Exhibit 4.1
EXECUTION COPY
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RIGHTS AGREEMENT
dated as of July 30, 2001
between
XXXXXX HOLDINGS, INC.
and
MELLON INVESTOR SERVICES LLC
as Rights Agent
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TABLE OF CONTENTS
SECTION PAGE
1. Certain Definitions .............................................. 1
2. Appointment of Rights Agent ...................................... 10
3. Issue of Rights and Right Certificates ........................... 10
4. Form of Right Certificates ....................................... 13
5. Execution, Countersignature and Registration ..................... 13
6. Transfer, Split-Up, Combination and
Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen
Right Certificates; Uncertificated
Rights ........................................................... 14
7. Exercise of Rights; Expiration Date of Rights .................... 15
8. Cancellation and Destruction of Right Certificates ............... 18
9. Reservation and Availability of Preferred Shares ................. 19
10. Preferred Shares Record Date ..................................... 21
11. Adjustments in Rights After There Is an
Acquiring Person; Exchange of Rights for
Shares; Business Combinations .................................... 21
12. Certain Adjustments .............................................. 27
13. Certificate of Adjustment ........................................ 29
14. Additional Covenants ............................................. 29
15. Fractional Rights and Fractional Shares .......................... 30
16. Rights of Action ................................................. 31
17. Transfer and Ownership of Rights and
Right Certificates ............................................... 32
18. Right Certificate Holder Not Deemed
a Stockholder .................................................... 33
19. Concerning the Rights Agent ...................................... 33
20. Merger or Consolidation or Change
of Rights Agent .................................................. 34
21. Duties of Rights Agent ........................................... 35
22. Change of Rights Agent ........................................... 38
23. Issuance of Additional Rights and
Right Certificates ............................................... 39
24. Redemption and Termination ....................................... 40
25. Notices .......................................................... 41
26. Supplements and Amendments ....................................... 42
27. Successors ....................................................... 43
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28. Benefits of
Rights Agreement;
Determinations and Actions by the
Board of Directors, etc. ......................................... 43
29. Severability ..................................................... 44
30. Governing Law .................................................... 44
31. Counterparts; Effectiveness ...................................... 44
32. Descriptive Headings ............................................. 45
EXHIBITS
A Certificate of Designation
B Form of Right Certificate
C Summary of Rights
RIGHTS AGREEMENT dated as of July 30, 2001,
between XXXXXX HOLDINGS, INC., a Delaware corporation
(the "COMPANY"), and MELLON INVESTOR SERVICES LLC, a
New Jersey limited liability company, as Rights Agent
(the "RIGHTS AGENT").
The Board of Directors of the Company (the "BOARD OF
DIRECTORS") has authorized and declared a dividend of one Right (as hereinafter
defined) for each share of Common Stock, par value $0.01 per share, of the
Company (the "COMMON STOCK") outstanding at the Close of Business (as
hereinafter defined) on August 5, 2001 (the "RECORD DATE"), and has authorized
the issuance of one Right (as such number may hereafter be adjusted pursuant to
the provisions of this
Rights Agreement) with respect to each share of Common
Stock that shall become outstanding between the Record Date and the earliest of
the Distribution Date, the Redemption Date, the Exchange Date, to the extent
applicable, or the Expiration Date (as such terms are hereinafter defined);
PROVIDED, HOWEVER, that Rights may be issued with respect to shares of Common
Stock that shall become outstanding after the Distribution Date and prior to the
earliest of the Redemption Date, the Exchange Date, to the extent applicable, or
the Expiration Date in accordance with the provisions of Section 23. Each Right
shall initially represent the right to purchase one one-thousandth (1/1,000th)
of a share of Series A Participating Cumulative Preferred Stock, par value $0.01
per share, of the Company (the "PREFERRED SHARES"), having the powers, rights
and preferences set forth in the Certificate of Designation attached as Exhibit
A.
Accordingly, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this
Rights
Agreement, the following terms have the meanings indicated:
"ACQUIRING PERSON" shall mean any Person who or which, alone
or together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of more than 15% of the Common Shares then outstanding, but
shall not include (a)(i) the Company, any Subsidiary of the Company, any
employee benefit or compensation plan of the Company or of any of its
Subsidiaries or any Person holding Common Shares for or pursuant to the terms of
any such employee
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benefit or compensation plan or for the purpose of funding other employee
benefits for employees of the Company or of any Subsidiary of the Company and
(ii) until immediately after the distribution of the Common Shares of the
Company by the sole stockholder of the Company, Xxxxxxx-Xxxxx Squibb Company
("XXXXXXX-XXXXX SQUIBB"), to the stockholders of Xxxxxxx-Xxxxx Squibb,
Xxxxxxx-Xxxxx Squibb or any Affiliate or Associate thereof, (each Person covered
by clauses (a)(i) and (a)(ii), an "EXEMPT PERSON") or (b) any such Person that
the Board of Directors of the Company determines has become the Beneficial Owner
of more than 15% of the Common Shares at the time outstanding solely as the
result of (i) a change in the aggregate number of Common Shares outstanding
since the last date on which such Person acquired Beneficial Ownership of any
Common Shares (PROVIDED, HOWEVER, that if a Person becomes the Beneficial Owner
of more than 15% of the Common Shares then outstanding by reason of such change
in the aggregate number of Common Shares outstanding and thereafter becomes the
Beneficial Owner of any additional Common Shares (other than pursuant to a
dividend or distribution paid or made by the Company on the outstanding Common
Shares or pursuant to a split or subdivision of the outstanding Common Shares),
then such Person shall be deemed to be an "Acquiring Person" unless upon
becoming the Beneficial Owner of such additional Common Shares such Person does
not beneficially own more than 15% of the shares of Common Shares then
outstanding), (ii) the acquisition by such Person or one or more of its
Affiliates or Associates of Beneficial Ownership of additional Common Shares if
such acquisition was made in the good faith belief that such acquisition would
not (A) cause the Beneficial Ownership by such Person, together with its
Affiliates and Associates, to exceed 15% of the Common Shares outstanding at the
time of such acquisition and such good faith belief was based on the good faith
reliance on information contained in publicly filed reports or documents of the
Company that are inaccurate or out-of-date or (B) otherwise cause a Distribution
Date or the adjustment provided for in Section 11(a) to occur, or (iii) the
acquisition by such Person or one or more of its Affiliates or Associates of
Beneficial Ownership of additional Common Shares if the Board of Directors of
the Company determines that such acquisition was made in good faith without the
knowledge by such Person or one or more of its Affiliates or Associates that
such Person would thereby become an Acquiring Person and without the intention
of changing or influencing control of the Company (including, without
limitation, because (A) such Person was unaware that it beneficially owned a
percentage of Common Shares that would otherwise cause such Person to be an
Acquiring Person or (B) such Person was aware of the extent of its Beneficial
Ownership of Common
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Shares but had no actual knowledge of the consequences of such Beneficial
Ownership under this
Rights Agreement), which determination of the Board of
Directors of the Company shall be conclusive and binding on such Person, the
Rights Agent, the holders of the Rights and all other Persons. Notwithstanding
clause (b)(ii) or (b)(iii) of the prior sentence, if any Person that is not an
Acquiring Person due to such clause (b)(ii) or (b)(iii) does not reduce its
percentage of Beneficial Ownership of Common Shares to 15% or less by the Close
of Business on the tenth calendar day, or such other calendar day as determined,
in good faith, by the Board of Directors of the Company, after notice from the
Company (the date of notice being the first day) that such Person's Beneficial
Ownership of Common Shares would make it an Acquiring Person, such Person shall,
at the end of such ten calendar day period, become an Acquiring Person (and such
clause (b)(ii) or (b)(iii) shall no longer apply to such Person). For purposes
of this definition, the determination whether any Person acted in "good faith"
shall be conclusively determined by the Board of Directors of the Company.
"AFFILIATE" and "ASSOCIATE", when used with reference to any
Person, shall have the respective meanings ascribed to such terms in Rule 12b-2
of the General Rules and Regulations under the Exchange Act, as in effect on the
date of this
Rights Agreement.
A Person shall be deemed the "BENEFICIAL OWNER" of, and shall
be deemed to "BENEFICIALLY OWN", and shall be deemed to have "BENEFICIAL
OWNERSHIP" of, any securities:
(a) which such Person or any of such Person's Affiliates or
Associates is deemed to "beneficially own" within the meaning of Rule
13d-3 of the General Rules and Regulations under the Exchange Act, as
in effect on the date of this
Rights Agreement;
(b) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly: (i) the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (written or oral), or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or
options, or otherwise; PROVIDED, HOWEVER, that a Person shall not be
deemed under this clause (i) to be the Beneficial Owner of, or to
beneficially own, or to have Beneficial Ownership of, any securities
tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or
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any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange thereunder
or cease to be subject to withdrawal by the tendering security holder;
or (ii) the right to vote pursuant to any agreement, arrangement or
understanding (written or oral); PROVIDED, HOWEVER, that a Person
shall not be deemed under this clause (ii) to be the Beneficial Owner
of, or to beneficially own, any security if (A) the agreement,
arrangement or understanding (written or oral) to vote such security
arises solely from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation made generally
to all holders of Common Shares pursuant to, and in accordance with,
the applicable rules and regulations under the Exchange Act and (B)
the beneficial ownership of such security is not also then reportable
on Schedule 13D or 13G under the Exchange Act (or any comparable or
successor report); or
(c) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (written or oral) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in the
proviso to clause (b)(ii) of this definition) or disposing of any
securities of the Company; PROVIDED, HOWEVER, that no Person who is an
officer, director or employee of an Exempt Person shall be deemed,
solely by reason of such Person's status or authority as such, to be
the "Beneficial Owner" of, to have "Beneficial Ownership" of or to
"beneficially own" any securities that are "beneficially owned" (as
defined herein), including, without limitation, in a fiduciary
capacity, by an Exempt Person or by any other such officer, director
or employee of an Exempt Person.
Notwithstanding the foregoing, nothing contained in this definition shall cause
a Person ordinarily engaged in business as an underwriter of securities to be
deemed the "Beneficial Owner" of, or to "beneficially own", or to have
"Beneficial Ownership" of, any securities acquired in a bona fide firm
commitment underwriting pursuant to an underwriting agreement with the Company.
"BOOK VALUE", when used with reference to Common Shares issued
by any Person, shall mean the amount of equity of such Person applicable to each
Common Share, determined (a) in accordance with United States generally accepted
accounting principles in effect on the date as of which such
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Book Value is to be determined, (b) using all the consolidated assets and all
the consolidated liabilities of such Person on the date as of which such Book
Value is to be determined, except that no value shall be included in such assets
for goodwill arising from consummation of a Business Combination, and (c) after
giving effect to (i) the exercise of all rights, options and warrants to
purchase such Common Shares (other than the Rights), and the conversion of all
securities convertible into such Common Shares, at an exercise or conversion
price, per Common Share, which is less than such Book Value before giving effect
to such exercise or conversion (whether or not exercisability or convertibility
is conditioned upon occurrence of a future event), (ii) all dividends and other
distributions on the capital stock of such Person declared prior to the date as
of which such Book Value is to be determined and to be paid or made after such
date, and (iii) any other agreement, arrangement or understanding (written or
oral), or transaction or other action contemplated prior to the date as of which
such Book Value is to be determined that would have the effect of thereafter
reducing such Book Value.
"BUSINESS COMBINATION" shall have the meaning set forth in
Section 11(c)(i).
"BUSINESS DAY" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday that is not a day on which banking institutions in the
Borough of Manhattan, the City of
New York, are authorized or obligated by law
or executive order to close.
"CERTIFICATE OF DESIGNATION" shall mean the Certificate of
Designation of Series A Participating Cumulative Preferred Stock setting forth
the powers, preferences, rights, qualifications, limitations and restrictions of
such series of Preferred Stock of the Company, a copy of which is attached as
Exhibit A.
"CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m.,
Eastern time, on such date; PROVIDED, HOWEVER, that, if such date is not a
Business Day, "Close of Business" shall mean 5:00 p.m., Eastern time, on the
next succeeding Business Day.
"COMMON SHARES", when used with reference to the Company prior
to a Business Combination, shall mean the shares of Common Stock of the Company
or any other shares of capital stock of the Company into which the Common Stock
shall be reclassified or changed. "Common Shares", when used with reference to
any Person (other than the Company prior to a Business Combination), shall mean
shares of
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capital stock of such Person (if such Person is a corporation) of any class or
series, or units of equity interests in such Person (if such Person is not a
corporation) of any class or series, the terms of which do not limit (as a
maximum amount and not merely in proportional terms) the amount of dividends or
income payable or distributable on such class or series or the amount of assets
distributable on such class or series upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person and do not provide that
such class or series is subject to redemption at the option of such Person, or
any shares of capital stock or units of equity interests into which the
foregoing shall be reclassified or changed.
"COMMON STOCK" shall have the meaning set forth in the
introductory paragraph of this
Rights Agreement.
"COMPANY" shall have the meaning set forth in the heading of
this
Rights Agreement; PROVIDED, HOWEVER, that if there is a Business
Combination, "Company" shall have the meaning set forth in Section 11(c)(iii).
The term "CONTROL" with respect to any Person shall mean the
power to direct the management and policies of such Person, directly or
indirectly, by or through stock ownership, agency or otherwise, or pursuant to
or in connection with an agreement, arrangement or understanding (written or
oral) with one or more other Persons by or through stock ownership, agency or
otherwise; and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"DISTRIBUTION DATE" shall have the meaning set forth in
Section 3(b).
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as in effect on the date in question, unless otherwise specifically provided.
"EXCHANGE CONSIDERATION" shall have the meaning set forth in
Section 11(b)(i).
"EXPIRATION DATE" shall have the meaning set forth in Section
7(a).
"MAJOR PART", when used with reference to the assets of the
Company and its Subsidiaries as of any date, shall mean assets (a) having a fair
market value aggregating 50% or more of the total fair market value of all the
assets of the Company and its Subsidiaries (taken as a whole) as of
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the date in question, (b) accounting for 50% or more of the total value (net of
depreciation and amortization) of all the assets of the Company and its
Subsidiaries (taken as a whole) as would be shown on a consolidated or combined
balance sheet of the Company and its Subsidiaries as of the date in question,
prepared in accordance with United States generally accepted accounting
principles then in effect, or (c) accounting for 50% or more of the total amount
of earnings before interest, taxes, depreciation and amortization or of the
revenues of the Company and its Subsidiaries (taken as a whole) as would be
shown on, or derived from, a consolidated or combined statement of income or net
earnings of the Company and its Subsidiaries for the period of 12 months ending
on the last day of the Company's monthly accounting period next preceding the
date in question, prepared in accordance with United States generally accepted
accounting principles then in effect.
"MARKET VALUE", when used with reference to Common Shares or
Preferred Shares on any date, shall mean the average of the daily closing
prices, per share, of such Common Shares or Preferred Shares, as applicable, for
the period which is the shorter of (a) 30 consecutive Trading Days ending on the
Trading Day immediately prior to the date in question or (b) the number of
consecutive Trading Days beginning on the Trading Day immediately after the date
of the first public announcement of the event requiring a determination of the
Market Value of Common Shares or Preferred Shares, as applicable, and ending on
the Trading Day immediately prior to the record date of such event; PROVIDED,
HOWEVER, that, in the event that the Market Value of such Common Shares or
Preferred Shares, as applicable, is to be determined in whole or in part during
a period following the announcement by the issuer of such Common Shares or
Preferred Shares, as applicable, of any action of the type described in Section
12(a) that would require an adjustment thereunder, then, and in each such case,
the Market Value of such Common Shares or Preferred Shares, as applicable, shall
be appropriately adjusted to reflect the effect of such action on the market
price of such Common Shares or Preferred Shares, as applicable. The closing
price for each Trading Day shall be the closing price quoted on the composite
tape for securities listed on the
New York Stock Exchange, or, if such
securities are not quoted on such composite tape or if such securities are not
listed on such exchange, on the principal United States securities exchange
registered under the Exchange Act (or any recognized foreign stock exchange) on
which such securities are listed, or, if such securities are not listed on any
such exchange, the closing price quoted on The Nasdaq Stock Market or, if such
securities are not so quoted, the average
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of the closing bid and asked quotations with respect to a share of such
securities on any National Association of Securities Dealers, Inc. quotations
system or such other system then in use, or if no such quotations are available,
the average of the closing bid and asked prices as furnished by a professional
market maker making a market in such securities selected by the Board of
Directors of the Company, or if on any such Trading Day no market maker is
making a market in such securities, the closing price of such securities on such
Trading Day shall be deemed to be the fair value of such securities 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, the holders of Rights and all other
Persons); PROVIDED, HOWEVER, that for the purpose of determining the closing
price of the Preferred Shares for any Trading Day on which there is no such
market maker for the Preferred Shares the closing price on such Trading Day
shall be deemed to be the Formula Number (as defined in the Certificate of
Designation) multiplied by the closing price of the Common Shares of the Company
on such Trading Day.
"PERSON" shall mean an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization, firm or group or other entity and shall include any successor (by
merger or otherwise) of such entity.
"PREFERRED SHARES" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement. Any reference in this Rights
Agreement to Preferred Shares shall be deemed to include any authorized fraction
of a Preferred Share, unless the context otherwise requires.
"PRINCIPAL PARTY" shall mean the Surviving Person in a
Business Combination; PROVIDED, HOWEVER, that, (i) if such Surviving Person is a
direct or indirect Subsidiary of any other Person, "Principal Party" shall mean
the Person which is the ultimate parent of such Surviving Person and which is
not itself a Subsidiary of another Person, and (ii) in the event ultimate
control of such Surviving Person is shared by two or more Persons, "Principal
Party" shall mean that Person that is immediately controlled by such two or more
Persons.
"PURCHASE PRICE" with respect to each Right shall mean $140,
as such amount may from time to time be adjusted as provided herein, and shall
be payable in lawful money of the United States of America. All references
herein to the
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Purchase Price shall mean the Purchase Price as in effect at the time in
question.
"RECORD DATE" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement.
"REDEMPTION DATE" shall have the meaning set forth in Section
24(a).
"REDEMPTION PRICE" with respect to each Right shall mean
$0.01, as such amount may from time to time be adjusted in accordance with
Section 12. All references herein to the Redemption Price shall mean the
Redemption Price as in effect at the time in question.
"REGISTERED COMMON SHARES" shall mean Common Shares that are,
as of the date of consummation of a Business Combination, and have continuously
been for the 12 months immediately preceding such date, registered under Section
12 of the Exchange Act.
"RIGHT CERTIFICATE" shall mean a certificate evidencing a
Right in substantially the form attached as Exhibit B.
"RIGHTS" shall mean the rights to purchase Preferred Shares
(or other securities) as provided in this Rights Agreement.
"SECURITIES ACT" shall mean the Securities Act of 1933, as in
effect on the date in question, unless otherwise specifically provided.
"SUBSIDIARY" shall mean a Person, at least a majority of the
total outstanding voting power (being the power under ordinary circumstances
(and not merely upon the happening of a contingency) to vote in the election of
directors of such Person (if such Person is a corporation) or to participate in
the management and control of such Person (if such Person is not a corporation))
of which is owned, directly or indirectly, by another Person or by one or more
other Subsidiaries of such other Person or by such other Person and one or more
other Subsidiaries of such other Person.
"SURVIVING PERSON" shall mean (a) the Person which is the
continuing or surviving Person in a consolidation or merger specified in Section
11(c)(i)(A) or 11(c)(i)(B) or (b) the Person to which the Major Part of the
assets of the Company and its Subsidiaries is sold, leased, exchanged or
otherwise transferred or disposed of in a transaction
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specified in Section 11(c)(i)(C); PROVIDED, HOWEVER, that, if the Major Part of
the assets of the Company and its Subsidiaries is sold, leased, exchanged or
otherwise transferred or disposed of in one or more related transactions
specified in Section 11(c)(i)(C) to more than one Person, the "Surviving Person"
in such case shall mean the Person that acquired assets of the Company and/or
its Subsidiaries with the greatest fair market value in such transaction or
transactions.
"TRADING DAY" shall mean a day on which the principal national
securities exchange (or principal recognized foreign stock exchange, as the case
may be) on which any securities or Rights, as the case may be, are listed or
admitted to trading is open for the transaction of business or, if the
securities or Rights in question are not listed or admitted to trading on any
national securities exchange (or recognized foreign stock exchange, as the case
may be), a Business Day.
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Company may from time to time appoint one or more co-Rights
Agents as it may deem necessary or desirable (the term "Rights Agent" being used
herein to refer, collectively, to the Rights Agent together with any such
co-Rights Agents). In the event the Company appoints one or more co-Rights
Agents, the respective duties of the Rights Agent and any co-Rights Agents shall
be as the Company shall determine. The Rights Agent shall have no duty to
supervise, and in no event shall be liable for, the acts or omissions of any
such co-Rights Agents.
SECTION 3. ISSUE OF RIGHTS AND RIGHT CERTIFICATES. (a) One
Right shall be associated with each Common Share outstanding on the Record Date,
each additional Common Share that shall become outstanding between the Record
Date and the earliest of the Distribution Date, the Redemption Date, the
Exchange Date, to the extent applicable, or the Expiration Date and each
additional Common Share with which Rights are issued after the Distribution Date
but prior to the earliest of the Redemption Date, the Exchange Date, to the
extent applicable, or the Expiration Date as provided in Section 23; PROVIDED,
HOWEVER, that, if the number of outstanding Rights are combined into a smaller
or larger number of outstanding Rights pursuant to the terms hereof, the
appropriate number of Rights (or fraction thereof)
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determined pursuant to such Section shall thereafter be associated with each
such Common Share.
(b) Until the earlier of (i) such time as the Company learns
that a Person has become an Acquiring Person and (ii) the Close of Business on
such date, if any, as may be designated by the Board of Directors of the Company
following the commencement of, or first public disclosure of an intent to
commence, a tender or exchange offer by any Person (other than an Exempt Person)
for outstanding Common Shares, if upon consummation of such tender or exchange
offer such Person could be the Beneficial Owner of more than 15% of the
outstanding Common Shares (the Close of Business on the earlier of such dates
being the "DISTRIBUTION DATE"), (x) the Rights shall, except as otherwise
provided in Section 3(c), be evidenced by the certificates for Common Shares
registered in the names of the holders thereof and not by separate Right
Certificates, and (y) the Rights, including the right to receive Right
Certificates, will be transferable only in connection with the transfer of
Common Shares. The Company shall notify the Rights Agent in writing as promptly
as practicable that the Distribution Date has occurred and, if the Rights Agent
is not then also the transfer agent and registrar for the Common Shares, provide
the Rights Agent with the names and addresses of all record holders of Common
Shares (together with all other necessary information). Until written notice of
the occurrence of the Distribution Date is received by the Rights Agent from the
Company, the Rights Agent may presume conclusively for all purposes that the
Distribution Date has not occurred. As soon as practicable after the
Distribution Date, the Rights Agent shall send, by first-class, postage-prepaid
mail, to each record holder of Common Shares as of the Distribution Date, at the
address of such holder shown on the records of the Company, a Right Certificate
evidencing one whole Right for each Common Share (or for the number of Common
Shares with which one whole Right is then associated if the number of Rights per
Common Share held by such record holder has been adjusted in accordance with the
proviso in Section 3(a)). If the number of Rights associated with each Common
Share has been adjusted in accordance with the proviso in Section 3(a), at the
time of distribution of the Right Certificates the Company may make any
necessary and appropriate rounding adjustments so that Right Certificates
representing only whole numbers of Rights are distributed and cash is paid in
lieu of any fractional Right in accordance with Section 15(a). The Company shall
notify the Rights Agent in writing as promptly as practicable of any such
adjustments. As of and after the Distribution Date, the Rights shall be
evidenced solely by such Right Certificates.
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(c) As soon as practicable, and in any event no later than 30
days, after the Record Date, the Company will send a copy of a Summary of Rights
to Purchase Preferred Shares, in substantially the form attached hereto as
Exhibit C (the "SUMMARY OF RIGHTS"), by first-class, postage prepaid mail, to
each record holder of Common Shares as of the Close of Business on the Record
Date at the address of such holder shown on the records of the Company. With
respect to any certificate for Common Shares outstanding as of the Record Date,
until the earliest of the Distribution Date, the Redemption Date, the Exchange
Date, to the extent applicable, or the Expiration Date, (i) the Rights
associated with the Common Shares represented by any such certificate shall be
evidenced by such certificates for the Common Shares with a copy of the Summary
of Rights attached thereto and the registered holders of the Common Shares shall
also be the registered holders of the associated Rights and (ii) the surrender
for transfer of any such certificate, even without a copy of the Summary of
Rights attached thereto, shall also constitute the transfer of the Rights
associated with the Common Shares represented thereby.
(d) Certificates issued for Common Shares after the Record
Date (including upon transfer or exchange of outstanding Common Shares), but
prior to the earliest of the Distribution Date, the Redemption Date, the
Exchange Date, to the extent applicable, or the Expiration Date, shall have
printed on, written on or otherwise affixed to them the following legend or such
similar legend as the Company may deem appropriate and as is not inconsistent
with the provisions of this Rights Agreement:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement dated as of July
30, 2001 (as it may be amended from time to time (the "Rights
Agreement")), between Xxxxxx Holdings, Inc. (the "Corporation") and
Mellon Investor Services LLC, as Rights Agent (the "Rights Agent"),
the terms of which (including restrictions on the transfer of such
Rights) are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of the
Corporation. Under certain circumstances, as set forth in the Rights
Agreement, such Rights shall be evidenced by separate certificates and
shall no longer be evidenced by this certificate. The Corporation
shall mail to the holder of this certificate a copy of the Rights
Agreement without charge after receipt of a written request therefor.
RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS (AS SUCH TERM IS
DEFINED IN THE
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RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF ARE NULL AND VOID
AND ARE NO LONGER TRANSFERABLE.
Notwithstanding this Section 3(d), neither the omission of a legend nor the
inclusion of a legend that makes reference to a rights agreement other than the
Rights Agreement shall affect the enforceability of any part of this Rights
Agreement or the rights of any holder of Rights. In the event that the Company
purchases or otherwise acquires any Common Shares after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Shares
shall be deemed canceled and retired so that the Company shall not be entitled
to exercise any Rights associated with the Common Shares which are no longer
outstanding.
SECTION 4. FORM OF RIGHT CERTIFICATES. The Right Certificates
(and the form of election to purchase and form of assignment to be printed on
the reverse side thereof) shall be in substantially the form set forth as
Exhibit B 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 Rights
Agreement, provided that such marks, legends, summaries and endorsements do not
affect the rights, duties or responsibilities of the Rights Agent, 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 Sections 7, 11 and 23, the Right Certificates, whenever
issued, shall be dated as of the Distribution Date, and on their face shall
entitle the holders thereof to purchase such number of Preferred Shares as shall
be set forth therein for the Purchase Price set forth therein, subject to
adjustment from time to time as herein provided.
SECTION 5. EXECUTION, COUNTERSIGNATURE AND REGISTRATION. (a)
The Right Certificates shall be executed on behalf of the Company by the
Chairman of the Board, any Vice Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Treasurer or any Vice
President (whether preceded by any additional title) of the Company, either
manually or by facsimile signature, and have affixed thereto the Company's seal
or a facsimile thereof, which shall be attested by the Secretary, an Assistant
Secretary or a Vice President (whether preceded by any additional title,
provided that such Vice President shall not have also executed the Right
Certificates) of the Company, either manually or by facsimile signature. The
14
Right Certificates shall be manually countersigned by the Rights Agent and shall
not be valid or obligatory for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Right Certificates shall
cease to be such an officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Right Certificates may
nevertheless be countersigned by the Rights Agent and issued and delivered by
the Company with the same force and effect as though the person who signed such
Right Certificates had not ceased to be such an officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any person who, at
the actual date of execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
execution of this Rights Agreement any such person was not such an officer of
the Company.
(b) Following the Distribution Date and receipt by the Rights
Agent of written notice to that effect and all other relevant information
referred to in Section 3(b), the Rights Agent shall keep or cause to be kept, at
its office designated for such purpose, books for registration and transfer of
the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced by each of the Right Certificates, the certificate number of
each of the Right Certificates and the date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT-UP, COMBINATION AND EXCHANGE OF
RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES;
UNCERTIFICATED RIGHTS. (a) Subject to Sections 7(e) and 15, at any time after
the Distribution Date, and at or prior to the Close of Business on the earliest
of the Redemption Date, the Exchange Date, to the extent applicable, or the
Expiration Date, any Right Certificate or Right Certificates (other than those
that have become null and void) may be transferred, split-up, combined or
exchanged for another Right Certificate or Right Certificates representing, in
the aggregate, the same number of Rights as the Right Certificate or Right
Certificates surrendered then represented. Any registered holder desiring to
transfer, split-up, combine or exchange any Right Certificate shall make such
request in writing delivered to the Rights Agent and shall surrender the Right
Certificate or Right Certificates to be transferred, split-up, combined or
exchanged at the office of the Rights Agent designated for such purpose;
PROVIDED, HOWEVER, that neither the Rights Agent nor the Company shall be
obligated to take any action whatsoever with respect to the transfer of any
15
Right Certificate surrendered for transfer until the registered holder shall
have properly completed and signed the certification contained in the form of
assignment on the reverse side of such Right Certificate and shall have provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company or the
Rights Agent shall reasonably request. Thereupon the Rights Agent shall, subject
to Sections 7(e) and 15, countersign and deliver to the Person entitled thereto
a Right Certificate or Right 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 Right Certificates. The Rights Agent shall
have no duty or obligation under this Section 6 or any other similar provision
of this Rights Agreement unless and until it is satisfied that all such taxes
and/or governmental charges have been paid in full.
(b) Subject to Sections 7(e) and 15, at any time after the
Distribution Date, and at or prior to the Close of Business on the earliest of
the Redemption Date, the Exchange Date, to the extent applicable, or the
Expiration Date, upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a valid Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company shall make a new
Right Certificate of like tenor and deliver such new Right Certificate to the
Rights Agent for delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
(c) Notwithstanding any other provision hereof, the Company
and the Rights Agent may amend this Rights Agreement to provide for
uncertificated Rights in addition to or in place of Rights evidenced by Right
Certificates.
SECTION 7. EXERCISE OF RIGHTS; EXPIRATION DATE OF RIGHTS. (a)
Subject to Section 7(e) and except as otherwise provided herein (including
Section 11), each Right shall entitle the registered holder thereof, upon
exercise thereof as provided herein, to purchase for the Purchase Price, at any
time after the Distribution Date and at or prior to the earliest of (i) the
Close of Business on the 10th anniversary of the date of this Rights Agreement
(the
16
Close of Business on such date being the "EXPIRATION DATE"), (ii) the Redemption
Date or (iii) the time at which such Right is exchanged as provided in Section
11(b) hereof (the Close of Business on such date as to such Right being the
"EXCHANGE DATE"), one one-thousandth (1/1,000th) of a Preferred Share, subject
to adjustment from time to time as provided in Sections 11 and 12.
(b) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided herein) in
whole or in part at any time after the Distribution Date, upon surrender of the
Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the Purchase Price for
each one one-thousandth (1/1,000th) of a Preferred Share as to which the Rights
are exercised, at or prior to the earliest of (i) the Expiration Date, (ii) the
Exchange Date, to the extent applicable, and (iii) the Redemption Date.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the Purchase Price for the
Preferred Shares to be purchased together with an amount equal to any applicable
transfer tax or similar governmental charge, in lawful money of the United
States of America, in cash or by certified check or money order payable to the
order of the Company, the Rights Agent shall thereupon (i) either (A) promptly
requisition from any transfer agent of the Preferred Shares (or make available,
if the Rights Agent is the transfer agent) certificates for the number of
Preferred Shares to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests or (B) if the Company shall
have elected to deposit the Preferred Shares with a depositary agent under a
depositary arrangement, promptly requisition from the depositary agent
depositary receipts representing the number of one one-thousandths (1/1,000ths)
of a Preferred Share to be purchased (in which case certificates for the
Preferred Shares to be represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company shall direct the
depositary agent to comply with all such requests, (ii) when necessary to comply
with this Rights Agreement, promptly requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in accordance with
Section 15, (iii) promptly after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in
17
such name or names as may be designated by such holder and (iv) when necessary
to comply with this Rights Agreement, after receipt promptly deliver such cash
to or upon the order of the registered holder of such Right Certificate.
(d) Except as otherwise provided herein, in case the
registered holder of any Right Certificate shall exercise fewer than all the
Rights evidenced thereby, a new Right Certificate evidencing Rights equivalent
to the Rights remaining unexercised shall be issued by the Rights Agent and
delivered to the registered holder of such Right Certificate or to such holder's
duly authorized assigns, subject to the provisions of Section 15.
(e) Notwithstanding anything in this Rights Agreement to the
contrary, any Rights that are at any time beneficially owned by (i) an Acquiring
Person or an Affiliate or Associate 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 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), and subsequent
transferees of such Persons, shall be null and void without any further action
and no holder of such Rights shall have any rights whatsoever with respect to
such Rights, whether under any provision of this Rights Agreement or otherwise.
The Company shall use all reasonable efforts to ensure that the provisions of
this Section 7(e) are complied with, but neither the Company nor the Rights
Agent shall have any liability to any holder of any Right Certificate or any
other Person as a result of the Company's failure to make any determinations
with respect to an Acquiring Person or its Affiliate or Associate, or any
transferee thereof, hereunder. From and after the time a Person becomes an
Acquiring Person, no Right Certificate shall be issued pursuant to Section 3 or
Section 6 hereof that represents Rights that are or have become null and void
pursuant to the provisions hereof, and any Right Certificate delivered to the
Rights Agent that represents Rights that are or have
18
become null and void pursuant to the provisions of this paragraph shall be
canceled.
(f) Notwithstanding anything in this Rights Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of any Right
Certificates upon the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) properly completed and
signed the certificate contained in the form of election to purchase set forth
on the reverse side of the Right Certificate surrendered for such exercise and
(ii) provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
(g) The Company may temporarily suspend, for a period of time
not to exceed 90 calendar days after the Distribution Date, the exercisability
of the Rights in order to prepare and file a registration statement under the
Securities Act, on an appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights and permit such registration statement
to become effective; PROVIDED, HOWEVER, that no such suspension shall remain
effective after, and the Rights shall without any further action by the Company
or any other Person become exercisable immediately upon, the effectiveness of
such registration statement. Upon any such suspension, the Company shall
promptly notify the Rights Agent in writing of such suspension and shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended and shall issue a further public announcement at such time
as the suspension is no longer in effect (with prompt written notice to the
Rights Agent that such suspension is no longer in effect). Notwithstanding any
provision herein to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite qualification under the blue sky or securities
laws of such jurisdiction shall not have been obtained or the exercise of the
Rights shall not be permitted under applicable law.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered or presented for the purpose of exercise,
transfer, split-up, combination or exchange shall, and any Right Certificate
representing Rights that have become null and void and nontransferable pursuant
to Section 7(e) surrendered or presented for any purpose shall, if surrendered
or presented to the Company or to any of its agents, be delivered to the Rights
Agent for cancellation or in canceled form, or, if
19
surrendered or presented to the Rights Agent, shall be canceled by it, and no
Right Certificates shall be issued in lieu thereof except as expressly permitted
by this Rights Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and retire,
any Right Certificate purchased or acquired by the Company. The Rights Agent
shall deliver all canceled Right Certificates to the Company, or shall, at the
written request of the Company, destroy such canceled Right Certificates, and in
such case shall deliver a certificate of destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES.
(a) The Company shall cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any authorized and issued Preferred
Shares held in its treasury, free from preemptive rights or any right of first
refusal, a number of Preferred Shares sufficient to permit the exercise in full
of all outstanding Rights.
(b) If there are not sufficient Preferred Shares issued but
not outstanding or authorized but unissued to permit the exercise or exchange of
Rights in accordance with Section 11, the Company shall take all such action as
may be necessary to authorize additional Preferred Shares for issuance upon the
exercise or exchange of Rights pursuant to Section 11; PROVIDED, HOWEVER, that
if the Company is unable to cause the authorization of additional Preferred
Shares, then the Company shall, or (if action by the Company's stockholders is
necessary to cause such authorization) in lieu of seeking any such
authorization, the Company may, to the extent necessary and permitted by
applicable law and any agreements or instruments in effect prior to the
Distribution Date to which it is a party, (i) upon surrender of a Right, pay
cash equal to the Purchase Price in lieu of issuing Preferred Shares and
requiring payment therefor, (ii) upon due exercise of a Right and payment of the
Purchase Price for each Preferred Share as to which such Right is exercised,
issue common stock or other equity securities having a value equal to the value
of the Preferred Shares that otherwise would have been issuable pursuant to
Section 11, which value shall be determined by a nationally recognized
investment banking firm selected by the Board of Directors of the Company, or
(iii) upon due exercise of a Right and payment of the Purchase Price for each
Preferred Share as to which such Right is exercised, distribute a combination of
Preferred Shares, cash and/or other equity and/or debt securities having an
aggregate value equal to the value of the Preferred Shares that otherwise would
have been issuable pursuant to Section 11,
20
which value shall be determined by a nationally recognized investment banking
firm selected by the Board of Directors of the Company. To the extent that any
legal or contractual restrictions (pursuant to agreements or instruments in
effect prior to the Distribution Date to which it is party) prevent the Company
from paying the full amount payable in accordance with the foregoing sentence,
the Company shall pay to holders of the Rights as to which such payments are
being made all amounts that are not then restricted on a pro rata basis as such
payments become permissible under such legal or contractual restrictions until
such payments have been paid in full.
(c) The Company shall take all such action as may be necessary
to ensure that all Preferred Shares delivered upon exercise or exchange of
Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
(d) So long as the Preferred Shares issuable upon the exercise
or exchange of Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable or exchangeable, all Preferred Shares reserved for
such issuance to be listed on such securities exchange upon official notice of
issuance upon such exercise or exchange.
(e) The Company shall pay when due and payable any and all
Federal and state transfer taxes and similar charges which may be payable in
respect of the issuance or delivery of Right Certificates or of any Preferred
Shares or Common Shares or other securities upon the exercise or exchange of the
Rights. The Company shall not, however, be required to pay any transfer tax or
similar charge which may be payable in respect of any transfer or delivery of
Right Certificates to a Person other than, or in respect of the issuance or
delivery of certificates for the Preferred Shares or Common Shares or other
securities, as the case may be, in a name other than that of, the registered
holder of the Right Certificate evidencing Rights surrendered for exercise or
exchange or to issue or deliver any certificates for Preferred Shares or Common
Shares or other securities, as the case may be, upon the exercise or exchange of
any Rights until any such tax or charge shall have been paid (any such tax or
charge being payable by the holder of such Right Certificate at the time of
surrender) or until it has been established to the Company's satisfaction that
no such tax or charge is due.
21
SECTION 10. PREFERRED SHARES RECORD DATE. Each Person in whose
name any certificate for Preferred Shares or Common Shares or other securities
is issued upon the exercise or exchange of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Shares or Common
Shares or other securities, as the case may be, represented thereby on, and such
certificate shall be dated, the date on which the Right Certificate evidencing
such Rights was duly surrendered and payment of any Purchase Price (and any
applicable transfer taxes and similar charges) was made; PROVIDED, HOWEVER,
that, if the date of such surrender and payment is a date upon which the
transfer books of the Company for the Preferred Shares or Common Shares or other
securities, as the case may be, are closed, such Person shall be deemed to have
become the record holder of such Preferred Shares or Common Shares or other
securities, as the case may be, on, and such certificate shall be dated, the
next succeeding Business Day on which the transfer books of the Company for the
Preferred Shares or Common Shares or other securities, as the case may be, are
open.
SECTION 11. ADJUSTMENTS IN RIGHTS AFTER THERE IS AN ACQUIRING
PERSON; EXCHANGE OF RIGHTS FOR SHARES; BUSINESS COMBINATIONS. (a) Upon a Person
becoming an Acquiring Person, each holder of a Right, except as provided in
Section 7(e), shall thereafter have a right to receive, upon exercise thereof
for the Purchase Price in accordance with the terms of this Rights Agreement,
such number of one one-thousandths (1/1,000ths) of a Preferred Share as shall
equal the result obtained by multiplying the Purchase Price by a fraction, the
numerator of which is the number of one one-thousandths (1/1,000ths) of a
Preferred Share for which such Right is then exercisable and the denominator of
which is 50% of the Market Value of the Common Shares on the date on which such
Person became an Acquiring Person. As soon as practicable after a Person becomes
an Acquiring Person (provided the Company shall not have elected to make the
exchange permitted by Section 11(b)(i) for all outstanding Rights), the Company
shall use its best efforts to:
(i) prepare and file a registration statement under the
Securities Act, on an appropriate form, with respect to the Preferred
Shares purchasable upon exercise of the Rights;
(ii) cause such registration statement to become effective as
soon as practicable after such filing;
(iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the
22
requirements of the Securities Act) until the Expiration Date; and
(iv) qualify or register the Preferred Shares purchasable upon
exercise of the Rights under the blue sky or securities laws of such
jurisdictions as may be necessary or appropriate.
(b)(i) The Board of Directors of the Company may, at its
option, at any time after a Person becomes an Acquiring Person, mandatorily
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that shall have become null and void and nontransferable
pursuant to Section 7(e)) for consideration per Right consisting of either (A)
one-half of the securities that would be issuable at such time upon the exercise
of one Right in accordance with Section 11(a) or, if applicable, Section
9(b)(ii) or 9(b)(iii) or (B) if applicable, the cash consideration specified in
Section 9(b)(i) (the consideration issuable per Right pursuant to this Section
11(b)(i) being the "EXCHANGE CONSIDERATION"). The Board of Directors of the
Company may, at its option, issue a number of Common Shares in lieu of each
Preferred Share equal to the Formula Number (as defined in the Certificate of
Designation) if there are sufficient Common Shares issued but not outstanding or
authorized but unissued. If the Board of Directors of the Company elects to
exchange all the Rights for Exchange Consideration pursuant to this Section
11(b)(i) prior to the physical distribution of the Right Certificates, the
Company may distribute the Exchange Consideration in lieu of distributing Right
Certificates, in which case for purposes of this Rights Agreement holders of
Rights shall be deemed to have simultaneously received and surrendered for
exchange Right Certificates on the date of such distribution. Notwithstanding
the foregoing, the Board of Directors of the Company may not effect such
exchange at any time after any Person (other than the Company, any Subsidiary of
the Company or any employee benefit plan of the Company or any of its
Subsidiaries or any Person holding Common Shares for or pursuant to the terms of
any such employee benefit or compensation plan), together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of more than 50% of
the Common Shares then outstanding. From and after the time a Person becomes an
Acquiring Person and, subsequent thereto, a Business Combination occurs, any
Rights that theretofore have not been exchanged pursuant to this Section 11(b)
shall thereafter be exercisable only in accordance with Section 11(c) and may
not be exchanged pursuant to this Section 11(b). The exchange of the Rights by
the Board of Directors may be made effective at such
23
time, on such basis and with such conditions as the Board of Directors in its
sole discretion may establish.
(ii) Any action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to Section 11(b)(i) shall be
irrevocable and, immediately upon the effectiveness of such action and without
any further action and without any notice, the right to exercise any such Right
so exchanged pursuant to Section 11(a) shall terminate and the only right
thereafter of a holder of such Right shall be to receive the Exchange
Consideration in exchange for each such Right held by such holder or, if the
Exchange Consideration shall not have been paid or issued, to exercise any such
Right pursuant to Section 11(c)(i). The Company shall promptly notify the Rights
Agent in writing of such exchange and shall promptly 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 promptly
shall mail a notice of any such exchange to all holders of the Rights to be
exchanged 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 shall state the method by which the exchange of the Rights for the
Exchange Consideration will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which shall have become null and void and nontransferable pursuant to the
provisions of Section 7(e)) held by each holder of Rights.
(c)(i) In the event that following the time a Person becomes
an Acquiring Person, directly or indirectly, any transactions specified in the
following clause (A), (B) or (C) of this Section 11(c)(i) (each such transaction
being a "BUSINESS COMBINATION") shall be consummated:
(A) the Company shall consolidate with, or merge with and
into, any Person;
(B) any Person shall merge with and into the Company and, in
connection with such merger, all or part of the outstanding Common
Shares shall be changed into or exchanged for capital stock or other
securities of the Company or of any other Person or cash or any other
property; or
24
(C) the Company shall sell, lease, exchange or otherwise
transfer or dispose of (or one or more of its Subsidiaries shall sell,
lease, exchange or otherwise transfer or dispose of), in one or more
transactions, the Major Part of the assets of the Company and its
Subsidiaries (taken as a whole) to any Person,
then, in each such case, proper provision shall be made so that each holder of a
Right, except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof for the Purchase Price in accordance with the
terms of this Rights Agreement, the securities specified below (or, at such
holder's option, the securities specified in Section 11(a) if the Company is the
surviving corporation in such Business Combination):
(1) if the Principal Party in such Business Combination has
Registered Common Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof for the
Purchase Price in accordance with the terms of this Rights Agreement,
such number of Registered Common Shares of such Principal Party, free
and clear of all liens, encumbrances or other adverse claims, as shall
have an aggregate Market Value as of the time of exercise thereof
equal to the result obtained by multiplying the Purchase Price by two;
(2) if the Principal Party involved in such Business
Combination does not have Registered Common Shares outstanding, each
Right shall thereafter represent the right to receive, upon the
exercise thereof for the Purchase Price in accordance with the terms
of this Rights Agreement, at the election of the holder of such Right
at the time of the exercise thereof, any of:
(x) such number of Common Shares of the Surviving Person
in such Business Combination as shall have an aggregate Book
Value immediately after giving effect to such Business
Combination equal to the result obtained by multiplying the
Purchase Price by two;
(y) such number of Common Shares of the Principal Party in
such Business Combination (if the Principal Party is not also
the Surviving Person in such Business Combination) as shall
have an aggregate Book Value immediately after giving effect
to such Business Combination equal to the
25
result obtained by multiplying the Purchase Price by two; or
(z) if the Principal Party in such Business Combination is
an Affiliate of one or more Persons that has Registered Common
Shares outstanding, such number of Registered Common Shares of
whichever of such Affiliates of the Principal Party has
Registered Common Shares with the greatest aggregate Market
Value on the date of consummation of such Business Combination
as shall have an aggregate Market Value on the date of such
Business Combination equal to the result obtained by
multiplying the Purchase Price by two.
(ii) The Company shall not consummate any Business Combination
unless each issuer of Common Shares for which Rights may be exercised, as set
forth in this Section 11(c), shall have sufficient authorized Common Shares that
have not been issued or reserved for issuance (and which shall, when issued upon
exercise thereof in accordance with this Rights Agreement, be validly issued,
fully paid and nonassessable and free of preemptive rights, rights of first
refusal or any other restrictions or limitations on the transfer or ownership
thereof) to permit the exercise in full of the Rights in accordance with this
Section 11(c) and unless prior thereto:
(A) a registration statement under the Securities Act on an
appropriate form, with respect to the Rights and the Common Shares of
such issuer purchasable upon exercise of the Rights, shall be
effective under the Securities Act; and
(B) the Company and each such issuer shall have:
(1) executed and delivered to the Rights Agent a
supplemental agreement providing for the assumption by such
issuer of the obligations set forth in this Section 11(c)
(including the obligation of such issuer to issue Common
Shares upon the exercise of Rights in accordance with the
terms set forth in Sections 11(c)(i) and 11(c)(iii)) and
further providing that such issuer, at its own expense, shall
use its best efforts to:
(x) cause a registration statement under the
Securities Act on an appropriate form, with respect to
the Rights and the Common Shares of such issuer
purchasable upon
26
exercise of the Rights, to remain effective (with a
prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date;
(y) qualify or register the Rights and the Common
Shares of such issuer purchasable upon exercise of the
Rights under the blue sky or securities laws of such
jurisdictions as may be necessary or appropriate; and
(z) list the Rights and the Common Shares of such
issuer purchasable upon exercise of the Rights on each
national securities exchange on which the Common Shares
were listed prior to the consummation of the Business
Combination or, if the Common Shares were not listed on a
national securities exchange prior to the consummation of
the Business Combination, on a national securities
exchange;
(2) furnished to the Rights Agent a written opinion of
independent counsel stating that such supplemental agreement
is a valid, binding and enforceable agreement of such issuer;
and
(3) filed with the Rights Agent a certificate of a
nationally recognized firm of independent accountants setting
forth the number of Common Shares of such issuer that may be
purchased upon the exercise of each Right after the
consummation of such Business Combination.
(iii) After consummation of any Business Combination and
subject to the provisions of Section 11(c)(ii), (A) each issuer of Common Shares
for which Rights may be exercised as set forth in this Section 11(c) shall be
liable for, and shall assume, by virtue of such Business Combination, all the
obligations and duties of the Company pursuant to this Rights Agreement, (B) the
term "Company" shall thereafter be deemed to refer to such issuer, (C) each such
issuer shall take such steps in connection with such consummation as may be
necessary to assure that the provisions hereof (including the provisions of
Sections 11(a) and 11(c)) shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights, and (D) the number of Common Shares of each such
issuer thereafter receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner
27
and on terms as nearly equivalent as practicable to the provisions of Sections
11 and 12 and the provisions of Sections 7, 9 and 10 with respect to the
Preferred Shares shall apply, as nearly as reasonably may be, on like terms to
any such Common Shares.
(iv) In case the issuer of Common Shares for which Rights may
be exercised, as set forth in this Section 11(c), has a provision in any of its
authorized securities or in its certificate of incorporation or by-laws or other
instrument governing its affairs, which provision would have the effect of (i)
causing such issuer to issue (other than to holders of Rights pursuant to this
Section 11(c)), in connection with, or as a consequence of, the consummation of
a transaction referred to in this Section 11(c), Common Shares of such issuer at
less than the then Market Value per share thereof or securities exercisable for,
or convertible into, Common Shares of such issuer at less than such then Market
Value, or (ii) providing for any special payment, tax or similar provision in
connection with the issuance of the Common Shares of such issuer pursuant to the
provisions of Section 11(c), then, in such event, the Company hereby agrees with
each holder of Rights that it shall not consummate any such transaction unless
prior thereto the Company and such issuer shall have executed and delivered to
the Rights Agent a supplemental agreement providing that the provision in
question of such issuer shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
SECTION 12. CERTAIN ADJUSTMENTS. (a) To preserve the actual or
potential economic value of the Rights, if at any time after the date of this
Rights Agreement there shall be any change in the Common Shares or the Preferred
Shares, whether by reason of stock dividends, stock splits, reclassifications,
recapitalizations, mergers, consolidations, combinations or exchanges of
securities, split-ups, split-offs, spin-offs, liquidations, other similar
changes in capitalization, any distribution or issuance of cash, assets,
evidences of indebtedness or subscription rights, options or warrants to holders
of Common Shares or Preferred Shares, as the case may be (other than
distribution of the Rights or regular quarterly cash dividends), or otherwise,
then, in each such event the Board of Directors of the Company shall make such
appropriate adjustments in the number of Preferred Shares (or the number and
kind of other securities) issuable upon exercise of each Right, the Purchase
Price and Redemption Price in effect at
28
such time and the number of Rights outstanding at such time (including the
number of Rights or fractional Rights associated with each Common Share) such
that following such adjustment such event shall not have had the effect of
reducing or limiting the benefits the holders of the Rights would have had
absent such event.
(b) If, as a result of an adjustment made pursuant to Section
12(a), the holder of any Right thereafter exercised shall become entitled to
receive any securities other than Preferred Shares, thereafter the number of
such securities so receivable upon exercise of any Right shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions of Sections 11 and 12 and the provisions of
Sections 7, 9 and 10 with respect to the Preferred Shares shall apply, as nearly
as reasonably may be, on like terms to any such other securities.
(c) All Rights originally issued by the Company subsequent to
any adjustment made to the amount of Preferred Shares or other securities
relating to a Right shall evidence the right to purchase, for the Purchase
Price, the adjusted number and kind of securities purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(d) Irrespective of any adjustment or change in the Purchase
Price or the number of Preferred Shares or number or kind of other securities
issuable upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the terms that were expressed in the
initial Right Certificates issued hereunder.
(e) In any case in which action taken pursuant to Section
12(a) requires that an adjustment be made effective as of a record date for a
specified event, the Company may elect to defer (with prompt written notice
thereof to the Rights Agent) until the occurrence of such event the issuing to
the holder of any Right exercised after such record date the Preferred Shares
and/or other securities, if any, issuable upon such exercise over and above the
Preferred Shares and/or other securities, if any, issuable before giving effect
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 securities upon the occurrence of the event requiring
such adjustment.
29
SECTION 13. CERTIFICATE OF ADJUSTMENT. Whenever an adjustment
is made as provided in Section 11 or 12, 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 Preferred Shares a copy of such certificate and (c)
mail a brief summary thereof to each holder of a Right Certificate in accordance
with Section 25 (if so required in Section 25 hereof), provided that the failure
to prepare, file or mail such certificate or summary shall not affect the
validity of such adjustment. The Rights Agent shall be fully authorized and
protected in relying on any such certificate and on any adjustment or statement
therein contained, and shall have no duty or liability with respect to, and
shall not be deemed to have knowledge of, any such adjustment or statement
unless and until it shall have received such a certificate.
SECTION 14. ADDITIONAL COVENANTS. (a) Notwithstanding any
other provision of this Rights Agreement, no adjustment to the number of
Preferred Shares (or fractions of a share) or other securities for which a Right
is exercisable or the number of Rights outstanding or associated with each
Common Share or any similar or other adjustment shall be made or be effective if
such adjustment would have the effect of reducing or limiting the benefits the
holders of the Rights would have had absent such adjustment, including the
benefits under Sections 11 and 12, unless the terms of this Rights Agreement are
amended so as to preserve such benefits.
(b) The Company covenants and agrees that, after the
Distribution Date, except as permitted by Section 26, it shall not take (or
permit any Subsidiary of the Company to take) any action if at the time such
action is taken it is intended or reasonably foreseeable that such action will
reduce or otherwise limit the benefits the holders of the Rights would have had
absent such action, including the benefits under Sections 11 and 12. Any action
taken by the Company during any period after any Person becomes an Acquiring
Person but prior to the Distribution Date shall be null and void unless such
action could be taken under this Section 14(b) from and after the Distribution
Date. The Company shall not consummate any Business Combination if (i) any
issuer of Common Shares for which Rights may be exercised after such Business
Combination in accordance with Section 11(c) shall have taken any action that
reduces or otherwise limits the benefits the holders of the Rights would have
had absent such action, including the benefits under Sections 11 and 12, (ii) at
the time of or immediately after such consolidation, merger, sale, transfer or
other
30
transaction 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, (iii)
prior to, simultaneously with or immediately after such consolidation, merger,
sale, transfer or other transaction, the stockholders of the Person who
constitutes, or would constitute, the issuer for purposes of Section 11(c)
hereof shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates or Associates or (iv) the form or nature of
organization of the issuer would preclude or limit the exercisability of the
Rights.
SECTION 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The
Company may, but shall not be required to, issue fractions of Rights or
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, the Company may pay to the registered holders of the Right
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 15(a), the current market
value of a whole Right shall be the closing price of the Rights (as determined
pursuant to the second sentence of the definition of Market Value contained in
Section 1) for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable.
(b) The Company may, but shall not be required to, issue
fractions of Preferred Shares (other than one one-thousandths (1/1,000ths) of a
Preferred Share or any integral multiple thereof) upon exercise of the Rights or
distribute certificates that evidence fractional Preferred Shares (other than
one one-thousandths (1/1,000ths) of a Preferred Share or any integral multiple
thereof). In lieu of fractional Preferred Shares, the Company may elect to (i)
utilize a depository arrangement as provided by the terms of the Preferred
Shares or (ii) in the case of a fraction of a Preferred Share (other than one
one-thousandths (1/1,000ths) of a Preferred Share or any integral multiple
thereof), pay to the registered holders of Right 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 Preferred Share, if any are
outstanding and publicly traded (or the same fraction of the current market
value of one Common Share times the Formula Number if the Preferred Shares are
not outstanding and publicly traded). For purposes of this Section 15(b), the
current market value of a Preferred Share (or Common
31
Share) shall be the closing price of a Preferred Share (or Common Share) (as
determined pursuant to the second sentence of the definition of Market Value
contained in Section 1) for the Trading Day immediately prior to the date of
such exercise. If, as a result of an adjustment made pursuant to Section 12(a),
the holder of any Right thereafter exercised shall become entitled to receive
any securities other than Preferred Shares, the provisions of this Section 15(b)
shall apply, as nearly as reasonably may be, on like terms to such other
securities.
(c) The Company may, but shall not be required to, issue
fractions of Common Shares upon exercise or exchange of Rights, or to distribute
certificates that evidence fractional Common Shares. In lieu of such fractional
Common Shares, the Company may pay to the registered holders of the Right
Certificates with regard to which such fractional Common Shares would otherwise
be issuable an amount in cash equal to the same fraction of the current Market
Value of one Common Share as of the date on which a Person became an Acquiring
Person.
(d) Each holder of Rights by the acceptance of such Rights
expressly waives such holder's right to receive any fractional Rights or any
fractional shares upon exercise or exchange of a Right except as provided in
this Section 15.
(e) Whenever a payment for fractional Rights or fractional
shares is to be made by the Rights Agent, the Company shall (i) promptly prepare
and deliver to the Rights Agent a certificate setting forth the facts related to
such payment and the prices and/or formulas utilized in calculating such
payments, and (ii) provide sufficient monies to the Rights Agent in the form of
fully collected funds to make such payments. The Rights Agent shall be fully
protected in relying upon such a certificate and shall have no duty with respect
to, and shall not be deemed to have knowledge of any payment for fractional
Rights or fractional shares under any Section of this Rights Agreement relating
to the payment of fractional Rights or fractional shares unless and until the
Rights Agent shall have received such a certificate and sufficient monies.
SECTION 16. RIGHTS OF ACTION. (a) All rights of action in
respect of this Rights Agreement, except the rights of action given to the
Rights Agent pursuant to Sections 19 and 21 hereof, are vested in the respective
registered holders of the Right Certificates (and, prior to the Distribution
Date, the registered holders of the Common Shares); and any registered holder of
any Right Certificate
32
(or, prior to the Distribution Date, of the Common Shares), without the consent
of the Rights Agent or of the holder of any other Right Certificate (or, prior
to the Distribution Date, of the Common Shares) may, in such holder's own behalf
and for such holder's own benefit, enforce, and may institute and maintain any
suit, action or proceeding against the Company to enforce, or otherwise act in
respect of, such holder's right to exercise the Rights evidenced by such Right
Certificate in the manner provided in such Right Certificate and in this Rights
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 Rights Agreement
and shall be entitled to specific performance of the obligations of any Person
under, and injunctive relief against actual or threatened violations of the
obligations of any Person subject to, this Rights Agreement.
(b) Any holder of Rights who prevails in an action to enforce
the provisions of this Rights Agreement shall be entitled to recover the
reasonable costs and expenses, including attorneys' fees, incurred in such
action.
(c) Notwithstanding anything in this Rights 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 Rights Agreement by reason of any preliminary
or permanent injunction or other order, decree, judgment or ruling (whether
interlocutory or final) issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
PROVIDED, HOWEVER, that the Company must use its reasonable efforts to have any
such order, decree, judgement or ruling lifted or otherwise overturned as soon
as possible.
SECTION 17. TRANSFER AND OWNERSHIP OF RIGHTS AND RIGHT
CERTIFICATES. (a) Prior to the Distribution Date, the Rights shall be
transferable only in connection with the transfer of the Common Shares and the
Right associated with each Common Share shall be automatically transferred upon
the transfer of each Common Share.
(b) After the Distribution Date, the Right Certificates shall
be transferable, subject to Section 7(e),
33
only on the registry books of the Rights Agent if surrendered at the office of
the Rights Agent designated for such purpose, duly endorsed or accompanied by a
proper instrument of transfer.
(c) The Company and the Rights Agent may deem and treat the
Person in whose name a Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated certificate for
Common Shares made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
SECTION 18. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Right Certificate shall be entitled to vote or
receive dividends or other distributions or be deemed, for any purpose, the
holder of the Preferred Shares or of any other securities of the Company which
may at any time be issuable on the exercise of the Rights represented thereby,
nor shall anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights of a
stockholder of the Company, including 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, or to receive dividends or
other distributions or subscription rights, or otherwise, until the Right or
Rights evidenced by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
SECTION 19. CONCERNING THE RIGHTS AGENT. (a) The Company
agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and from time to time, on demand of the Rights Agent,
its reasonable expenses and counsel fees and other disbursements incurred in the
preparation, delivery, administration, execution and amendment of this Rights
Agreement and the exercise and performance of its duties hereunder, including
any taxes or governmental charges imposed as a result of the action taken by it
hereunder (other than any taxes on the fees payable to it).
(b) The Rights Agent shall be authorized and protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with the acceptance and administration of this
Rights
34
Agreement in reliance upon any Right Certificate or certificate for the Common
Shares 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. The Rights Agent shall not be
deemed to have any duty or notice unless and until the Company has provided the
Rights Agent with actual written notice.
SECTION 20. MERGER OR CONSOLIDATION OR CHANGE OF RIGHTS AGENT.
(a) Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the shareholder services, stock
transfer or corporate trust business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Rights 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 Person would be eligible
for appointment as a successor Rights Agent under the provisions of Section 22.
In case, at the time such successor Rights Agent shall succeed to the agency
created by this Rights Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and, in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and, in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Rights Agreement.
35
SECTION 21. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations expressly imposed by this Rights Agreement
(and no implied duties or obligations) upon the following terms and conditions,
by all of which the Company and the holders of Right Certificates (or, prior to
the Distribution Date, of the Common Shares), 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 and the Rights
Agent shall incur no liability for or in respect of any action taken, suffered
or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Rights Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including the identity of any Acquiring Person) be proved or
established by the Company prior to taking, refraining from taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman of the
Board, any Vice Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial Officer, a Vice
President (whether preceded by any additional title), the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full and complete authorization and protection to the Rights Agent and
the Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted in good faith by it under the provisions of this Rights
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith or willful misconduct (each as finally
determined by a final, non-appealable order, judgement, decree or ruling of a
court of competent jurisdiction). Anything in this Rights Agreement to the
contrary notwithstanding, to the fullest extent permitted by applicable law, in
no event shall the Rights Agent be liable for special, punitive, indirect,
incidental or consequential loss or damage of any kind whatsoever (including,
but not limited to, lost profits), even if the Rights Agent has been advised of
the possibility of such loss or damage.
36
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Rights Agreement or
in the Right Certificates (except as to its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not be liable for nor be under any
responsibility in respect of the validity of this Rights 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 Right Certificate
(except its countersignature thereof); nor shall it be liable or responsible for
any breach by the Company of any covenant or condition contained in this Rights
Agreement or in any Right Certificate; nor shall it be responsible for any
adjustment required under the provisions of Section 11 or 12 or responsible for
the manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Right Certificates after actual notice of
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
Preferred Shares or Common Shares to be issued pursuant to this Rights Agreement
or any Right Certificate or as to whether any Preferred Shares or Common Shares
will, when so issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it shall 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 Rights Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, any Vice Chairman of the Board, the Chief
Executive Officer, the President, the Chief Operating Officer, a Vice President
(whether preceded by any additional title), the Secretary or the Treasurer of
the Company, and to apply to such officers for instructions, in connection with
its duties and such instructions shall be full authorization and protection to
the Rights Agent and the Rights Agent shall incur no liability for or in respect
of any action taken, suffered or omitted to be taken by it
37
in good faith in accordance with instructions of any such officer. The Rights
Agent shall be fully protected and authorized in relying upon the most recent
instructions received by any such officer.
(h) The Rights Agent and any stockholder, director, officer,
employee or Affiliate 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 or its Subsidiaries may be interested, or
contract with or lend money to the Company or its Subsidiaries or otherwise act
as fully and freely as though it were not the Rights Agent under this Rights
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, absent gross negligence, bad faith or
willful misconduct (each as determined by a final, nonappealable order,
judgement, decree or ruling of a court of competent jurisdiction) in the
selection and continued employment thereof.
(j) The Company agrees to indemnify and to hold the Rights
Agent harmless against any loss, liability, damage, judgement, fine, penalty,
claim, demand, settlement, cost or expense (including reasonable fees and
expenses of legal counsel) which the Rights Agent may incur resulting from its
actions as Rights Agent pursuant to this Rights Agreement; PROVIDED, HOWEVER,
that the Rights Agent shall not be indemnified or held harmless with respect to
any such loss, liability, damage, judgement, fine, penalty, claim, demand,
settlement, cost or expense incurred by the Rights Agent as a result of, or
arising out of, its own gross negligence, bad faith or willful misconduct (each
as finally determined by a final, non-appealable order, judgment, decree or
ruling of a court of competent jurisdiction) on the part of the Rights Agent in
connection with the acceptance and administration of this Rights Agreement or
the exercise and performance of its duties hereunder. In no case shall the
Company be liable with respect to any action, proceeding, suit or claim against
the Rights Agent unless the Rights Agent shall have notified the Company, by
letter or by facsimile confirmed by letter, of the assertion of any
38
action, proceeding, suit or claim against the Rights Agent, promptly after the
Rights Agent shall have notice of any such assertion of an action, proceeding,
suit or claim or have been served with the summons or other first legal process
giving information as to the nature and basis of the action, proceeding, suit or
claim. The Company shall be entitled to participate at its own expense in the
defense of any such action, proceeding, suit or claim, and, if the Company so
elects, the Company shall assume the defense of any such action, proceeding,
suit or claim. In the event that the Company assumes such defense, the Company
shall not thereafter be liable for the fees and expenses of any additional
counsel retained by the Rights Agent, so long as the Company shall retain
counsel satisfactory to the Rights Agent, in the exercise of its reasonable
judgment, to defend such action, proceeding, suit or claim. The Rights Agent
agrees not to settle any litigation in connection with any action, proceeding,
suit or claim with respect to which it may seek indemnification from the Company
without the prior written consent of the Company. The provisions of this Section
21 shall survive the termination of the Rights Agreement, the exercise or
expiration of the Rights, and the resignation or removal of the Rights Agent.
The costs and expenses incurred in enforcing this right of indemnification shall
be paid by the Company.
(k) No provision of this Rights Agreement shall require the
Rights Agent to expend or risk its own funds in the performance of any of its
duties hereunder or in the exercise of its rights if it reasonably believes that
repayment of such funds is not assured.
SECTION 22. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Shares and the Preferred Shares by registered
or certified mail, and, following the Distribution Date, to the holders of the
Right Certificates by first-class mail. The Company may remove the Rights Agent
or any successor Rights Agent upon 30 days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Common Shares and the Preferred Shares by registered or certified
mail and, following the Distribution Date, to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall appoint a
successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has
39
been notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit such holder's Right Certificate), then the registered
holder of any Right Certificate may apply to any court of competent jurisdiction
for the appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a Person organized and
doing business under the laws of the United States or of the State of
New York
(or of any other state of the United States so long as such Person is authorized
to conduct a shareholder services, stock transfer or corporate trust business in
the State of
New York), in good standing, having a principal office in the State
of
New York, which is authorized under such laws to exercise stock transfer or
corporate trust powers and is subject to supervision or examination by Federal
or state authority and which has at the time of its appointment as Rights Agent
a combined capital and surplus of at least $50,000,000; PROVIDED, HOWEVER, that
the principal transfer agent for the Common Shares shall in any event be
qualified to be the Rights Agent. 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 as
soon as practicable the predecessor Rights Agent shall deliver and transfer to
the successor Rights Agent any property at the time held by it hereunder, and
execute and deliver any further assurance, conveyance, act or deed necessary for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares and the Preferred Shares, and mail
a notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 22, however, or any
defect therein shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
SECTION 23. ISSUANCE OF ADDITIONAL RIGHTS AND RIGHT
CERTIFICATES. Notwithstanding any of the provisions of this Rights Agreement or
of the Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by its Board of
Directors to reflect any adjustment or change made in accordance with the
provisions of this Rights Agreement. In addition, in connection with the
issuance or sale of Common Shares following the Distribution Date and prior to
the earliest of the Redemption Date, the Exchange Date, to
40
the extent applicable, and the Expiration Date, the Company (a) shall, with
respect to Common Shares so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities, notes or debentures issued by the Company,
and (b) may, in any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Right Certificates representing the
appropriate number of Rights in connection with such issuance or sale; PROVIDED,
HOWEVER, that (i) no such Right Certificate shall be issued if, and to the
extent that, the Company shall be advised by counsel that such issuance would
create a significant risk of material adverse tax consequences to the Company or
the Person to whom such Right Certificate would be issued, (ii) no such Right
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof and (iii) no such
Right Certificate shall be issued to an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
SECTION 24. REDEMPTION AND TERMINATION. (a) The Board of
Directors of the Company may, at its option, at any time prior to the earlier of
(i) such time as a Person becomes an Acquiring Person and (ii) the Expiration
Date, order the redemption of all, but not fewer than all, the then outstanding
Rights at the Redemption Price (the date of such redemption being the
"REDEMPTION DATE"), and the Company, at its option, may pay the Redemption Price
either in cash or Common Shares or other securities of the Company deemed by the
Board of Directors of the Company, in the exercise of its sole discretion, to be
at least equivalent in value to the Redemption Price. The redemption of the
Rights 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.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights (or at such later time as the
Board of Directors may establish for the effectiveness of such redemption), 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. Within 10 Business Days after the
action of the Board of Directors of the Company ordering the redemption of the
Rights, the Company shall give written 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 their last addresses as they appear upon the registry books
of the Rights Agent or, prior
41
to the Distribution Date, on the registry books of the transfer agent for the
Common Shares. Each such notice of redemption shall state the method by which
payment of the Redemption Price will be made. The notice, if mailed in the
manner herein provided, shall be conclusively presumed to have been duly given,
whether or not the holder of Rights receives such notice. In any case, failure
to give such notice by mail, or any defect in the notice, to any particular
holder of Rights shall not affect the sufficiency of the notice to other holders
of Rights. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner
except as specifically set forth in this Section or in Section 11(b) or in
connection with the purchase of Common Shares prior to the Distribution Date.
SECTION 25. NOTICES. (a) In case any event described in
Section 11(a) or Section 11(c) shall occur, then the Company shall, as soon as
practicable thereafter, give to the Rights Agent and to each holder of a Right
Certificate (or if occurring prior to the Distribution Date, the holders of the
Common Shares) in accordance with Section 25(b) hereof, a notice of the
occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a) and Section
11(c) hereof.
(b) Notices or demands authorized by this Rights Agreement to
be given or made by the Rights Agent or by the holder of a Right Certificate
(or, prior to the Distribution Date, of the Common Shares) 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:
XXXXXX HOLDINGS, INC.
000 Xxxx Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Subject to the provisions of Section 22, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the holder of a Right
Certificate (or, prior to the Distribution Date, of the Common Shares) to or on
the Rights Agent shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed
42
(until another address is filed in writing with the Company) as follows:
MELLON INVESTOR SERVICES LLC
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, XX 00000
Attention: Relationship Manager and General
Counsel
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to any holder of a Right Certificate (or, prior
to the Distribution Date, of the Common Shares) shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the transfer agent
for the Common Shares.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. At any time prior to
the time any Person becomes an Acquiring Person, and subject to the last
sentence of this Section 26, the Company may, and the Rights Agent shall if the
Company so directs, supplement or amend any provision of this Rights Agreement
in any manner which the Company may deem necessary or desirable (including the
date on which the Expiration Date or the Distribution Date shall occur, the
amount of the Purchase Price, the definition of "Acquiring Person" or the time
during which the Rights may be redeemed pursuant to Section 24) without the
approval of any holder of the Rights. From and after the time any Person becomes
an Acquiring Person, and subject to applicable law, the Company may, and the
Rights Agent shall if the Company so directs, amend this Rights Agreement
without the approval of any holders of Right Certificates (a) to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other provision of this Rights Agreement
or (b) to otherwise change or supplement any other provisions in this Rights
Agreement in any matter which the Company may deem necessary or desirable and
which shall not adversely affect the interests of the holders of Right
Certificates (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person). Any supplement or amendment to this Rights Agreement duly
approved by the Company that does not increase or change the Rights Agent's
rights, duties, liabilities or obligations hereunder in a manner adverse to the
Rights Agent shall immediately become effective after execution by the Company,
whether or not also executed by the Rights Agent; PROVIDED, that within three
Business Days following such execution, the Company delivers to the Rights
43
Agent a certificate from an appropriate officer of the Company that states that
the proposed supplement or amendment is in compliance with the terms of this
Section 26, which certificate shall be deemed delivered if sent by first-class
mail, postage prepaid, addressed as provided in Section 25; PROVIDED FURTHER,
that to the extent any such supplement or amendment may increase or change the
Rights Agent's rights, duties, liabilities or obligations hereunder in a manner
adverse to the Rights Agent, such supplement or amendment shall be invalid and
unenforceable only as to such modifications to the Rights Agent's rights,
duties, liabilities or obligations hereunder and shall not affect the validity
or enforceability of any other provisions or modifications of such supplement or
amendment, each of which shall remain in full force and effect. In addition,
notwithstanding anything to the contrary contained in this Rights Agreement, no
supplement or amendment to this Rights Agreement shall be made which reduces the
Redemption Price (except as required by Section 12(a)).
SECTION 27. SUCCESSORS. All the covenants and provisions of
this Rights Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 28. BENEFITS OF RIGHTS AGREEMENT; DETERMINATIONS AND
ACTIONS BY THE BOARD OF DIRECTORS, ETC. (a) Nothing in this Rights Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, of the Common Shares) any legal or equitable right, remedy or
claim under this Rights Agreement; but this Rights Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, of the
Common Shares).
(b) Except as explicitly otherwise provided in this Rights
Agreement, the Board of Directors of the Company shall have the exclusive power
and authority to administer this Rights 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
Rights Agreement, including the right and power to (i) interpret the provisions
of this Rights Agreement and (ii) make all determinations deemed necessary or
advisable for the administration of this Rights Agreement (including a
determination to redeem or not redeem the Rights or to amend this Rights
Agreement and a determination of whether there
44
is an Acquiring Person). All such actions, calculations, interpretations and
determinations that are done or made by the Board of Directors of the Company in
good faith shall be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights, as such, and all other parties. The Rights
Agent shall always be entitled to assume that the Company's Board of Directors
acted in good faith and shall be fully protected and incur no liability in
reliance thereon.
(c) Nothing contained in this Rights Agreement shall be deemed
to be in derogation of the obligation of the Board of Directors of the Company
to exercise its fiduciary duty. Without limiting the foregoing, nothing
contained herein shall be construed to suggest or imply that the Board of
Directors shall not be entitled to reject any tender offer or other acquisition
proposal, or to recommend that holders of Common Shares reject any tender offer,
or to take any other action (including the commencement, prosecution, defense or
settlement of any litigation and the submission of additional or alternative
offers or other proposals) with respect to any tender offer or other acquisition
proposal that the Board of Directors believes is necessary or appropriate in the
exercise of such fiduciary duty.
SECTION 29. SEVERABILITY. If any term, provision, covenant or
restriction of this Rights 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 Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
SECTION 30. GOVERNING LAW. This Rights Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the law of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the law of such State applicable to contracts to be
made and performed entirely within such State; PROVIDED, HOWEVER, that all
provisions regarding the rights, duties and obligations of the Rights Agent
shall be governed by and construed in accordance with the laws of the State of
New York applicable to contracts made and to be performed entirely within such
State.
SECTION 31. COUNTERPARTS; EFFECTIVENESS. This Rights 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. This Rights Agreement
shall be effective as of the Close of Business on the date hereof.
SECTION 32. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
of this Rights Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed as of the day and year first above written.
XXXXXX HOLDINGS, INC.
by
---------------------------------
Name:
Title:
MELLON INVESTOR SERVICES LLC,
by
---------------------------------
Name:
Title:
EXHIBIT A
CERTIFICATE OF THE VOTING POWERS,
DESIGNATIONS, PREFERENCES AND RELATIVE
PARTICIPATING, OPTIONAL AND OTHER SPECIAL
RIGHTS AND QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS OF SERIES A
PARTICIPATING CUMULATIVE
PREFERRED STOCK OF
XXXXXX HOLDINGS, INC.
Pursuant to Section 151 of the General Corporation Law of the
State of Delaware, XXXXXX HOLDINGS, INC. (the "COMPANY"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware, in accordance with the provisions of Section 103 thereof, DOES HEREBY
CERTIFY:
That, pursuant to the authority conferred upon the Board of
Directors of the Company by Article 4.02 of the Restated Certificate of
Incorporation of the Company (the "CHARTER"), the Board of Directors of the
Company on [ ], 2001, adopted the following resolution designating a new series
of preferred stock as Series A Participating Cumulative Preferred Stock:
RESOLVED, that, pursuant to the authority vested in the Board
of Directors of the Company in accordance with the provisions of the
Restated Certificate of Incorporation, as amended, of the Company and
the provisions of Section 151(g) of the General Corporation Law of the
State of Delaware, a series of preferred stock of the Company is hereby
authorized, and the designation and number of shares thereof, and the
voting powers, preferences and relative, participating, optional and
other special rights, and the qualifications, limitations or
restrictions thereof, shall be as follows:
SECTION 1. DESIGNATION AND NUMBER OF SHAREs. The shares of
such series shall be designated as "Series A Participating Cumulative Preferred
Stock" (the "SERIES A PREFERRED STOCK"). The number of shares initially
constituting the Series A Preferred Stock shall be 2 million; PROVIDED, HOWEVER,
that, if more than a total of 2 million shares of Series A Preferred Stock shall
be issuable upon the exercise of Rights (the "RIGHTS") issued pursuant to the
Rights Agreement dated as of July 30, 2001, between the Company and Mellon
Investor Services LLC, a New Jersey limited liability company, as Rights Agent ,
as such may be amended from time to time (the "RIGHTS AGREEMENT"), the Board of
Directors of the Company, pursuant to Section 151(g) of the General Corporation
Law of the State of Delaware, shall direct
2
by resolution or resolutions that a certificate be properly executed,
acknowledged, filed and recorded, in accordance with the provisions of Section
103 thereof, providing for the total number of shares of Series A Preferred
Stock authorized to be issued to be increased (to the extent that the Charter
then permits) to the largest number of whole shares (rounded up to the nearest
whole number) issuable upon exercise of such Rights.
SECTION 2. DIVIDENDS OR DISTRIBUTIONS. (a) Subject to the
superior rights of the holders of shares of any other series of Preferred Stock
or other class of capital stock of the Company ranking superior to the shares of
Series A Preferred Stock with respect to dividends, the holders of shares of the
Series A Preferred Stock shall be entitled to receive, when, as and if declared
by the Board of Directors, out of the assets of the Company legally available
therefor, (1) quarterly dividends payable in cash on the last day of each fiscal
quarter in each year, or such other dates as the Board of Directors of the
Company shall approve (each such date being referred to herein as a "QUARTERLY
DIVIDEND PAYMENT DATE"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or a fraction of a share of Series A
Preferred Stock, in the amount of $0.05 per whole share (rounded to the nearest
cent) less the amount of all cash dividends declared on the Series A Preferred
Stock pursuant to the following clause (2) since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock (the total of which shall not, in any event, be less
than zero) and (2) dividends payable in cash on the payment date for each cash
dividend declared on the Common Stock in an amount per whole share (rounded to
the nearest cent) equal to the Formula Number (as hereinafter defined) then in
effect times the cash dividends then to be paid on each share of Common Stock.
In addition, if the Company shall pay any dividend or make any distribution on
the Common Stock payable in assets, securities or other forms of noncash
consideration (other than dividends or distributions solely in shares of Common
Stock), then, in each such case, the Company shall simultaneously pay or make on
each outstanding whole share of Series A Preferred Stock a dividend or
distribution in like kind equal to the Formula Number then in effect times such
dividend or distribution on each share of the Common Stock. As used herein, the
"FORMULA NUMBER" shall be 1,000; PROVIDED, HOWEVER, that, if at any time after
August 5, 2001, the Company shall (i) declare or pay any dividend on the Common
Stock payable in shares of Common Stock or make any distribution on the Common
Stock in shares of Common Stock, (ii) subdivide (by a stock split or otherwise)
the outstanding
3
shares of Common Stock into a larger number of shares of Common Stock or (iii)
combine (by a reverse stock split or otherwise) the outstanding shares of Common
Stock into a smaller number of shares of Common Stock, then in each such event
the Formula Number shall be adjusted to a number determined by multiplying the
Formula Number in effect immediately prior to such event by a fraction, the
numerator of which is the number of shares of Common Stock that are outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that are outstanding immediately prior to such event (and
rounding the result to the nearest whole number); and PROVIDED FURTHER that, if
at any time after August 5, 2001, the Company shall issue any shares of its
capital stock in a merger, reclassification, or change of the outstanding shares
of Common Stock, then in each such event the Formula Number shall be
appropriately adjusted to reflect such merger, reclassification or change so
that each share of Preferred Stock continues to be the economic equivalent of a
Formula Number of shares of Common Stock prior to such merger, reclassification
or change.
(b) The Company shall declare a dividend or distribution on
the Series A Preferred Stock as provided in Section 2(a) immediately prior to or
at the same time it declares a dividend or distribution on the Common Stock
(other than a dividend or distribution solely in shares of Common Stock);
PROVIDED, HOWEVER, that, in the event no dividend or distribution (other than a
dividend or distribution in shares of Common Stock) shall have been declared on
the Common Stock during the period between any Quarterly Dividend Payment Date
and the next subsequent Quarterly Dividend Payment Date, a dividend of $0.05 per
share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a dividend or distribution declared thereon, which
record date shall be the same as the record date for any corresponding dividend
or distribution on the Common Stock.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from and after the Quarterly
Dividend Payment Date next preceding the date of original issue of such shares
of Series A Preferred Stock; PROVIDED, HOWEVER, that dividends on such shares
which are originally issued after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a quarterly
dividend and on or prior to the next succeeding Quarterly Dividend Payment Date
shall begin to accrue and be cumulative from and after such
4
Quarterly Dividend Payment Date. Notwithstanding the foregoing, dividends on
shares of Series A Preferred Stock which are originally issued prior to the
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend on the first Quarterly Dividend
Payment Date shall be calculated as if cumulative from and after the last day of
the fiscal quarter next preceding the date of original issuance of such shares.
Accrued but unpaid dividends shall not bear interest. Dividends paid on the
shares of Series A Preferred Stock in an amount less than the total amount of
such dividends at the time accrued and payable on such shares shall be allocated
pro rata on a share-by-share basis among all such shares at the time
outstanding.
(d) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends or other distributions shall be declared, paid or
distributed, or set aside for payment or distribution, on the Common Stock
unless, in each case, the dividend required by this Section 2 to be declared on
the Series A Preferred Stock shall have been declared.
(e) The holders of the shares of Series A Preferred Stock
shall not be entitled to receive any dividends or other distributions except as
provided herein.
SECTION 3. VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Each holder of Series A Preferred Stock shall be entitled
to a number of votes equal to the Formula Number then in effect, for each share
of Series A Preferred Stock held of record on each matter on which holders of
the Common Stock or stockholders generally are entitled to vote, multiplied by
the maximum number of votes per share which any holder of the Common Stock or
stockholders generally then have with respect to such matter (assuming any
holding period or other requirement to vote a greater number of shares is
satisfied).
(b) Except as otherwise provided herein or by applicable law,
the holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class for the election of directors of
the Company and on all other matters submitted to a vote of stockholders of the
Company.
(c) If, at the time of any annual meeting of stockholders for
the election of directors, the equivalent of six quarterly dividends (whether or
not consecutive) payable
5
on any share or shares of Series A Preferred Stock are in default, the number of
directors constituting the Board of Directors of the Company shall be increased
by two. In addition to voting together with the holders of Common Stock for the
election of other directors of the Company, the holders of record of the Series
A Preferred Stock, voting separately as a class to the exclusion of the holders
of Common Stock, shall be entitled at said meeting of stockholders (and at each
subsequent annual meeting of stockholders), unless all dividends in arrears have
been paid or declared and set apart for payment prior thereto, to vote for the
election of two directors of the Company, the holders of any Series A Preferred
Stock being entitled to cast a number of votes per share of Series A Preferred
Stock equal to the Formula Number. Each such additional director shall not be
classified, but shall serve until the next annual meeting of stockholders for
the election of directors, or until his successor shall be elected and shall
qualify, or until his right to hold such office terminates pursuant to the
provisions of this Section 3(c). Until the default in payments of all dividends
which permitted the election of said directors shall cease to exist, any
director who shall have been so elected pursuant to the next preceding sentence
may be removed at any time, without cause, only by the affirmative vote of the
holders of the shares of Series A Preferred Stock at the time entitled to cast a
majority of the votes entitled to be cast for the election of any such director
at a special meeting of such holders called for that purpose, and any vacancy
thereby created may be filled by the vote of such holders. If and when such
default shall cease to exist, the holders of the Series A Preferred Stock shall
be divested of the foregoing special voting rights, subject to revesting in the
event of each and every subsequent like default in payments of dividends. Upon
the termination of the foregoing special voting rights, the terms of office of
all persons who may have been elected directors pursuant to said special voting
rights shall forthwith terminate, and the number of directors constituting the
Board of Directors shall be reduced by two. The voting rights granted by this
Section 3(c) shall be in addition to any other voting rights granted to the
holders of the Series A Preferred Stock in this Section 3.
(d) Except as provided herein, in Section 11 or by applicable
law, holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for authorizing or taking
any corporate action.
SECTION 4. CERTAIN RESTRICTIONS. (a) Whenever quarterly
dividends or other dividends or distributions
6
payable on the Series A Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid in full, the Company shall not
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends or
upon liquidation, dissolution or winding up) with the Series A
Preferred Stock, except dividends paid ratably on the Series A
Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock; PROVIDED, HOWEVER, that the Company may at any time redeem,
purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Company ranking junior (either
as to dividends or upon dissolution, liquidation or winding up) to the
Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares
of Series A Preferred Stock, or any shares of stock ranking on a parity
with the Series A Preferred Stock, except in accordance with a purchase
offer made in writing or by publication (as determined by the Board of
Directors) to all holders of such shares upon such terms as the Board
of Directors, after consideration of the respective annual dividend
rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or classes.
(b) The Company shall not permit any subsidiary of the Company
to purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under Section 4(a), purchase or otherwise
acquire such shares at such time and in such manner.
7
SECTION 5. LIQUIDATION RIGHTS. Upon the liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary, no
distribution shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received an amount equal to the accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment, plus an amount equal to the greater of (x) $1,000 per whole share
or (y) an aggregate amount per share equal to the Formula Number then in effect
times the aggregate amount to be distributed per share to holders of Common
Stock or (2) to the holders of stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A Preferred
Stock, except distributions made ratably on the Series A Preferred Stock and all
other such parity stock in proportion to the total amounts to which the holders
of all such shares are entitled upon such liquidation, dissolution or winding
up. Neither the merger or consolidation of the Company into or with another
entity nor the merger or consolidation of any other entity into or with the
Company shall be deemed to be a liquidation, dissolution or winding up of the
Company within the meaning of this Section 5.
SECTION 6. CONSOLIDATION, MERGER, ETC. In case the Company
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash or any other property, then in any such case the then
outstanding shares of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share equal to the Formula
Number then in effect times the aggregate amount of stock, securities, cash or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is exchanged or changed. In the event both this
Section 6 and Section 2 appear to apply to a transaction, this Section 6 will
control.
SECTION 7. NO REDEMPTION; NO SINKING FUND. (a) The shares of
Series A Preferred Stock shall not be subject to redemption by the Company or at
the option of any holder of Series A Preferred Stock; PROVIDED, HOWEVER, that,
subject to Section 4(a)(iv), the Company may purchase or otherwise acquire
outstanding shares of Series A Preferred Stock in the open market or by offer to
any holder or holders of shares of Series A Preferred Stock.
8
(b) The shares of Series A Preferred Stock shall not be
subject to or entitled to the operation of a retirement or sinking fund.
SECTION 8. RANKING. The Series A Preferred Stock shall rank
junior to all other series of Preferred Stock of the Company as to the payment
of dividends and as to the distribution of assets upon liquidation, dissolution
or winding up, unless the Board of Directors shall specifically determine
otherwise in fixing the powers, preferences and relative, participating,
optional and other special rights of the shares of such series and the
qualifications, limitations and restrictions thereof.
SECTION 9. REACQUIRED SHARES. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Company in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock, without designation as to series until such shares are once
more designated as part of a particular series by the Board of Directors
pursuant to the provisions of the Charter.
SECTION 10. AMENDMENT. None of the powers, preferences and
relative, participating, optional and other special rights of the Series A
Preferred Stock as provided herein shall be amended in any manner which would
alter or change the powers, preferences, rights or privileges of the holders of
Series A Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least 66-2/3% of the outstanding shares of Series A
Preferred Stock, voting as a separate class.
IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed in its corporate name on this [ ]th day of [ ], 200[ ].
XXXXXX HOLDINGS, INC.,
by
------------------------------
Name:
Title:
EXHIBIT B
[Form of Right Certificate]
Certificate No. R-
----------- Rights
NOT EXERCISABLE AFTER AUGUST 5, 2011, OR EARLIER IF REDEEMED OR
EXCHANGED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT
THE OPTION OF THE COMPANY, AT $.01 PER RIGHT, AND ARE SUBJECT TO
EXCHANGE, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED
IN THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF ARE NULL
AND VOID AND ARE NO LONGER TRANSFERABLE.
Right Certificate
XXXXXX HOLDINGS, 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 July 30, 2001 as it may be
amended from time to time (the "RIGHTS AGREEMENT"), between XXXXXX HOLDINGS,
INC., a Delaware corporation (the "COMPANY"), and Mellon Investor Services LLC,
as Rights Agent (the "RIGHTS AGENT"), unless the Rights evidenced hereby shall
have been previously redeemed or exchanged by the Company, to purchase from the
Company at any time after the Distribution Date (as defined in the Rights
Agreement) and prior to 5:00 p.m.,
New York City time, on the 10th anniversary
of the date of the Rights Agreement (the "EXPIRATION DATE"), at the principal
office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-thousandth (1/1,000th) of a fully paid,
nonassessable share of Series A Participating Cumulative Preferred Stock, $.01
par value, of the Company (the "PREFERRED SHARES"), at a purchase price per one
one-thousandth (1/1,000th) of a share equal to $140.00 (the "PURCHASE PRICE")
payable in cash, upon presentation and surrender of this Right Certificate with
the Form of Election to Purchase duly executed.
The Purchase Price and the number and kind of shares which may
be purchased upon exercise of each Right evidenced by this Right Certificate, as
set forth above, are the Purchase Price and the number and kind of shares which
may be
2
so purchased as of August 5, 2001. As provided in the Rights Agreement, the
Purchase Price and the number and kind of shares which may be purchased upon the
exercise of each Right evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain events.
If the Rights evidenced by this Right Certificate are at any
time beneficially owned by an Acquiring Person or an Affiliate or Associate of
an Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and nontransferable and the holder of any such
Right (including any purported transferee or subsequent holder) shall not have
any right to exercise or transfer any such Right.
This Right Certificate is subject to all 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
reference to the Rights Agreement is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates. Copies
of the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are also available from the Company upon written request.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal stock transfer or corporate trust
office of the Rights Agent, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number and kind of shares as the Rights evidenced
by the Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at its option
at a redemption price (in cash or shares of Common Stock or other securities of
the Company deemed by the Board of Directors to be at least equivalent in value)
of $.01 per Right (which amount shall be subject to adjustment as provided in
the Rights Agreement) at any time prior to the earlier of (i) such time as a
Person becomes an Acquiring Person and (ii) the Expiration Date.
3
The Company may, but shall not be required to, issue fractions
of Preferred Shares (other than one one-thousandth (1/1,000th) of a share or any
integral multiple thereof) or distribute certificates which evidence fractions
of Preferred Shares (other than one one-thousandth (1/1,000th) of a share or any
integral multiple thereof) upon the exercise of any Right or Rights evidenced
hereby. In lieu of issuing fractional shares, the Company may elect to make a
cash payment as provided in the Rights Agreement for fractions of a share other
than one one-thousandth (1/1,000th) of a share or any integral multiple thereof
or to issue certificates or utilize a depository arrangement as provided in the
terms of the Rights Agreement and the Preferred Shares.
No holder of this Right Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
the Preferred Shares or of any other securities of the Company which may at any
time be issuable on the exercise or exchange 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,
including, without limitation, any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or other distributions or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised or exchanged as provided in accordance
with the provisions of the Rights Agreement.
This Right Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by an authorized signatory of
the Rights Agent.
4
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of:
XXXXXX HOLDINGS, INC.,
by
------------------------------
Name:
Title:
Attest:
-------------------------
Name:
Title:
Date of countersignature:
Countersigned:
MELLON INVESTOR SERVICES LLC,
as Rights Agent,
by
------------------------
Authorized Signatory
5
[On Reverse Side of Right Certificate]
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if
such holder desires to exercise the Rights
represented by this Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise
_____________ Rights represented by this Right Certificate to purchase the
Preferred Shares (or other shares) issuable upon the exercise of such Rights and
requests that certificates for such shares be issued in the name of:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
6
If such number of Rights shall not be all the
Rights evidenced by this Right Certificate, a new Right
Certificate for the balance remaining of such Rights shall
be registered in the name of and delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated:
---------------, --------
--------------------------
Signature
Signature Guaranteed:
7
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
the Right Certificate.)
FOR VALUE RECEIVED _______________________________
hereby sells, assigns and transfer unto _______________________________________
_______________________________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ______________ Attorney, to
transfer the within Right Certificate on the books of the within-named
Corporation, with full power of substitution.
Dated:
--------------, ----------
------------------------------
Signature
Signature Guaranteed:
The undersigned hereby certifies that (1) the Rights evidenced
by this Right Certificate are not being sold, assigned or transferred by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement), (2) this
Rights Certificate is not being sold, assigned or transferred to or on behalf of
any such Acquiring Person, Affiliate or Associate and (3) after inquiry and to
the best knowledge of the undersigned, the undersigned did not acquire the
Rights evidenced by this Right Certificate from any Person who is or was an
Acquiring Person or an Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement).
------------------------------
Signature
8
NOTICE
The signature on the foregoing Form of Election to Purchase or
Form of Assignment must correspond to the name as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or any
change whatsoever.
EXHIBIT C
RIGHTS BENEFICIALLY OWNED BY ANY ACQUIRING PERSONS AND CERTAIN TRANSFEREES
THEREOF ARE NULL AND VOID AND ARE NO LONGER TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
SERIES A PARTICIPATING CUMULATIVE PREFERRED STOCK
OF XXXXXX HOLDINGS, INC.
On August 5, 2001, the Board of Directors of XXXXXX HOLDINGS,
INC. (the "COMPANY") declared a dividend of one Right for each outstanding share
of Common Stock, par value $0.01 per share, of the Company (the "COMMON
SHARES"). The Rights will be issued to the holders of record of Common Shares
outstanding at August 5, 2001 (the "RECORD DATE") and with respect to Common
Shares issued thereafter until the Distribution Date (as defined below). Each
Right, when it becomes exercisable as described below, will entitle the
registered holder to purchase from the Company one one-thousandth (1/1,000th) of
a share of Series A Participating Cumulative Preferred Stock, par value $0.01
per share, of the Company (the "PREFERRED SHARES") at a price of $140.00 (the
"PURCHASE PRICE"). The description and terms of the Rights are set forth in a
Rights Agreement dated as of July 30, 2001 as it may be amended from time to
time (the "RIGHTS AGREEMENT"), between the Company and Mellon Investor Services
LLC, as Rights Agent (the "RIGHTS AGENT").
2
Until the earlier of (i) such time as the Company learns that
a person or group (including any affiliate or associate of such person or group)
has acquired, or obtained the right to acquire, beneficial ownership of more
than 15% of the outstanding Common Shares (such person or group being called an
"ACQUIRING PERSON"), and (ii) such date, if any, as may be designated by the
Board of Directors of the Company following the commencement of, or first public
disclosure of an intention to commence, a tender or exchange offer for
outstanding Common Shares which could result in such person or group becoming
the beneficial owner of more than 15% of the outstanding Common Shares, (the
earlier of such dates being called the "DISTRIBUTION DATE"), the Rights will be
evidenced by certificates for Common Shares registered in the names of the
holders thereof (which certificates for Common Shares shall also be deemed to be
Right Certificates (as defined below)) and not by separate Right Certificates.
With respect to any certificate for Common Shares outstanding as of the Record
Date, until the Distribution Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates along
with a copy of this Summary of Rights, and the surrender for transfer of any
such certificate shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby.
3
Therefore, until the Distribution Date, the Rights will be transferred with and
only with the Common Shares.
As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("RIGHT CERTIFICATES") will be
mailed to holders of record of the Common Shares as of the close of business on
the Distribution Date, and such separate Right Certificates alone will
thereafter evidence the Rights.
THE RIGHTS ARE NOT EXERCISABLE UNTIL THE DISTRIBUTION DATE and
will expire at August 5, 2011 (the "EXPIRATION DATE"), unless earlier redeemed
or exchanged by the Company as described below.
The number of Preferred Shares or other securities issuable
upon exercise of the Rights is subject to adjustment by the Board of Directors
of the Company in the event of any change in the Common Shares or Preferred
Shares, whether by reason of stock dividends, stock splits, recapitalizations,
reclassifications, mergers, consolidations, combinations or exchanges of
securities, split-ups, split-offs, spin-offs, liquidations, other similar
changes in capitalization, any distribution or issuance of assets, evidences of
indebtedness or subscription rights, options or warrants to holders of
4
Common Shares or Preferred Shares or otherwise. The Purchase Price and the
number of Preferred Shares or other securities issuable upon exercise of the
Rights are subject to adjustment from time to time in the event of the
declaration of a stock dividend on the Common Shares payable in Common Shares or
a subdivision or combination of the Common Shares prior to the Distribution
Date.
The Preferred Shares are authorized to be issued in fractions
which are an integral multiple of one one-thousandth (1/1,000th) of a Preferred
Share. The Company may, but (other than in the case of fractions of Preferred
Shares which are an integral multiple of one one-thousandth (1/1,000th) of a
Preferred Share) is not required to, issue fractions of shares upon the exercise
of Rights, and in lieu of such fractional shares (other than one one-thousandths
(1/1,000ths) of a Preferred Share), the Company may make a cash payment based on
the market price of such shares on the first trading date prior to the date of
exercise or utilize a depositary arrangement as provided by the terms of the
Preferred Shares.
Subject to the right of the Board of Directors of the Company
to redeem or exchange the Rights as described below, at such time as there is an
Acquiring Person, the holder of each Right will thereafter have the right to
5
receive, upon exercise thereof, for the Purchase Price, that number of one
one-thousandths of a Preferred Share equal to the number of Common Shares which
at the time of such transaction would have a market value of twice the Purchase
Price. Any Rights that are or were beneficially owned by an Acquiring Person on
or after the Distribution Date will become null and void and will not be subject
to the "flip-in" provision.
In the event that after a person becomes an Acquiring Person,
the Company is acquired in a merger or other business combination by a person
that is a publicly traded corporation or 50% or more of the Company's assets or
assets representing 50% or more of the Company's earning power are sold, leased,
exchanged or otherwise transferred (in one or more transactions) to a person
that is a publicly traded corporation, proper provision must be made so that
each Right will entitle its holder to purchase, for the Purchase Price, that
number of common shares of such corporation which at the time of the transaction
would have a market value of twice the Purchase Price. In the event that after a
person becomes an Acquiring Person, the Company is acquired in a merger or other
business combination by a person that is not a publicly traded entity or 50% or
more of the Company's assets or assets representing 50% or more of the earning
power of the Company are sold, leased,
6
exchanged or otherwise transferred (in one or more transactions) to a person
that is not a publicly traded entity, proper provision must be made so that each
Right will entitle its holder to purchase, for the Purchase Price, at such
holder's option, (i) that number of shares of the surviving corporation in the
transaction with such entity (or, at such holder's option, of the surviving
corporation in such acquisition, which could be the Company) which at the time
of the transaction would have a book value of twice the Purchase Price or (ii)
that number of shares of such entity which at the time of the transaction would
have a book value of twice the Purchase Price or (iii) if such entity has an
affiliate which has publicly traded common shares, that number of common shares
of such affiliate which at the time of the transaction would have a market value
of twice the Purchase Price.
ANY RIGHTS THAT ARE OR WERE, AT ANY TIME ON OR AFTER THE DATE
AN ACQUIRING PERSON BECOMES SUCH, BENEFICIALLY OWNED BY AN ACQUIRING PERSON (OR
CERTAIN TRANSFEREES THEREOF) WILL BECOME NULL AND VOID AND ANY HOLDER OF ANY
SUCH RIGHT (INCLUDING CERTAIN TRANSFEREES THEREOF) WILL BE UNABLE TO EXERCISE OR
TRANSFER ANY SUCH RIGHT.
7
The Rights are redeemable by the Board of Directors at a
redemption price of $.01 per Right (the "REDEMPTION PRICE") any time prior to
the earlier of (i) such time as there is an Acquiring Person and (ii) the
Expiration Date. Immediately upon the effectiveness of the action of the Board
electing to redeem the Rights, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
After there is an Acquiring Person the Board of Directors may
elect to exchange each Right (other than Rights owned by an Acquiring Person)
for consideration per Right consisting of one-half of the securities that would
be issuable at such time upon the exercise of one Right pursuant to the terms of
the Rights Agreement. Notwithstanding the foregoing, the Board of Directors of
the Company shall not be empowered to effect such exchange at any time after any
person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or any such Subsidiary, or any entity holding Common
Shares for or pursuant to the terms of any such plan), together with all
Affiliates and Associates of such person, becomes the Beneficial Owner of 50% or
more of the Common Shares then outstanding.
8
At any time prior to such time as there shall be an Acquiring
Person, the Company may, without the approval of any holder of the Rights,
supplement or amend any provision of the Rights Agreement (including the date on
which the Expiration Date or the Distribution Date shall occur, the amount of
the Purchase Price or the definition of "ACQUIRING PERSON"), except that no
supplement or amendment shall be made that reduces the Redemption Price of the
Rights.
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.
A copy of the Rights Agreement, including the terms of the
Preferred Shares, will be filed with the Securities and Exchange Commission as
an Exhibit to a Registration Statement on Form 10. A copy of the Rights
Agreement is available free of charge from the Company upon written request.
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.
