurrence, shall thereafter be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement)
by 50% of the Current Market Price (determined pursuant to Section
11(d)) per share of Common Stock on the date of such occurrence (such
number of shares is herein called the "Adjustment Shares"); provided
that the Purchase Price and the number of Adjustment Shares shall be
further adjusted as provided in this Agreement to reflect any events
occurring after the date of such occurrence; and provided, further, that
if the transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13, then only
the provisions of Section 13 shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii).
(iii) In the event that the number of shares of Common Stock 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) and the Rights shall become so exercisable, to the extent
permitted by applicable law and any agreements in effect on the date
hereof to which the Company is a party, the Company shall (A) determine
the excess of (1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the "Current Value") over (2) the Purchase Price
(such excess, the "Spread"), and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment Shares, upon payment
of the applicable Purchase Price, (1)cash, (2)a reduction in the
Purchase Price, (3)Common Stock or other equity securities of the
Company (including, without limitation, shares, or units of shares, of
preferred stock which the Board of Directors of the Company has deemed
to have the same value as shares of Common Stock ("Common Stock
Equivalents")), (4)debt securities of the Company, (5) other assets, or
(6)any combination of the foregoing, having an aggregate value equal to
the Current Value, where such aggregate value has been determined by the
Board of Directors of the Company based upon the advice of a nationally
recognized investment banking firm selected by the Board of Directors of
the Company; provided, however, if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above within
thirty (30) days following the later of (x) the occurrence of a
Section 11(a)(ii) 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 "Section 11(a)(ii) Trigger Date"), then
the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase Price,
shares of Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to the
Spread. If the Board of Directors of the Company shall determine in
good faith that it is likely that sufficient additional shares of Common
Stock could be authorized for issuance upon exercise in full of the
Rights, the thirty (30) day period set forth above may be extended to
the extent necessary, but not more than ninety (90) days after the
Section 11(a)(ii) Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares
(such period, as it may be extended, the "Substitution Period"). To the
extent that the Company determines that some action need be taken
pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section
7(e), that such action shall apply uniformly to all outstanding Rights,
and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any authorization
of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine
the value thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement
at such time as the suspension is no longer in effect. For purposes of
this Section 11(a)(iii), the value of the Common Stock shall be the
Current Market Price (as determined pursuant to Section 11(d)) per share
of the Common Stock on the Section 11(a)(ii) Trigger Date and the value
of any "Common Stock Equivalent" shall be deemed to have the same value
as the Common Stock on such date. The Board of Directors may, but shall
not be required to, establish procedures to allocate the right to
receive Common Stock upon the exercise of Rights pursuant to this
Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of
Common Stock entitling them to subscribe for or purchase (for a period
expiring within forty-five (45) calendar days after such record date)
Common Stock (or shares having the same rights, privileges and
preferences as the shares of Common Stock ("Equivalent Common Stock"))
or securities convertible into Common Stock or Equivalent Common Stock
at a price per share of Common Stock or per share of Equivalent Common
Stock (or having a conversion price per share, if a security convertible
into Common Stock or Equivalent Common Stock) less than the Current
Market Price (as determined pursuant to Section 11(d)) per share of
Common Stock 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 shares of Common Stock
outstanding on such record date, plus the number of shares of Common
Stock which the aggregate offering price of the total number of shares
of Common Stock (and/or Equivalent Common Stock so to be offered and/or
the aggregate initial conversion price of the convertible securities so
to be offered) would purchase at such Current Market Price, and the
denominator of which shall be the number of shares of Common Stock
outstanding on such record date, plus the number of additional shares of
Common Stock and/or Equivalent Common Stock 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 by delivery of consideration part or all of which may 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. Shares of Common Stock 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 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 case the Company shall fix a record date for a distribution to
all holders of Common Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the
continuing corporation) of evidences of indebtedness, cash (other than a
cash dividend out of the earnings or retained earnings of the Company),
assets (other than a dividend payable in Common Stock, but including any
dividend payable in stock other than Common Stock) or subscription
rights or warrants (excluding those referred to in Section 11(b)), the
Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior
to such record date by a fraction, the numerator of which shall be the
Current Market Price (as determined pursuant to Section 11(d)) per share
of Common Stock on such record date, 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) of the portion of the cash, assets or evidences of indebtedness
so to be distributed or of such subscription rights or warrants
applicable to a share of Common Stock and the denominator of which shall
be such Current Market Price (as determined pursuant to Section 11(d))
per share of Common Stock. Such adjustments shall be made successively
whenever such a record dated is fixed, and in the event that such
distribution is not so made, the Purchase Price shall be adjusted to be
the Purchase Price which would have been in effect if such record date
had not been fixed.
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii), the "Current Market
Price" per share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common Stock for
the thirty (30) consecutive Trading Days (as hereinafter defined)
immediately prior to such date and for purposes of computations made
pursuant to Section 11(a)(iii), the "Current Market Price" per share of
Common Stock on any date shall be deemed to be the average of the daily
closing prices per share of such Common Stock for the then ten (10)
consecutive Trading Days immediately following such date; provided,
however, that in the event that the Current Market Price per share of
the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) a dividend or
distribution on such Common Stock payable in shares of such Common Stock
or securities convertible into shares of such Common Stock (other than
the Rights), or (B) any subdivision, combination or reclassification of
such Common Stock, and prior to the expiration of the requisite thirty
(30) Trading Day or ten (10) Trading Day period, as set forth above,
after the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification, then,
and in each such case, the Current Market Price shall be properly
adjusted to take into account ex-dividend trading. The closing price
for each day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities
listed or admitted to trading on the National Market System of NASDAQ
or, if the shares of Common Stock are not listed or admitted to trading
on National Market System of NASDAQ, as reported in the principal
consolidated transaction reporting system with respect to securities
listed on the principal national securities exchange on which the shares
of Common Stock are listed or admitted to trading or, if the shares of
Common Stock are not listed or admitted to trading on any national
securities exchange the last quoted price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use, or, if
on any such date the shares of Common Stock 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
Stock selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Common Stock, the fair
value of such shares on such date as determined in good faith by the
Board of Directors of the Company shall be used. If the Common Stock is
not publicly held or not so listed or traded, Current Market Price per
share 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) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (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 tenth of a share of Common Stock or other share, as the
case may be. Notwithstanding the first sentence of this Section 11(e),
an adjustment required by this Section 11 shall be made no later than
the earlier of (i) three (3) years from the date of the transaction
which mandates such adjustments, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)(ii)
or Section 13(a), the holder of any Right thereafter exercised shall
become entitled to receive any shares of capital stock other than Common
Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof 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
Stock contained in Section 11, and the provisions of Section 7, Section
9, Section 10, Section 13, and Section 14 with respect to the Common
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of shares of
Common Stock purchasable from time to time hereunder upon exercise of
the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i), upon each adjustment of the Purchase Price as a result of
the calculations made in Section 11(b) and Section 11(c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase
Price, that number of shares of Common Stock (calculated to the nearest
one tenth) obtained by (i) multiplying (x) the number of shares covered
by 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 lieu of any adjustment
in the number of shares of Common Stock purchasable upon the exercise of
a Right. Each of the Rights outstanding after the adjustment in the
number of Rights shall be exercisable for the number of shares of Common
Stock 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-tenth) 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 to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least ten (10) days later than the date of the
public announcement. If Rights 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 Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14, 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 Rights
Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Rights 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 Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of shares of Common Stock issuable upon the exercise of the
Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per share and the number of
shares which were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause adjustment reducing the
Purchase Price below the then stated value, if any, of the number of
shares of Common Stock issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable such number of shares of Common Stock
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 shares of Common Stock
and other capital stock or securities of the Company, if any, issuable
upon such exercise over and above the number of shares of Common Stock
and other capital stock or securities of the Company, if any, issuable
upon such exercise on the basis of the Purchase Price in effect prior to
such adjustment; provided, however, that the Company shall deliver to
such holder a due xxxx or other appropriate instrument evidencing such
holder's right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the event requiring such
adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
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 their 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 Stock, (ii) issuance
wholly for cash of any shares of Common Stock at less than the Current
Market Price, (iii) issuance wholly for cash of shares of Common Stock
or securities which by their terms are convertible into or exchangeable
for shares of Common Stock, (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 Stock shall not be taxable
to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(o)), (ii) merge with or into any other Person (other
than a Subsidiary of the Company in a transaction which complies with
Section 11(o)), or (iii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company and/or any
of its Subsidiaries in one or more transactions each of which complies
with Section 11(o)), if (x) at the time of or immediately after such
consolidation, merger, sale or transfer 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, sale or transfer,
the stockholders of the Person who constitutes, or would constitute, the
Principal Party (as hereinafter defined) for purposes of Section 13(a)
shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution Date,
it will not, except as permitted by Section 23, Section 24 or Section
27, take (or permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to
be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in the
event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the Distribution Date (i) declare a
dividend on the outstanding shares of Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding shares of Common Stock, or
(iii) combine the outstanding shares of Common Stock into a smaller
number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution date, shall be proportionately adjusted so
that the number of Rights thereafter associated with each share of
Common Stock following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of Common
Stock immediately prior to such event by a fraction the numerator which
shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of
which shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event.
12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent, and with each
transfer agent for the Common Stock, a copy of such certificate, and (c)
mail a brief summary thereof to each holder of a Rights Certificate (or,
if prior to the Distribution Date, to each holder of a certificate
representing shares of Common Stock) in accordance with Section 25.
Notwithstanding the foregoing sentence, the failure of the Company to
give such notice shall not affect the validity of or the force or effect
of or the requirement for such adjustment. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment
therein contained. Any adjustment to be made pursuant to Section 11 and
Section 13 shall be effective as of the date of the event giving rise to
such adjustment.
13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event that, following the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and
into, any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o)), and the Company shall
not be the continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o)) shall consolidate with,
or merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or merger,
and, in connection with such consolidation or merger, all or part of the
outstanding shares of Common Stock shall be changed into or exchanged
for stock or other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related 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 Person or Persons (other
than the Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o)), then, and in
each such case, proper provisions shall be made so that (i) each holder
of a Right, except as provided in Section 7(e), shall thereafter have
the right to receive, upon the exercise thereof at the then current
Purchase Price in accordance with the terms of this Agreement, such
number of validly authorized and issued, fully paid, non-assessable and
freely tradable shares of Common Stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens, encumbrances,
rights of first refusal or other adverse claims, as shall be equal to
the result obtained by (1) multiplying the number of shares of Common
Stock for which a Right was exercisable immediately prior to the
occurrence of such an event by the Purchase Price in effect immediately
prior to such an event, and (2) dividing that product (which, following
the first occurrence of a Section 13 Event, shall be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement)
by 50% of the Current Market Price (determined pursuant to
Section 11(d)(i)) per share of the Common Stock of such Principal Party
on the date of consummation of such Section 13 Event (or the fair market
value on such date of other securities or property of the Principal
Party, as provided for herein); provided, however, that the Purchase
Price and the number of shares of Common Stock of such Principal Party
issuable upon exercise of each Right shall be further adjusted as
provided in this Agreement to reflect any events occurring after the
date of the first occurrence of a Section 13 Event; (ii) such Principal
Party shall thereafter be liable for, and shall assume, by virtue of
such Section 13 Event, all the obligations and duties of the Company
pursuant to this Agreement; (iii) the term "Company" shall thereafter be
deemed to refer to such Principal Party, it being specifically intended
that the provisions of Section 11 shall apply only to such Principal
Party following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited to,
the reservation of a sufficient number of shares of its Common Stock) in
connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the Rights;
provided, however, that upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all assets,
recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each
holder of a Right shall thereupon be entitled to receive, upon exercise
of a Right and payment of the Purchase Price, such cash, shares, rights,
warrants and other property which such holder would have been entitled
to receive had he, at the time of such transaction, owned the shares of
Common Stock of the Principal Party purchasable upon the exercise of a
Right, and such Principal Party shall take such steps (including, but
not limited to, reservation of shares of stock) as may be necessary to
permit the subsequent exercise of the Rights in accordance with the
terms hereof for such cash, shares, rights, warrants and other property;
and (v) the provisions of Section 11(a)(ii) shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or (y) of the
first sentence of Section 13(a), (A) the Person that is the issuer of
any securities into which shares of Common Stock of the Company are
converted in such merger or consolidation, or, if there is more than one
such issuer, the issuer whose issued and outstanding Common Stock has
the greatest aggregate market value or (B) if no securities are so
issued, (x) the Person that is the other party to such merger or
consolidation and survives said merger or consolidation, or, if there is
more than one such Person, the Person whose issued and outstanding
Common Stock has the greatest aggregate market value or (y) if the
Person that is the other party to the merger or consolidation does not
survive the merger or consolidation, the Person that does survive the
merger or consolidation (including the Company if it survives); and
(ii) in the case of any transaction described in clause (z) of the first
sentence of Section 13(a), the Person that is the party receiving the
greatest portion of the assets or earning power 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 so transferred or if the Person receiving the greatest
portion of the assets or earning power cannot be determined, whichever
of such Persons as is the issuer of Common Stock having the greatest
market value of shares outstanding;
provided, however, that in any such case, (l) if the Common Stock of
such Person is not at such time and has not been continuously over the
preceding twelve (12) month period registered under Section 12 of the
Exchange Act, and such Person is a direct or indirect Subsidiary of
another Person the Common Stock of which is and has been so registered,
"Principal Party" shall refer to such other Person; and (2) if such
Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such persons
is the issuer of the issued and outstanding Common Stock having the
greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock 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 thereto the
Company and such Principal Party shall have executed and delivered to
the Rights Agent a supplemental agreement providing for the terms set
forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any consolidation,
merger, sale or transfer mentioned in paragraph (a) of this Section 13,
the Principal Party will:
(i) prepare and file a registration statement under the Act, with
respect to the Rights and the securities purchasable upon exercise of
the Rights on an appropriate form, and will 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 Act) until the
Expiration Date and similarly comply with applicable state securities
laws;
(ii) will deliver to holders of the Rights historical financial
statements of the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10
(or any successor form) under the Exchange Act;
(iii) use its best efforts, if the Common Stock of the Principal Party
shall become listed on a national securities exchange, to list (or
continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on such securities exchange and, if the Common
Stock of the Principal Party shall not be listed on a national
securities exchange, to cause the Rights and the securities purchasable
upon exercise of the Rights to be reported by NASDAQ or such other
system then in use; and
(iv) obtain waivers of any rights of first refusal or preemptive rights
in respect of the shares of Common Stock of the Principal Party subject
to purchase upon exercise of outstanding Rights.
The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or transfers. In the event that a
Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been
exercised shall thereafter become exercisable in the manner described in
Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary, Section
13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such transaction is consummated with
a Person or Persons who acquired shares of Common Stock pursuant to a
tender offer or exchange offer for all outstanding shares of Common
Stock which complies with the provisions of Section 11(a)(ii) hereof (or
a wholly owned Subsidiary of any such Person or Persons), (ii) the price
per share of Common Stock offered in such transaction is not less than
the price per share of Common Stock paid to all holders of shares of
Common Stock whose shares were purchased pursuant to such tender offer
or exchange offer, and (iii) the form of consideration being offered to
the remaining holders of shares of Common Stock pursuant to such
transaction is the same as the form of consideration paid pursuant to
such tender offer or exchange offer. Upon consummation of any such
transaction contemplated by this Section 13(d), all Rights hereunder
shall expire.
14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution date as provided in Section 11(p), or
to distribute Rights Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to the same
fraction of the Current Market Value of a whole Right. For 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 would have been otherwise
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 or admitted to
trading on the National Market System of NASDAQ or, if the Rights are
not listed or admitted to trading on the National Market System of
NASDAQ, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to
trading, or if the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by NASDAQ or such other system then in
use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date
no such market maker is making a market in the Rights the fair value of
the Rights on such date as determined in good faith by the Board of
Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates
which evidence fractional shares of Common Stock. In lieu of fractional
shares of Common Stock the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as herein
provided an amount in cash equal to the same fraction of the Current
Market Value of one share of Common Stock. For purposes of this
Section 14(b), the Current Market Value of one share of Common Stock
shall be the closing price of a share of Common Stock (as determined
pursuant to Section 11(d)) for the Trading Day immediately prior to the
date of such exercise.
(c) The holder of a Right by the acceptance of the Rights expressly
waives his right to receive any fractional Rights or any fractional
shares upon exercise of a Right, except as permitted by this Section 14.
15. Rights of Action.
All rights of action in respect of this Agreement, other than rights of
action vested in the Rights Agent pursuant to Section 18, are vested in
the respective registered holders of the Rights Certificates (and, prior
to the Distribution Date, the registered holders of the Common Stock);
and any registered holder of any Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), without the consent of the
Rights Agent or of the holder of any other Rights Certificate (or, prior
to the Distribution Date, of the Common Stock), may, in his own behalf
and for his own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise
act in respect of, his right to exercise the Rights evidenced by such
Rights Certificate in the manner provided in such Rights Certificate and
in this Agreement. Without limiting the foregoing or any remedies
available to the holders of Rights, it is specifically acknowledged that
the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or
threatened violations of the obligations hereunder of any Person subject
to this Agreement.
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 will be transferable only
in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office or offices of the Rights Agent designated for
such purposes, duly endorsed or accompanied by a proper instrument of
transfer and with the appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f), the Company and the Rights
Agent may deem and treat the person in whose name a Rights Certificate
(or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agents)
for all purposes whatsoever, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7(e), shall be required
to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither
the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any
of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court
of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts to have any
such order, decree or ruling lifted or otherwise overturned as soon as
possible.
17. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate shall be entitled to vote,
receive dividends or be deemed for any purposes the holder of the number
of shares of Common Stock or any other securities of the Company which
may at any time be issuable on the exercise of the Rights represented
thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the Company
or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 25),
or to receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions hereof.
18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder as set forth in a
separately executed written fee agreement. The Company also agrees to
indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, or expense, incurred without gross negligence or
willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no liability for
or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon
any Rights Certificate or certificate for Common Stock or for other
securities of the Company, instrument of assignment or transfer, power
of attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
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 or stock transfer business
of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the
parties hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 21. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the
Rights Certificates shall have been countersigned but not delivered, any
such successor Rights Agent may adopt the countersignature of a
predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the
predecessor or in the name of the successor Rights Agent; and in all
such cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name; and
in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
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 Rights Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring
Person and the determination of Current Market Price) be proved or
established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by the Chairman of the
Board, the Chief Executive Officer, 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 or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of the
statements of fact or recitals contained in this Agreement or in the
Rights Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), 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 hereof by the Rights Agent) or in respect of
the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any
adjustment required under the provisions of Section 11 or Section 13 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
Rights Certificates after receipt of the certificate described in
Section 12 setting forth any such adjustment); nor shall it by any act
hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of Common Stock to be issued
pursuant to this Agreement or any Rights Certificates or as to whether
any shares of Common Stock will, when so issued, be validly authorized
and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered
all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder
from the Chairman of the Board or the President of the Company or any
other officer of the Company designated to the Rights Agent in writing
by the Chairman of the Board, the Chief Executive Officer or the
President 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.
(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
or any such attorneys or agents or for any loss to the Company resulting
from any such act, default, neglect or misconduct; provided, however,
reasonable care was exercised in the selection and continued employment
thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder or in the exercise of
its rights if there shall be reasonable grounds for believing that
repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights
Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase as the case may be, has
either not been completed or indicates an affirmative response to clause
1 and/or 2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise of transfer without first
consulting with the Company.
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 thirty (30) days'
notice in writing mailed to the Company, and to each transfer agent of
the Common Stock by registered or certified mail, and to the holders of
the Rights Certificates by first-class mail. The Company may remove the
Rights Agent or any successor Rights Agent (with or without cause) upon
thirty (30) days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent
of the Common Stock, by registered or certified mail, and to the holders
of the Rights 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
thirty (30) 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 Rights
Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then the incumbent Rights Agent or any
registered holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a
court, shall be a corporation organized and doing business under the
laws of the United States or of any other state of the United States in
good standing, which is authorized under such laws to exercise corporate
trust or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the time of
its appointment as Rights Agent a combined capital and surplus deemed by
the Company's Board of Directors to be reasonable under the
circumstances. 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
Stock, and mail a notice thereof in writing to the registered holders of
the Rights Certificates. Failure to give any notice provided for n 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 Agents as the case may be.
22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights
to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its
Board of Directors to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other securities or
property purchasable under the Rights Certificates made in accordance
with the provisions of this Agreement. In addition, in connection with
the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to shares of Common Stock 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 hereinafter 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 Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that
such issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Rights
Certificate would be issued, and (ii) no such Rights Certificate shall
be issued if, and to the extent that, appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
23.Redemption and Termination.
(a) The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the Close of Business on the tenth
(10th) day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the Close
of Business on the tenth (10th) day following the Record Date), subject
to extension as provided in Section 27 or (ii) the Close of Business on
the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $.001 per Right, as such
amount may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such
redemption price being hereinafter referred to as the "Redemption
Price"). Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the occurrence of an
event described in Section 11(a)(ii) until such time as the Company's
right of redemption hereunder has expired. The Company may, at its
option, pay the Redemption Price in cash, shares of Common Stock (based
on the Current Market Price, as defined in Section 11(d)(i), of the
Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors. Such
redemption of the Rights by the Company may be made effective at such
time, on such basis and with such conditions as the Board of Directors
in its sole discretion may establish; provided, however, that any
redemption of Rights occurring as of or after the time a Person becomes
an Acquiring Person may be effected, and the method of payment of the
redemption price and conditions to redemption may be determined, only by
the Company's Board of Directors acting by Special Vote.
(b)Immediately upon the action of the Board of Directors of the Company
ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights will terminate
and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price for each Right so held, without any
interest thereon. Promptly after the action of the Board of Directors
ordering the redemption of the Rights, the Company shall give notice of
such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at each
holder's last address as it appears upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books
of the Transfer Agent for the Common Stock. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made.
The failure to give notice required by this Section 23(b) or any defect
therein shall not affect the legality or validity of the action taken by
the Company.
24. Exchange.
(a) Subject to applicable laws, rules and regulations, and subject to
subsection (c) below, at any time after the occurrence of a Triggering
Event, the Board of Directors of the Company, acting by Special Vote,
may cause the Company to 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(e)) for Common Stock at an
exchange ratio of one share of Common Stock 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 "Ratio of Exchange"). Notwithstanding
the foregoing, the Board of Directors shall not be empowered to effect
such exchange at any time after any Person (other than an Exempt
Person), together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the Common Stock then
outstanding.
(b)Immediately upon the action of the Board of Directors ordering the
exchange of any Rights pursuant to subsection (a) of this Section 24 and
without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of
such Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied by the
Ratio of Exchange. The Company shall give public notice of any such
exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company
shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of
the Rights Agent. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by which the
exchange of the Common Stock for Rights will be effected and, in the
event of any partial exchange, the number of Rights that 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(e)) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Stock
authorized but unissued to permit any exchange of Rights as contemplated
in accordance with Section 24(a), the Company shall either take such
action as may be necessary to authorize additional shares of Common
Stock for issuance upon exchange of the Rights or alternatively, at the
option of the Board of Directors acting by Special Vote, with respect to
each Right (i) pay cash in an amount equal to the Current Value (as
hereinafter defined), in lieu of issuing Common Stock in exchange
therefor, or (ii) issue debt or equity securities or a combination
thereof, having a value equal to the Current Value, in lieu of issuing
Common Stock in exchange for each such Right, where the value of such
securities shall be determined by a nationally recognized investment
banking firm selected by the Board of Directors acting by Special Vote,
or (iii) deliver any combination of cash, property, Common Stock and/or
other securities having a value equal to the Current Value in exchange
for each Right. For purposes of this Section 24(c) only, the "Current
Value" shall mean the product of the current per share market price of
Common Stock (determined pursuant to Section 11(d) on the date of the
occurrence of the event described above in subparagraph (a)) multiplied
by the number of shares of Common Stock for which the Right otherwise
would be exchangeable if there were sufficient shares available. To the
extent that the Company determines that some action need be taken
pursuant to clauses (i), (ii), or (iii) of this Section 24(c), the Board
of Directors acting by Special Vote may temporarily suspend the
exercisability of the Rights for a period of up to sixty (60) days
following the date on which the event described in Section 24(a) shall
have occurred, in order to seek any authorization of additional Common
Stock and/or to determine the appropriate form of distribution to be
made pursuant to the above provision and to determine the value thereof.
In the event of any such suspension, the Company shall issue a public
announcement stating that the exercisability of the Rights has been
temporarily suspended.
(d) The Company shall not be required to issue fractions of Common Stock
or to distribute certificates that evidence fractional Common Stock. In
lieu of such fractional Common Stock, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional Common Stock would otherwise be issuable, an amount in cash
equal to the same fraction of the current per share market value of a
whole Common Stock (as determined pursuant to Section 11(d)).
(e) The Company may, at the option of the Board of Directors acting by
Special Vote, at any time before any Person has become an Acquiring
Person, exchange all or part of the then outstanding Rights for rights
of substantially equivalent value, as determined reasonably and with
good faith by the Board of Directors acting by Special Vote, based upon
the advice of one or more nationally recognized investment banking
firms.
(f) Immediately upon the action of the Board of Directors acting by
Special Vote ordering the exchange of any Rights pursuant to
subsection (e) of this Section 24 and without any further action and
without any notice, the right to exercise such Rights shall terminate
and the only right thereafter of a holder of such Rights shall be to
receive that number of rights in exchange therefore as has been
determined by the Board of Directors in accordance with subsection (e)
above. The Company shall give public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company
shall mail a notice of any such exchange to all of the holders of such
Rights at their last addresses as they appear upon the registry books of
the transfer agent for the Common Stock of the Company. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Rights will
be effected.
25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class
to the holders of Common Stock or to make any other distribution to the
holders of Common Stock (other than a cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of
Common Stock rights or warrants to subscribe for or to purchase any
additional shares of Common Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any
reclassification of its Common Stock (other than a reclassification
involving only the subdivision of outstanding shares of Common Stock),
or (iv) to effect any consolidation or merger into or with any other
Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o)), or to effect any sale or other transfer
(or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one transaction or a series of related transactions,
of more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other
than the Company and/or any of its Subsidiaries in one or more
transactions each of which complies with Section 11(o)), or (v) to
effect the liquidation, dissolution or winding up of the Company, then,
in each such case, the Company shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with Section 26, a
notice of such proposed action, which shall specify the record date for
the purposes of such stock dividend, distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of the shares of Common
Stock, 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 ten (10) days prior to the record date for determining holders of
the shares of Common Stock for purposes of such action, and in the case
of any such other action, at least ten (10) days prior to the date of
the taking of such proposed action or the date of participation therein
by the holders of the shares of Common Stock whichever shall be the
earlier. The failure to give notice required by this Section 25 or any
defect therein shall not affect the legality or validity of the action
taken by the Company or the vote upon any such action.
(b) In case any of the events set forth in Section 11(a)(ii) shall
occur, then, in any such case, (i) the Company shall as soon as
practicable thereafter give to each holder of a Rights Certificate, to
the extent feasible and in accordance with Section 26, a notice of the
occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii),
and (ii) all references in the preceding paragraph to Common Stock shall
be deemed thereafter to refer to Common Stock and/or, if appropriate,
other securities.
26. Notices.
Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Rights Certificate to or on the
Company shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Xxxxxxxx, Inc.
0000 Xxxxx Xxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
Subject to the provisions of Section 21, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of
any Rights Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Company) as follows:
American Securities Transfer & Trust, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Xx. Xxx Xxxxxxx
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate
(or, if prior to the Distribution Date, to the holder of certificates
representing shares of Common Stock) 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
Transfer Agent.
27. Supplements and Amendments.
Prior to the Distribution Date and subject to the penultimate sentence
of this Section 27, the Board of Directors of the Company may, in its
sole and absolute discretion and the Rights Agent shall, if the Board of
Directors so directs, supplement or amend any provision of this
Agreement without the approval of any holders of certificates
representing shares of Common Stock, whether or not such supplement or
amendment is adverse to any holders of Rights. From and after the
Distribution Date, and subject to the penultimate sentence of this
Section 27, the Board of Directors acting by Special Vote may, and the
Rights Agent shall, if the Board of Directors acting by Special Vote so
directs, supplement or amend this Agreement without the approval of any
holders of Rights Certificates in order to (i) cure any ambiguity,
(ii) correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions hereunder,
(iii) shorten or lengthen any time period hereunder, or (iv) otherwise
change or supplement the provisions hereunder in any manner which the
Board of Directors acting by Special Vote may deem necessary or
desirable and which shall not materially and adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring
Person or an Affiliate or Associate of any such Person); provided,
however, this Agreement may not be supplemented or amended after the
Distribution Date to (A) make the Rights again redeemable after the
Rights have ceased to be redeemable, or (B) change any other time period
unless such change is for the purpose of protecting, enhancing or
clarifying the rights of, and/or the benefits to the holders of Rights
(other than any Acquiring Person and its Associates or Affiliates).
Upon the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in
compliance with the terms of this Section 27, the Rights Agent shall
execute such supplement or amendment. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or amendment
shall be made which changes the Redemption Price. Prior to the
Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Common Stock.
28.Successors.
All the covenants and provisions of this Agreement by or for the benefit
of the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
29. Determination and Actions by the Board of Directors, etc.
For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding
shares of Common Stock 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.
The Board of Directors of the Company (acting by Special Vote where
specifically provided for herein) 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 of the Company or
to the Company, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation, the
right and power to (i) interpret the provisions of this Agreement, and
(ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including, but not limited to, a
determination to redeem or not redeem the Rights, or to amend 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 of the Company 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 any member of the
Board of Directors to any liability to the holders of the Rights or to
any other Person.
30. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any Person other
than the Company, the Rights Agent and the registered holders of the
Rights Certificates (and, prior to the Distribution Date, registered
holders of the Common Stock) 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 Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
31. Severability.
If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other authority to be
invalid, void or unenforceable, the remainder of the terms, provisions,
covenants and restrictions of this Agreement shall remain in full force
and effect and shall in no way be affected, impaired or invalidated;
provided, however, that 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 (acting by Special Vote)
determines in its good faith judgment that severing the invalid language
from this Agreement would adversely affect the purpose or effect of this
Agreement, the right of redemption set forth in Section 23, if lapsed,
shall be reinstated and shall not expire until the Close of Business on
the tenth (10th) Business Day following the date of such determination
by the Board of Directors of the Company.
32.Governing Law.
This Agreement, each Right and each Rights Certificate issued hereunder
shall be deemed to be a contract made under the laws of the State of
Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts made and
to be performed entirely within such State.
33. Counterparts.
This Agreement may be executed in any number of counterparts and each of
such counterparts shall for all purposes be deemed to be an original,
and all such counterparts shall together constitute but one and the same
instrument.
34.Descriptive Headings; References.
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. References
herein to Sections and Exhibits shall, unless otherwise specified, be to
the referenced section or exhibit hereof or hereto.
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.
The "Company":
XXXXXXXX, INC.
By: /s/ XXXXXXX X. XXXXXX, XX.
Xxxxxxx X. Xxxxxx, Xx.
President & Chief Executive
Officer
The "Rights Agent":
AMERICAN SECURITIES TRANSFER &
TRUST, INC.
By: /s/ XXXXX X. XXXXXXXX
Xxxxx X. Xxxxxxxx
Vice President/Trust Officer
Exhibit A
FORM OF RIGHTS CERTIFICATE
Certificate No. R____________________________ Rights
NOT EXERCISABLE AFTER OCTOBER 5, 2008 OR EARLIER IF REDEEMED OR EXCHANGED
BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF
THE COMPANY, AT $.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS
SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER
OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS
RIGHTS 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 RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL
AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.]
RIGHTS CERTIFICATE
XXXXXXXX, INC.
This certifies that ___________________________________, or registered
assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement, dated as of October 6, 1998 (the
"Rights Agreement"), between Xxxxxxxx, Inc., a Delaware corporation (the
"Company"), and American Securities Transfer & Trust, Inc., a Colorado
corporation (the "Rights Agent"), to purchase from the Company at any time
prior to 5:00 P.M. (California time) on October 5, 2008 at the office or
offices of the Rights Agent designated for such purpose, or its successors
as Rights Agent, one share of Common Stock (the "Common Stock") of the
Company, at a purchase price of $40 per share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form of
Election to Purchase and related Certificate duly executed. The Purchase
Price may be paid by bank draft, certified bank check or money order
payable to the order of the Company.
* The portion of the ledgend in brackets shall be inserted only if
applicable, shall be modified to apply to an Acquiring Person, shall
replace the preceding sentence.
The number of Rights evidenced by this Rights Certificate (and the
number of shares which may be purchased upon exercise thereof) set forth
above, and the Purchase Price per share set forth above, are the number
and Purchase Price as of October 6, 1998, based on the Common Stock as
constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such term is
defined in the Rights Agreement), if the Rights evidenced by this Rights
Certificate are beneficially owned by (i) an Acquiring Person or an
Affiliate or Associate an Acquiring of Person (as such terms are
defined in the Rights Agreement), (ii) a transferee of an Acquiring
Person, (or of any such Associate or Affiliate), or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming
such, 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 Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Common Stock or other securities which may be
purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the
happening of certain events, including Triggering Events (as such term
is defined in the Rights Agreement).
The Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the Rights, limitations of Rights, and obligations,
duties and immunities of the Rights Agent, the Company and the holders
of the Rights Certificates, which limitations of Rights include the
temporary suspension of the exercisability of such Rights under the
specific circumstances set forth in the Rights Agreement. Copies of the
Rights Agreement are on file at the office of the Rights Agent and are
also available upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office or offices of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate amount of securities as the Rights
evidenced by the Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate
shall be exercised in part, the holder shall be entitled to receive upon
surrender hereof another Rights Certificate or Rights Certificates for
the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be (i) redeemed by the Company at its option at
a redemption price of $.001 per Right or (ii) exchanged by the Company
in whole or part for Common Shares, substantially equivalent rights, or
other consideration as determined by the Company.
No fractional shares of Common Stock will be issued upon the exercise of
any Right or Rights evidenced hereby, but in lieu thereof a cash payment
will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares
of Common Stock or of any other securities of the Company which may at
any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed to confer upon
the holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or, to receive notice of
meeting or other actions affecting stockholders (except as provided in
the Rights Agreement), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights
Agreement.
The Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of _____________, _____
The "Company":
(Seal) XXXXXXXX, INC., a Delaware corporation
By:___________________________________
Name:_________________________________
Title: _______________________________
By:___________________________________
Name:_________________________________
Title:________________________________
The "Rights Agent":
AMERICAN SECURITIES TRANSFER & TRUST, INC.,
a Colorado corporation
By:___________________________________
Name:_________________________________
Title:________________________________
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder
if such holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _____________________________________ hereby sells,
assigns and transfers unto______________________________________
______________________________________
______________________________________
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
________________________________________ Attorney, to transfer the
within Rights Certificate on the books of the within-named Company with
full power of substitution.
DATED: _____________________ _________________________________
(Signature)
SIGNATURE GUARANTEED:
_________________________________
(Signature)
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) This Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms
are defined pursuant to the Rights Agreement);
(2) After due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of any such
Person.
DATED: _____________________ _____________________________
(Signature)
SIGNATURE GUARANTEED:
______________________________
(Signature)
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or
any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
TO:XXXXXXXX, INC.
The undersigned hereby irrevocably elects to exercise
_______________________ Rights represented by this Rights Certificate to
purchase the number of shares of Common Stock issuable upon the exercise
of the Rights (or such other securities of the Company or of any other
Person which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name of and
delivered to:
Name and Address: ________________________________________
________________________________________
________________________________________
Social Security or
Other Identifying Number: ________________________________
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
Name and Address: _________________________________________
_________________________________________
_________________________________________
Social Security or
Other Identifying Number: ________________________________
DATED: _____________________ _____________________________
(Signature)
SIGNATURE GUARANTEED:
______________________________
(Signature)
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes that:
(1) This Rights Certificate [ ] is [ ] is not being sold, assigned
and transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such terms
are defined pursuant to the Rights Agreement);
(2) After due inquiry and to the best knowledge of the undersigned,
the undersigned [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or subsequently
became an Acquiring Person or an Affiliate or Associate of any such
Person.
DATED: _____________________ _________________________________
(Signature)
SIGNATURE GUARANTEED:
___________________________________
(Signature)
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or
any change whatsoever.
Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
of
XXXXXXXX, INC.
On September 23, 1998 (the "Rights Dividend Declaration Date") the Board
of Directors of Xxxxxxxx, Inc. (the "Company") declared a dividend of
one Right (a "Right") for each outstanding share of Company Common Stock
to be distributed to stockholders of record at the close of business on
October 11, 1998. In addition, one Right (as such number may be
adjusted pursuant to the provisions of the Rights Agreement) shall be
distributed with all shares of Company Common Stock subsequently issued,
but prior to the earliest of the Distribution Date (as described below)
or the expiration date. Each Right entitles the registered holder to
purchase from the Company one share of Common Stock, par value $.001 per
share of the Company (the "Common Stock") and, under certain
circumstances, other securities, at a "Purchase Price" of $40, subject
to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement (the "Rights Agreement") between the Company and
American Securities Transfer & Trust, Inc., as Rights Agent.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A
dated October 9, 1998. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the Rights
does not purport to be complete and is qualified in its entirety by
reference to the Rights Agreement, which is incorporated herein by
reference. A more detailed summary is also attached to the Form 8-A and
to the Company's current report on Form 8-K filed with the SEC in
connection with the adoption of the rights plan, and can be viewed on
the SEC's web site at xxx.xxx.xxx or obtained from the Company upon
request.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights
Certificates will be distributed. Until the Distribution Date (as
described below), (i) the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such Common
Stock certificates, (ii) new Common Stock certificates issued after
October 11, 1998 will contain a notation incorporating the Rights
Agreement by reference and (iii) 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
such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on October 5, 2008, unless earlier
redeemed or exchanged by the Company as described below.
The Rights will separate from the Common Stock and a Distribution Date
will occur (the "Distribution Date") upon the earlier of 10 days (or
such longer time as may be determined by the Company's board, acting
with the approval of a majority of the Continuing Directors as defined
below) following (i) a public announcement (or determination by the
Company's board) that a person or group of affiliated or associated
persons (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 "Stock Acquisition Date"), or (ii) the commencement
of a tender offer or exchange offer that would result in a person or
group beneficially owning 15% or more of such outstanding shares of
Common Stock.
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close
of business on the Distribution Date and, thereafter, the separate
Rights Certificates alone will represent the Rights.
In the event that on or at any time following the Rights Dividend
Declaration Date, a person becomes the beneficial owner of more than 15%
of the then outstanding shares of Common Stock (except pursuant to an
offer for all outstanding shares of Common Stock which the Continuing
Directors determine to be fair to and otherwise in the best interests of
the Company and its stockholders), then each holder of a Right will
thereafter 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 of the
Right. Rights are exercisable following the occurrence of the foregoing
only after such time as the Rights are no longer redeemable by the
Company, as set forth below. Notwithstanding any of the foregoing,
following the occurrence of the event set forth in this paragraph, all
Rights that are, or (under certain circumstances specified in the Rights
Agreement) were, beneficially owned by any Acquiring Person will be null
and void. If the Company does not have sufficient shares of Common
Stock available for all Rights to be exercised, the Company may
substitute for all or any portion of the Common Stock that would be
issuable upon exercise of the Rights, cash, assets, or other securities
having the same aggregate value as such Common Stock. The Rights are
exercisable as described in this paragraph only after the Company's
right of redemption (as described below) has expired.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger or other business combination
transaction in which the Company is not the surviving corporation or in
which the Company's outstanding Common Stock is exchanged for cash,
stock or other property (other than a merger which follows an offer for
all outstanding shares as described in the preceding paragraph), or (ii)
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 company having a
value equal to two times the Purchase Price of the Right.
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 dilution, as set
forth in the Rights Agreement. With certain exceptions, no adjustment
in the Purchase Price will be required until cumulative adjustments
amount to at least 1% of the Purchase Price. No fractional Rights or
fractional shares of Common Stock will be issued and, in lieu thereof,
an adjustment in cash will be made based on the market price of the
Rights or Common Stock, respectively, on the last trading date prior to
the date of exercise.
In general, the Company may redeem the Rights in whole, but not in part,
at a price of $.001 per Right, at any time until ten days following the
Stock Acquisition Date (or such later date as may be determined by the
Company's board, acting with the approval of a majority of the
Continuing Directors, as defined below). 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 $.001 redemption price.
At any time after a person becomes beneficial owner of 15% or more of
the Common Stock then outstanding, and prior to the first date upon
which that person becomes the beneficial owner of at least 50% of the
outstanding Common Stock, the Company may, by majority vote of each of
the board of directors and the Continuing Directors, exchange all of the
outstanding Rights (other than those that have become void) for shares
of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted for splits, dividends, and similar
transactions (the "Ratio of Exchange"). Immediately upon the action of
the Board of Directors ordering the exchange of the Rights, the Rights
will terminate and the only right of the holders of Rights will be to
receive the number of Common Shares equal to the Ratio of Exchange.
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.
Other than those provisions relating to the redemption price of the
Rights, any of the provisions of the Rights Agreement may be
supplemented or amended by the Board of Directors prior to the
Distribution Date, without approval of the Rights holders, whether or
not a supplement or amendment is adverse to the Rights holders. After
the Distribution Date, the provisions of the Rights Agreement (other
than the provisions relating to the redemption price or the final
expiration date of the Rights) may be amended by the Board of Directors,
with the approval of a majority of the Continuing Directors, in order
to make changes which do not materially and adversely affect the
interests of holders of Rights (excluding the interests of any Acquiring
Person), provided, however, that the Rights Agreement may not be amended
to (i) make the Rights again redeemable after the Rights have ceased to
be redeemable, or (ii) change any other time period unless such change
is for the benefit of the holders (excluding any Acquiring Person).
"Continuing Director" means a member of the Board of Directors of the
Company who is not an Acquiring Person or an affiliate or representative
of an Acquiring Person.
