AMENDED AND RESTATED STOCKHOLDER PROTECTION RIGHTS AGREEMENT dated as of October 1, 2009 between MORGANS HOTEL GROUP CO. and MELLON INVESTOR SERVICES LLC, as Rights Agent
Exhibit 4.1
AMENDED AND RESTATED STOCKHOLDER PROTECTION RIGHTS
AGREEMENT
dated as of
October 1, 2009
between
and
MELLON INVESTOR SERVICES LLC,
as Rights Agent
AMENDED AND RESTATED STOCKHOLDER PROTECTION RIGHTS
AGREEMENT
AGREEMENT
Table of Contents
| Page | ||||
| ARTICLE I |
||||
| DEFINITIONS |
||||
1.1 Definitions |
2 | |||
| ARTICLE II |
||||
| THE RIGHTS |
||||
2.1 Summary of Rights |
7 | |||
2.2 Legend on Common Stock Certificates |
7 | |||
2.3 Exercise of Rights; Separation of Rights |
8 | |||
2.4 Adjustments to Exercise Price; Number of Rights |
10 | |||
2.5 Date on Which Exercise is Effective |
12 | |||
2.6 Execution, Authentication, Delivery and Dating of Rights Certificates |
12 | |||
2.7 Registration, Registration of Transfer and Exchange |
12 | |||
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates |
13 | |||
2.9 Persons Deemed Owners |
14 | |||
2.10 Delivery and Cancellation of Certificates |
14 | |||
2.11 Agreement of Rights Holders |
14 | |||
| ARTICLE III |
||||
| ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS |
||||
3.1 Flip-in |
15 | |||
3.2 Flip-over |
18 | |||
| ARTICLE IV |
||||
| THE RIGHTS AGENT |
||||
4.1 General |
19 | |||
4.2 Merger or Consolidation or Change of Name of Rights Agent |
20 | |||
4.3 Duties of Rights Agent |
20 | |||
4.4 Change of Rights Agent |
23 | |||
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| Page | ||||
| ARTICLE V |
||||
| MISCELLANEOUS |
||||
5.1 Redemption |
23 | |||
5.2 Expiration |
24 | |||
5.3 Issuance of New Rights Certificates |
24 | |||
5.4 Supplements and Amendments |
24 | |||
5.5 Fractional Shares |
25 | |||
5.6 Rights of Action |
25 | |||
5.7 Holder of Rights Not Deemed a Stockholder |
26 | |||
5.8 Notice of Proposed Actions |
26 | |||
5.9 Notices |
26 | |||
5.10 Suspension of Exercisability or Exchangeability |
27 | |||
5.11 Costs of Enforcement |
27 | |||
5.12 Successors |
28 | |||
5.13 Benefits of this Agreement |
28 | |||
5.14 Determination and Actions by the Board of Directors, etc |
28 | |||
5.15 Descriptive Headings; Section References |
28 | |||
5.16 GOVERNING LAW |
28 | |||
5.17 Counterparts |
29 | |||
5.18 Severability |
29 | |||
5.19 Force Majeure |
29 | |||
EXHIBITS
| Exhibit A | Form of Rights Certificate (together with Form of Election to
Exercise) |
|
| Exhibit B | Form of Certificate of Designation and Terms of Participating
Preferred Stock |
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AMENDED AND RESTATED STOCKHOLDER PROTECTION RIGHTS
AGREEMENT
AMENDED AND RESTATED STOCKHOLDER PROTECTION RIGHTS AGREEMENT (as amended from time to time,
this “Agreement”), dated as of October 1, 2009, between Morgans Hotel Group Co., a Delaware
corporation (the “Company”), and Mellon Investor Services LLC, a New Jersey limited liability
company, as Rights Agent (the “Rights Agent,” which term shall include any successor Rights Agent
hereunder).
WITNESSETH:
WHEREAS, the Company and the Rights Agent entered into a Stockholder Protection Rights
Agreement, dated as of October 9, 2007 (hereinafter referred to as the “Original Rights Agreement”)
with respect to the declaration of one right (“Right”) in respect of each share of Common Stock (as
hereinafter defined) held of record as of the close of business on October 19, 2007 (the “Record
Time”) payable in respect of each such share upon the later of October 19, 2007 and certification
by The Nasdaq Stock Market, Inc. to the Securities and Exchange Commission that the Rights had been
approved for listing and registration (the “Payment Time”) and (b) as provided in Section 2.4 of
the Original Rights Agreement, authorized the issuance of one Right in respect of each share of
Common Stock issued after the Record Time and prior to the Separation Time (as defined in the
Original Rights Agreement) and, to the extent provided in Section 5.3 of the Original Rights
Agreement, each share of Common Stock issued after the Separation Time;
WHEREAS, the Original Rights Agreement was amended on July 25, 2008 to amend the definition of
the Expiration Time, as defined in the Original Rights Agreement;
WHEREAS, pursuant to Section 5.4 of the Original Rights Agreement, the Company may amend the
Original Rights Agreement in any respect prior to the Flip-in Date (as defined in the Original
Rights Agreement) without the consent of the holders of Rights;
WHEREAS, the Flip-in Date, as defined in the Original Rights Agreement, has not occurred; and
WHEREAS, the Company and the Rights Agent wish to amend and restate the Original Rights
Agreement in its entirety as follows:
NOW THEREFORE, in consideration of the premises and the respective agreements set forth
herein, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
1.1 Definitions. For purposes of this Agreement, the following terms have the
meanings indicated:
“Acquiring Person” shall mean any Person who is or becomes the Beneficial Owner of 15% or more
of the outstanding shares of Common Stock; provided, however, that the term
“Acquiring Person” shall not include any Person (i) who is the Beneficial Owner of 15% or more of
the outstanding shares of Common Stock on the date of the Original Rights Agreement, or who shall
become the Beneficial Owner of 15% or more of the outstanding shares of Common Stock solely as a
result of an acquisition by the Company of shares of Common Stock, until such time after the date
of the Original Rights Agreement or thereafter as such Person shall become the Beneficial Owner
(other than by means of a stock dividend or stock split) of any additional shares of Common Stock
while such Person is or as a result of which such Person becomes the Beneficial Owner of 15% or
more of the outstanding shares of Common Stock, (ii) who becomes the Beneficial Owner of 15% or
more of the outstanding shares of Common Stock but who acquired Beneficial Ownership of shares of
Common Stock without any plan or intention to seek or affect control of the Company, if such Person
promptly divests, or promptly enters into an agreement with, and satisfactory to, the Company, in
its sole discretion, to divest (without exercising or retaining any power, including voting power,
with respect to such shares), sufficient shares of Common Stock (or securities convertible into,
exchangeable into or exercisable for Common Stock) so that such Person ceases to be the Beneficial
Owner of 15% or more of the outstanding shares of Common Stock or (iii) who Beneficially Owns
shares of Common Stock consisting solely of one or more of (A) shares of Common Stock Beneficially
Owned pursuant to the grant or exercise of an option granted to such Person (an “Option Holder”) by
the Company in connection with an agreement to merge with, or acquire, the Company entered into
prior to a Flip-in Date, (B) shares of Common Stock (or securities convertible into, exchangeable
into or exercisable for Common Stock) Beneficially Owned by such Option Holder or its Affiliates or
Associates at the time of grant of such option, and (C) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock) acquired by Affiliates or
Associates of such Option Holder after the time of such grant that, in the aggregate, amount to
less than 1% of the outstanding shares of Common Stock. In addition, the Company, any Subsidiary
of the Company and any employee stock ownership or other employee benefit plan of the Company or a
Subsidiary of the Company (or any entity or trustee holding shares of Common Stock for or pursuant
to the terms of any such plan or for the purpose of funding any such plan or funding other employee
benefits for employees of the Company or of any Subsidiary of the Company) shall not be an
Acquiring Person.
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“Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in
Rule 12b-2 under the Exchange Act, as such Rule is in effect on the date of this Agreement.
“Agreement” shall have the meaning set forth in the Preamble.
A Person shall be deemed the “Beneficial Owner,” and to have “Beneficial Ownership” of, and to
“Beneficially Own,” (i) any securities as to which such Person or any of such Person’s Affiliates
or Associates is or may be deemed to be the beneficial owner of pursuant to Rule 13d-3 and 13d-5 of
the General Rules and Regulations under the Exchange Act, as such Rules are in effect on the date
of this Agreement and (ii) any securities as to which such Person or any of such Person’s
Affiliates or Associates has the right to become beneficial owner (whether such right is
exercisable immediately or only after the passage of time or the occurrence of conditions) pursuant
to any agreement, arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public offering of securities),
or upon the exercise of conversion rights, exchange rights, rights (other than the Rights),
warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the “Beneficial Owner,” or to have “Beneficial Ownership” of, or to “Beneficially Own,” any
security (A) solely because such security has been tendered pursuant to a tender or exchange offer
made by such Person or any of such Person’s Affiliates or Associates until such tendered security
is accepted for payment or exchange or (B) solely because such Person or any of such Person’s
Affiliates or Associates has or shares the power to vote or direct the voting of such security
pursuant to a revocable proxy or consent given in response to a public proxy or consent
solicitation made to more than ten holders of shares of a class of stock of the Company registered
under Section 12 of the Exchange Act and pursuant to, and in accordance with, the applicable rules
and regulations under the Exchange Act, except if such power (or the arrangements relating thereto)
is then reportable under Item 6 of Schedule 13D under the Exchange Act (or any similar provision of
a comparable or successor report). For purposes of this Agreement, in determining the percentage
of the outstanding shares of Common Stock with respect to which a Person is the Beneficial Owner,
all shares as to which such Person is deemed the Beneficial Owner shall be deemed outstanding.
“Business Day” shall mean any day other than a Saturday, Sunday or a day on which banking
institutions in New York, New York and the State of New Jersey are generally authorized or
obligated by law or executive order to close.
“Close of Business” on any given date shall mean 5:00 p.m. New York City time on such date or,
if such date is not a Business Day, 5:00 p.m. New York City time on the next succeeding Business
Day.
“Common Stock” shall mean the shares of Common Stock, par value $0.01 per share, of the
Company.
“Company” shall have the meaning set forth in the preamble.
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“Election to Exercise” shall have the meaning set forth in Section 2.3(d).
“Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
“Exchange Ratio” shall have the meaning set forth in Section 3.1(c).
“Exchange Time” shall mean the time at which the right to exercise the Rights shall terminate
pursuant to Section 3.1(c).
“Exercise Price” shall mean, as of any date, the price at which a holder may purchase the
securities issuable upon exercise of one whole Right. Until adjustment thereof in accordance with
the terms hereof, the Exercise Price shall equal $100.00.
“Expansion Factor” shall have the meaning set forth in Section 2.4(a).
“Expiration Time” shall mean the earliest of (i) the Exchange Time, (ii) the Redemption Time,
(iii) the Close of Business on October 9, 2012, unless, for purposes of this clause (iii), extended
by action of the Board of Directors (in which case the applicable time shall be the time at which
it has been so extended) and (iv) immediately prior to the effective time of a consolidation,
merger or statutory share exchange that does not constitute a Flip-over Transaction or Event.
“Flip-in Date” shall mean the tenth business day after any Stock Acquisition Date or such
earlier or later date and time as the Board of Directors of the Company may from time to time fix
by resolution adopted prior to the Flip-in Date that would otherwise have occurred.
“Flip-over Entity,” for purposes of Section 3.2, shall mean (i) in the case of a Flip-over
Transaction or Event described in clause (i) of the definition thereof, the Person issuing any
securities into which shares of Common Stock are being converted or exchanged and, if no such
securities are being issued, the other Person that is a party to such Flip-over Transaction or
Event and (ii) in the case of a Flip-over Transaction or Event referenced in clause (ii) of the
definition thereof, the Person receiving the greatest portion of the (A) assets or (B) operating
income or cash flow being transferred in such Flip-over Transaction or Event, provided in
all cases if such Person is a Subsidiary of another Person, the ultimate parent entity of such
Person shall be the Flip-over Entity.
“Flip-over Stock” shall mean the capital stock (or similar equity interest) with the greatest
voting power in respect of the election of directors (or other persons similarly responsible for
the direction of the business and affairs) of the Flip-over Entity.
“Flip-over Transaction or Event” shall mean a transaction or series of transactions, on or
after a Flip-in Date, in which, directly or indirectly, (i) the Company shall consolidate or merge
or participate in a statutory share exchange with any other Person if, at the time of consummation
of the consolidation, merger or statutory share
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exchange or at the time the Company enters into any agreement with respect to any such
consolidation, merger or statutory share exchange, the Acquiring Person is the Beneficial Owner of
90% or more of the outstanding shares of Common Stock or controls the Board of Directors of the
Company and either (A) any term of or arrangement concerning the treatment of shares of capital
stock in such consolidation, merger or statutory share exchange relating to the Acquiring Person is
not identical to the terms and arrangements relating to other holders of the Common Stock or (B)
the Person with whom the transaction or series of transactions occurs is the Acquiring Person or an
Affiliate or Associate of the Acquiring Person or (ii) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer) assets (A) aggregating more
than 50% of the assets (measured by either book value or fair market value) or (B) generating more
than 50% of the operating income or cash flow, of the Company and its Subsidiaries (taken as a
whole) to any Person (other than the Company or one or more of its wholly owned Subsidiaries) or to
two or more such Persons that are Affiliates or Associates or otherwise acting in concert, if, at
the time of the entry by the Company (or any such Subsidiary) into an agreement with respect to
such sale or transfer of assets, the Acquiring Person or any of its Affiliates or Associates
controls the Board of Directors of the Company. For purposes of the foregoing description, the
term “Acquiring Person” shall include any Acquiring Person and its Affiliates and Associates,
counted together as a single Person. An Acquiring Person shall be deemed to control the Company’s
Board of Directors when, on or following a Stock Acquisition Date, the persons who were directors
of the Company (or persons nominated and/or appointed as directors by vote of a majority of such
persons) before the Stock Acquisition Date shall cease to constitute a majority of the Company’s
Board of Directors.
“Market Price” per share of any securities on any date shall mean the average of the daily
closing prices per share of such securities (determined as described below) on each of the 20
consecutive Trading Days through and including the Trading Day immediately preceding such date;
provided, however, that if any event described in Section 2.4, or any analogous
event, shall have caused the closing prices used to determine the Market Price on any Trading Days
during such period of 20 Trading Days not to be fully comparable with the closing price on such
date, each such closing price so used shall be appropriately adjusted in order to make it fully
comparable with the closing price on such date. The closing price per share of any securities on
any date shall be the last reported sale price, regular way, or, in case no such sale takes place
or is quoted on such date, the average of the closing bid and asked prices, regular way, for each
share of such securities, in either case as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the securities are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the securities are listed
or admitted to trading or, if the securities are not listed or admitted to trading on any national
securities exchange, as reported by such other system then in use, or, if on any such date the
securities are not listed or admitted to trading on any national securities exchange or quoted by
any such organization, the average of the closing bid
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and asked prices as furnished by a professional market maker making a market in the securities
selected by the Board of Directors of the Company; provided, however, that if on
any such date the securities are not listed or admitted to trading on a national securities
exchange or traded in the over-the-counter market, the closing price per share of such securities
on such date shall mean the fair value per share of such securities on such date as determined in
good faith by the Board of Directors of the Company, after consultation with a nationally
recognized investment banking firm, and set forth in a certificate delivered to the Rights Agent.
“Option Holder” shall have the meaning set forth in the definition of Acquiring Person.
“Payment Time” shall have the meaning set forth in the Recitals.
“Person” shall mean any individual, firm, partnership, limited liability company, association,
group (as such term is used in Rule 13d-5 under the Exchange Act, as such Rule is in effect on the
date of this Agreement), corporation or other entity.
“Preferred Stock” shall mean the series of Participating Preferred Stock, par value $0.01 per
share, of the Company created by a Certificate of Designation and Terms in substantially the form
set forth in Exhibit B hereto appropriately completed.
“Record Time” shall have the meaning set forth in the Recitals.
“Redemption Price” shall mean an amount equal to one cent, $0.01.
“Redemption Time” shall mean the time at which the right to exercise the Rights shall
terminate pursuant to Section 5.1.
“Right” shall have the meaning set forth in the Recitals.
“Rights Agent” shall have the meaning set forth in the Preamble.
“Rights Certificate” shall have the meaning set forth in Section 2.3(c).
“Rights Register” shall have the meaning set forth in Section 2.7(a).
“Separation Time” shall mean the earlier of (i) the Close of Business on the tenth Business
Day (or such later date as the Board of Directors of the Company may from time to time fix by
resolution adopted prior to the Separation Time that otherwise would have occurred) after the date
on which any Person commences a tender or exchange offer that, if consummated, would result in such
Person’s becoming an Acquiring Person and (ii) the date of the first event causing a Flip-in Date
to occur; provided, that if the foregoing results in the Separation Time being prior to the
Record Time, the Separation Time shall be the Record Time and provided further,
that if any tender or exchange offer referenced in clause (i) of this paragraph is cancelled,
terminated
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or otherwise withdrawn prior to the Separation Time without the purchase of any shares of
Common Stock pursuant thereto, such offer shall be deemed, for purposes of this paragraph, never to
have been made.
“Stock Acquisition Date” shall mean the earlier of (i) the first date on which there shall be
a public announcement by the Company (by any means) that a Person has become an Acquiring Person or
(ii) the date and time on which any Acquiring Person becomes the Beneficial Owner of more than 90%
of the outstanding shares of Common Stock.
“Subsidiary” of any specified Person shall mean any corporation or other entity of which a
majority of the voting power of the equity securities or a majority of the equity or membership
interest is Beneficially Owned, directly or indirectly, by such Person.
“Trading Day,” when used with respect to any securities, shall mean a day on which the New
York Stock Exchange is open for the transaction of business or, if such securities are not listed
or admitted to trading on the New York Stock Exchange, Inc., a day on which the principal national
securities exchange on which such securities are listed or admitted to trading is open for the
transaction of business or, if such securities are not listed or admitted to trading on any
national securities exchange, a Business Day.
“Trading Regulation” shall have the meaning set forth in Section 2.3(c).
ARTICLE II
THE RIGHTS
2.1 Summary of Rights. As soon as practicable after the Record Time, the Company will
mail a letter summarizing the terms of the Rights to each holder of record of Common Stock as of
the Record Time, at such holder’s address as shown by the records of the Company.
2.2 Legend on Common Stock Certificates. Certificates for the Common Stock issued on
or after the Payment Time but prior to the Separation Time shall evidence one Right for each share
of Common Stock represented thereby and shall have impressed on, printed on, written on or
otherwise affixed to them a legend in substantially the following form:
Until the Separation Time (as defined in the Rights Agreement referred to below), this
certificate also evidences and entitles the holder hereof to certain Rights as set forth in
the Rights Agreement, dated as of October 9, 2007 (as such may be amended from time to
time, the “Rights Agreement”), between Morgans Hotel Group Co. (the “Company”) and Mellon
Investor Services LLC, as Rights Agent, the terms of which are hereby incorporated herein
by reference and a copy of
which is on file at the principal executive offices of the
Company. Under certain
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circumstances, as set forth in the Rights Agreement, such Rights may be redeemed, may
become exercisable for securities or assets of the Company or securities of another entity,
may be exchanged for shares of Common Stock or other securities or assets of the Company,
may expire, may become void (including if they are “Beneficially Owned” by an “Acquiring
Person” or an Affiliate or Associate thereof, as such terms are defined in the Rights
Agreement, or by any transferee of any of the foregoing) or may be evidenced by separate
certificates and may no longer be evidenced by this certificate. The Company will mail or
arrange for the mailing of a copy of the Rights Agreement to the holder of this certificate
without charge after the receipt of a written request therefor.
Certificates representing shares of Common Stock that are issued and outstanding at the Payment
Time shall, together with the letter mailed pursuant to Section 2.1, evidence one Right for each
share of Common Stock evidenced thereby notwithstanding the absence of the foregoing legend.
If the Common Stock issued after the Payment Time but prior to the Separation Time shall be
uncertificated, the registration of such Common Stock on the stock transfer books of the Company
shall evidence one Right for each share of Common Stock represented thereby and the Company shall
mail to every Person that holds such Common Stock a confirmation of the registration of such Common
Stock on the stock transfer books of the Company, which confirmation will have impressed, printed,
written or stamped thereon or otherwise affixed thereto the above legend. The Company shall mail
or arrange for the mailing of a copy of this Agreement to any Person that holds Common Stock, as
evidenced by the registration of the Common Stock in the name of such Person on the stock transfer
books of the Company, without charge after the receipt of a written request therefor.
2.3 Exercise of Rights; Separation of Rights. (a) Subject to Sections 3.1, 5.1 and
5.10 and subject to adjustment as herein set forth, each Right will entitle the holder thereof, at
or after the Separation Time and prior to the Expiration Time, to purchase, for the Exercise Price,
one one-hundredth of a share of Preferred Stock.
(b) Until the Separation Time, (i) no Right may be exercised and (ii) each Right will be
evidenced by the certificate for the associated share of Common Stock (or, if the Common Stock
shall be uncertificated, by the registration of the associated Common Stock on the stock transfer
books of the Company and the confirmation thereof provided for in Section 2.2), together, in the
case of certificates issued prior to the Payment Time, with the letter mailed to the record holder
thereof pursuant to Section 2.1, and will be transferable only together with, and will be
transferred by a transfer (whether with or without such letter or confirmation) of, such associated
share.
(c) Subject to the terms and conditions hereof, at or after the Separation Time and prior to
the Expiration Time, the Rights (i) may be exercised pursuant to
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Section 2.3(d) below and (ii) will be transferred independent of shares of Common Stock.
Promptly following the Separation Time, the Company will give written notice to the Rights Agent,
and the Rights Agent will mail to each holder of record of Common Stock as of the Separation Time
(other than any Person whose Rights have become void pursuant to Section 3.1(b)), at such holder’s
address as shown by the records of the Company (the Company hereby agreeing to furnish copies of
such records to the Rights Agent for this purpose), (x) a certificate (a “Rights Certificate”) in
substantially the form of Exhibit A hereto appropriately completed, representing the number of
Rights held by such holder at the Separation Time and having such marks of identification or
designation and such legends, summaries or endorsements printed thereon as the Company may deem
appropriate (but which do not affect the rights, duties, liabilities of responsibilities of the
Rights Agent) and as are not inconsistent with the provisions of this Agreement, or as may be
required to comply with any law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any national securities exchange or quotation system on which the Rights may
from time to time be listed or traded (“Trading Regulation”), or to conform to usage, and (y) a
disclosure statement describing the Rights. Receipt of a Rights Certificate by any Person shall
not preclude a later determination that such Rights are void pursuant to Section 3.1(b).
(d) Subject to the terms and conditions hereof, Rights may be exercised on any Business Day at
or after the Separation Time and prior to the Expiration Time by submitting to the Rights Agent the
Rights Certificate evidencing such Rights with an Election to Exercise (an “Election to Exercise”)
substantially in the form attached to the Rights Certificate duly completed, accompanied by payment
in cash, or by certified or official bank check or money order payable to the order of the Company,
of a sum equal to the Exercise Price multiplied by the number of Rights being exercised and a sum
sufficient to cover any transfer tax or charge that may be payable in respect of any transfer
involved in the transfer or delivery of Rights Certificates or the issuance or delivery of
certificates (or, if uncertificated, the registration on the stock transfer books of the Company)
for shares or depositary receipts (or both) in a name other than that of the holder of the Rights
being exercised.
(e) Upon receipt of a Rights Certificate, with an Election to Exercise properly completed and
duly executed, accompanied by payment as set forth in Section 2.3(d), and subject to the terms and
conditions hereof, the Rights Agent will thereupon promptly (i) (A) requisition from a transfer
agent stock certificates evidencing such number of shares or other securities to be purchased or,
in the case of uncertificated shares or other securities, requisition from a transfer agent a
notice setting forth such number of shares or other securities to be purchased for which
registration will be made on the stock transfer books of the Company (the Company hereby
irrevocably authorizing its transfer agents to comply with all such requisitions), and (B) if the
Company elects pursuant to Section 5.5 not to issue certificates (or effect registrations on the
stock transfer books of the Company) representing fractional shares, requisition from the
depositary selected by the Company depositary receipts representing the fractional shares to be
purchased or requisition from the Company the amount of cash to be paid in lieu of
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fractional shares in accordance with Section 5.5 and (ii) after receipt of such certificates,
depositary receipts, notices and/or cash, deliver the same to or upon the order of the registered
holder of such Rights Certificate, registered (in the case of certificates, depositary receipts or
notices) in such name or names as may be designated by such holder.
(f) In case the holder of any Rights shall exercise less than all of the Rights evidenced by
such holder’s Rights Certificate, a new Rights Certificate evidencing the Rights remaining
unexercised will be issued by the Rights Agent to such holder or to such holder’s duly authorized
assigns.
(g) The Company covenants and agrees that it will (i) take all such action as may be necessary
to ensure that all shares delivered (or evidenced by registration on the stock transfer books of
the Company) upon exercise of Rights shall, at the time of delivery of the certificates (or
registration) for such shares (subject to payment of the Exercise Price), be duly and validly
authorized, executed, issued and delivered (or registered) and fully paid and nonassessable;
(ii) take all such action as may be necessary to comply with any applicable requirements of the
Securities Act of 1933, as amended or the Exchange Act, and the rules and regulations thereunder,
and any other applicable law, rule or regulation, in connection with the issuance of any shares
upon exercise of Rights; and (iii) pay when due and payable any and all taxes and charges that may
be payable in respect of the original issuance or delivery of the Rights Certificates or of any
shares issued upon the exercise of Rights, provided, that the Company shall not be required
to pay any tax or charge that may be payable in respect of any transfer involved in the transfer or
delivery of Rights Certificates or the issuance or delivery of certificates (or the registration)
for shares in a name other than that of the holder of the Rights being transferred or exercised.
(h) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to any purported transfer,
split up, combination or exchange of any Rights Certificate or exercise or assignment of a Rights
Certificate unless the registered holder of such Rights Certificate shall have (i) properly
completed and duly signed the certificate following the form of assignment or the form of election
to purchase, as applicable, set forth on the reverse side of the Rights Certificate surrendered for
such transfer, split up, combination, exchange, exercise or assignment and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) thereof
and of the Rights evidenced thereby and Affiliates and Associates thereof as the Company or the
Rights Agent may reasonably request.
2.4 Adjustments to Exercise Price; Number of Rights. (a) In the event the Company
shall at any time after the Record Time and prior to the Separation Time (i) declare or pay a
dividend on Common Stock payable in Common Stock, (ii) subdivide the outstanding Common Stock or
(iii) combine the outstanding Common Stock into a smaller number of shares of Common Stock, (x) the
Exercise Price in effect after such
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adjustment will be equal to the Exercise Price in effect immediately prior to such adjustment
divided by the number of shares of Common Stock including any fractional shares in lieu of which
such holder received cash (the “Expansion Factor”) that a holder of one share of Common Stock
immediately prior to such dividend, subdivision or combination would hold thereafter as a result
thereof and (y) each Right held prior to such adjustment will become that number of Rights equal to
the Expansion Factor, and the adjusted number of Rights will be deemed to be distributed among the
shares of Common Stock with respect to which the original Rights were associated (if they remain
outstanding) and the shares issued in respect of such dividend, subdivision or combination, so that
each such share of Common Stock will have exactly one Right associated with it. Each adjustment
made pursuant to this paragraph shall be made as of the payment or effective date for the
applicable dividend, subdivision or combination.
In the event that the Company shall at any time after the Record Time and prior to the
Separation Time issue any shares of Common Stock otherwise than in a transaction referenced in the
preceding paragraph, each such share of Common Stock so issued shall automatically have one new
Right associated with it, which Right shall be evidenced by the certificate representing such share
(or, if the Common Stock shall be uncertificated, such Right shall be evidenced by the registration
of such Common Stock on the stock transfer books of the Company and the confirmation thereof
provided for in Section 2.2). Rights shall be issued by the Company in respect of shares of Common
Stock that are issued or sold by the Company after the Separation Time only to the extent provided
in Section 5.3.
(b) In the event that the Company shall at any time after the Record Time and prior to the
Separation Time issue or distribute any securities or assets in respect of, in lieu of or in
exchange for Common Stock (other than pursuant to any non-extraordinary periodic cash dividend or a
dividend paid solely in Common Stock) whether by dividend, in a reclassification or
recapitalization (including any such transaction involving a merger, consolidation or statutory
share exchange), or otherwise, the Company shall make such adjustments, if any, in the Exercise
Price, number of Rights and/or securities or other property purchasable upon exercise of Rights as
the Board of Directors of the Company, in its sole discretion, may deem to be appropriate under the
circumstances in order to adequately protect the interests of the holders of Rights generally, and
the Company and the Rights Agent shall amend this Agreement as necessary to provide for such
adjustments.
(c) Each adjustment to the Exercise Price made pursuant to this Section 2.4 shall be
calculated to the nearest cent. Whenever an adjustment to the Exercise Price is made pursuant to
this Section 2.4, the Company shall (i) promptly prepare a certificate setting forth the facts and
calculations accounting for such adjustment and a brief statement of the facts accounting for such
adjustment and (ii) promptly file with the Rights Agent and with each transfer agent for the Common
Stock a copy of such certificate. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment or statement contained therein and shall have
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no duty or liability with respect to and shall not be deemed to have knowledge of such
adjustment or event unless and until it shall have received such certificate.
(d) Rights Certificates shall represent the right to purchase the securities purchasable under
the terms of this Agreement, including any adjustment or change in the securities purchasable upon
exercise of the Rights, even though such certificates may continue to express the securities
purchasable at the time of issuance of the initial Rights Certificates.
2.5 Date on Which Exercise is Effective. Each Person in whose name any certificate
for shares is issued (or registration on the stock transfer books is effected) upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of the shares
represented thereby on the date upon which the Rights Certificate evidencing such Rights was duly
surrendered and payment of the Exercise Price for such Rights (and any applicable taxes and other
charges payable by the exercising holder hereunder) was made; provided, however,
that if the date of such surrender and payment is a date upon which the stock transfer books of the
Company are closed, such Person shall be deemed to have become the record holder of such shares on,
and such certificate (or registration) shall be dated, the next succeeding Business Day on which
the stock transfer books of the Company are open.
2.6 Execution, Authentication, Delivery and Dating of Rights Certificates. (a) The
Rights Certificates shall be executed on behalf of the Company by its Chief Executive Officer,
Chief Investment Officer, Chief Financial Officer or General Counsel and by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the Rights Certificates may
be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures of individuals who were at any
time the proper officers of the Company shall bind the Company, notwithstanding that such
individuals or any of them have ceased to hold such offices prior to the countersignature and
delivery of such Rights Certificates.
Promptly after the Separation Time, the Company will provide written notification to the
Rights Agent of such Separation Time and will deliver Rights Certificates duly executed by the
Company to the Rights Agent for countersignature, and, subject to Section 3.1(b), the Rights Agent
shall manually or by facsimile countersign and deliver such Rights Certificates to the holders of
the Rights pursuant to Section 2.3(c). No Rights Certificate shall be valid for any purpose unless
manually countersigned by the Rights Agent.
(b) Each Rights Certificate shall be dated the date of countersignature thereof.
2.7 Registration, Registration of Transfer and Exchange. (a) After the Separation
Time, the Company will cause to be kept a register (the “Rights Register”) in which, subject to
such reasonable regulations as it may prescribe, the Company will
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provide for the registration and transfer of Rights. The Rights Agent is hereby appointed
“Rights Registrar” for the purpose of maintaining the Rights Register for the Company and
registering Rights and transfers of Rights after the Separation Time as herein provided. In the
event that the Rights Agent shall cease to be the Rights Registrar, the Rights Agent will have the
right to examine the Rights Register at all reasonable times after the Separation Time.
After the Separation Time and prior to the Expiration Time, upon surrender for registration of
transfer or exchange of any Rights Certificate, and subject to the provisions of Sections 2.7(c)
and (d), the Company will execute, and the Rights Agent will countersign and deliver, in the name
of the holder or the designated transferee or transferees, as required pursuant to the holder’s
instructions, one or more new Rights Certificates evidencing the same aggregate number of Rights as
did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b), all Rights issued upon any registration of
transfer or exchange of Rights Certificates shall be the valid obligations of the Company, and such
Rights shall be entitled to the same benefits under this Agreement as the Rights surrendered upon
such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of transfer or exchange shall be
duly endorsed, or be accompanied by a written instrument of transfer in form satisfactory to the
Company or the Rights Agent, as the case may be, duly executed by the holder thereof or such
holder’s attorney duly authorized in writing. As a condition to the issuance of any new Rights
Certificate under this Section 2.7, the Company may require the payment of a sum sufficient to
cover any tax or other charge that may be imposed in relation thereto.
(d) The Company shall not register the transfer or exchange of any Rights that have become
void under Section 3.1(b), been exchanged under Section 3.1(c) or been redeemed under Section 5.1.
2.8 Mutilated, Destroyed, Lost and Stolen Rights Certificates. (a) If any mutilated
Rights Certificate is surrendered to the Rights Agent prior to the Expiration Time, then, subject
to Sections 3.1(b), 3.1(c) and 5.1, the Company shall execute and the Rights Agent shall
countersign and deliver in exchange therefor a new Rights Certificate evidencing the same number of
Rights as did the Rights Certificate so surrendered.
(b) If there shall be delivered to the Company and the Rights Agent prior to the Expiration
Time (i) evidence to their satisfaction of the destruction, loss or theft of any Rights Certificate
and (ii) such security or indemnity as may be required by them to save each of them and any of
their agents harmless, then, subject to Sections 3.1(b), 3.1(c) and 5.1 and in the absence of
notice to the Company or the Rights Agent that such Rights Certificate has been acquired by a
bona fide purchaser, the Company shall execute and upon its request the Rights
Agent shall countersign and deliver, in lieu of any such
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destroyed, lost or stolen Rights Certificate, a new Rights Certificate evidencing the same
number of Rights as did the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights Certificate under this Section 2.8, the
Company and the Rights Agent may require the payment of a sum sufficient to cover any tax or other
charge that may be imposed in relation thereto and any other expenses (including the fees and
expenses of the Rights Agent) connected therewith.
(d) Every new Rights Certificate issued pursuant to this Section 2.8 in lieu of any destroyed,
lost or stolen Rights Certificate shall evidence an original additional contractual obligation of
the Company, whether or not the destroyed, lost or stolen Rights Certificate shall be at any time
enforceable by anyone, and, subject to Section 3.1(b) shall be entitled to all the benefits of this
Agreement equally and proportionately with any and all other Rights duly issued hereunder.
2.9 Persons Deemed Owners. Prior to due presentment of a Rights Certificate (or,
prior to the Separation Time, the associated Common Stock certificate or notice of transfer, if
uncertificated) for registration of transfer, the Company, the Rights Agent and any agent of the
Company or the Rights Agent may deem and treat the Person in whose name such Rights Certificate
(or, prior to the Separation Time, such Common Stock certificate or Common Stock registration, if
uncertificated) is registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever, including the payment of the Redemption Price and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary. As used in this Agreement,
unless the context otherwise requires, the term “holder” of any Rights shall mean the registered
holder of such Rights (or, prior to the Separation Time, the associated shares of Common Stock).
2.10 Delivery and Cancellation of Certificates. All Rights Certificates surrendered
upon exercise or for registration of transfer or exchange shall, if surrendered to any Person other
than the Rights Agent, be delivered to the Rights Agent and, in any case, shall be promptly
cancelled by the Rights Agent. The Company may at any time deliver to the Rights Agent for
cancellation any Rights Certificates previously countersigned and delivered hereunder that the
Company may have acquired in any manner whatsoever, and all Rights Certificates so delivered shall
be promptly cancelled by the Rights Agent. No Rights Certificates shall be countersigned in lieu
of or in exchange for any Rights Certificates cancelled as provided in this Section 2.10, except as
expressly permitted by this Agreement. The Rights Agent shall destroy all cancelled Rights
Certificates and deliver a certificate of destruction to the Company.
2.11 Agreement of Rights Holders. Every holder of Rights by accepting the same
consents and agrees with the Company and the Rights Agent and with every other holder of Rights
that:
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(a) prior to the Separation Time, each Right will be transferable only together with, and will
be transferred by a transfer of, the associated share of Common Stock;
(b) after the Separation Time, the Rights Certificates will be transferable only on the Rights
Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or, prior to the Separation Time, the
associated Common Stock certificate or Common Stock registration, if uncertificated) for
registration of transfer, the Company, the Rights Agent and any agent of the Company or the Rights
Agent may deem and treat the Person in whose name the Rights Certificate (or, prior to the
Separation Time, the associated Common Stock certificate or Common Stock registration, if
uncertificated) is registered as the absolute owner thereof and of the Rights evidenced thereby for
all purposes whatsoever, and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary;
(d) Rights Beneficially Owned by certain Persons will, under the circumstances set forth in
Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from time to time pursuant to Section 2.4(b)
or 5.4.
ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
THE EVENT OF CERTAIN TRANSACTIONS
3.1 Flip-in. (a) In the event that prior to the Expiration Time a Flip-in Date shall
occur, except as otherwise provided in this Section 3.1, each Right shall constitute the right to
purchase from the Company, upon exercise thereof in accordance with the terms hereof (but subject
to Section 5.10), that number of shares of Common Stock having an aggregate Market Price on the
Stock Acquisition Date that gave rise to the Flip-in Date equal to twice the Exercise Price for an
amount in cash equal to the Exercise Price (such right to be appropriately adjusted in order to
protect the interests of the holders of Rights generally in the event that on or after such Stock
Acquisition Date any of the events described in Section 2.4(a) or (b), or any analogous event,
shall have occurred with respect to the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are Beneficially Owned on the Stock
Acquisition Date by an Acquiring Person or an Affiliate or Associate thereof shall become void and
any holder of such Rights (including transferees, whether direct or indirect, of any such Persons)
shall thereafter have no right to exercise or transfer such Rights under any provision of this
Agreement. If any Rights Certificate is presented for assignment or exercise and the Person
presenting the same will not complete the certification set forth at the end of the form of
assignment or notice of
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election to exercise or, if requested, provide such additional evidence, including, without
limitation, of the identity of the Beneficial Owners and their Affiliates and Associates (or former
Beneficial Owners and their Affiliates and Associates) as the Company or the Rights Agent shall
reasonably request in order to determine if such Rights are void, then the Company shall be
entitled conclusively to deem the Rights to be Beneficially Owned by an Acquiring Person or an
Affiliate or Associate thereof or a transferee of any of the foregoing and accordingly deem the
Rights evidenced thereby to be void and not transferable, exercisable or exchangeable.
(c) The Board of Directors of the Company may, at its option, at any time after a Flip-in Date
and prior to the time that an Acquiring Person becomes the Beneficial Owner of more than 50% of the
outstanding shares of Common Stock elect to exchange all (but not less than all) of the then
outstanding Rights (which shall not include Rights that have become void pursuant to the provisions
of Section 3.1(b)) for shares of Common Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted in order to protect the interests of holders of Rights generally in
the event that after the Separation Time any of the events described in Section 2.4(a) or (b), or
any analogous event, shall have occurred with respect to the Common Stock (such exchange ratio, as
adjusted from time to time, being hereinafter referred to as the “Exchange Ratio”).
Immediately upon the action of the Board of Directors of the Company electing to exchange the
Rights, without any further action and without any notice, the right to exercise the Rights will
terminate and each Right (other than Rights that have become void pursuant to Section 3.1(b)),
whether or not previously exercised, will thereafter represent only the right to receive a number
of shares of Common Stock equal to the Exchange Ratio. The exchange of the Rights by the Board of
Directors 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. Promptly after the action of the Board of
Directors electing to exchange the Rights, the Company shall give written notice thereof
(specifying the steps to be taken to receive shares of Common Stock in exchange for Rights) to the
Rights Agent and the holders of the Rights (other than Rights that have become void pursuant to
Section 3.1(b)) outstanding immediately prior thereto by mailing such notice in accordance with
Section 5.9. Before effecting an exchange pursuant to this Section 3.1(c), the Board of Directors
may direct the Company to enter into a Trust Agreement in such form and with such terms as the
Board of Directors shall then approve (the “Trust Agreement”). If the Board of Directors so
directs, the Company shall enter into the Trust Agreement and shall issue to the trust created by
such agreement (the “Trust”) all or some (as determined by the Board of Directors) of the shares of
Common Stock (or other securities) issuable pursuant to the exchange, and all or some (as
determined by the Board of Directors) of holders of Rights entitled to receive shares pursuant to
the exchange shall be entitled to receive such shares (and any dividends or distributions made
thereon after the date on which such shares are deposited in the Trust) only from the trust and
solely upon compliance with the relevant terms and provisions of the Trust Agreement. Prior to
effecting an exchange and registering shares of Common
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Stock (or other such securities) in any Person’s name, including any nominee or transferee of
a Person, the Company may require (or cause the trustee of the Trust to require), as a condition
thereof, that any holder of Rights provide evidence, including, without limitation, the identity of
the Beneficial Owners and their Affiliates and Associates (or former Beneficial Owners and their
Affiliates and Associates) as the Company or the Rights Agent shall reasonably request in order to
determine if such Rights are void. If any Person shall fail to comply with such request, the
Company shall be entitled conclusively to deem the Rights formerly held by such Person to be void
pursuant to Section 3.1(b) and not transferable or exerciseable or exchangeable in connection
herewith. Any shares of Common Stock or other securities issued at the direction of the Board in
connection herewith shall be validly issued, fully paid and nonassessable shares of Common Stock or
other securities (as the case may be), and the Company shall be deemed to have received as
consideration for such issuance a benefit having a value that is at least equal to the aggregate
par value of the shares so issued.
Each Person in whose name any certificate for shares is issued (or for whom any registration
on the stock transfer books of the Company is made) upon the exchange of Rights pursuant to this
Section 3.1(c) or Section 3.1(d) shall for all purposes be deemed to have become the holder of
record of the shares represented thereby on, and such certificate (or registration on the stock
transfer books of the Company) shall be dated (or registered as of), the date upon which the Rights
Certificate evidencing such Rights was duly exchanged or deemed exchanged by the Company and
payment of any applicable taxes and other charges payable by the holder was made; provided,
however, that if the date of such exchange and payment is a date upon which the stock
transfer books of the Company are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate (or registration on the stock transfer books of the
Company) shall be dated (or registered as of), the next succeeding Business Day on which the stock
transfer books of the Company are open.
(d) Whenever the Company shall become obligated under Section 3.1(a) or (c) to issue shares of
Common Stock upon exercise of or in exchange for Rights, the Company, at its option, may substitute
therefor shares of Preferred Stock, at a ratio of one one-hundredth of a share of Preferred Stock
for each share of Common Stock so issuable.
(e) In the event that there shall not be sufficient treasury shares or authorized but unissued
shares of Common Stock or Preferred Stock of the Company to permit the exercise or exchange in full
of the Rights in accordance with Section 3.1(a) or if the Company so elects to make the exchange
referenced in Section 3.1(c), to permit the issuance of all shares pursuant to the exchange, the
Company shall take such action as shall be necessary to ensure and provide, as and when and to the
maximum extent permitted by applicable law and any agreements or instruments in effect on the Stock
Acquisition Date (and remaining in effect) to which it is a party and without exposing directors to
personal liability in connection therewith (as determined by the
Board of Directors) , that each
Right shall thereafter constitute the right to receive, (x) in the case
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of any exercise in accordance with Section 3.1(a), at the Company’s option, either (A) in
return for the Exercise Price, debt or equity securities or other assets (or a combination thereof)
having a fair value equal to twice the Exercise Price, or (B) without payment of consideration
(except as may be required for the valid issuance of securities or as otherwise required by
applicable law), debt or equity securities or other assets (or a combination thereof) having a fair
value equal to the Exercise Price, or (y) in the case of an exchange of Rights in accordance with
Section 3.1(c), debt or equity securities or other assets (or a combination thereof) having a fair
value equal to the product of the Market Price of a share of Common Stock on the Flip-in Date times
the Exchange Ratio in effect on the Flip-in Date, where in any case set forth in (x) or (y) above
the fair value of such debt or equity securities or other assets shall be as determined in good
faith by the Board of Directors of the Company, after consultation with a nationally recognized
investment banking firm.
3.2 Flip-over. (a) Prior to the Expiration Time, the Company shall not enter into
any agreement with respect to, consummate or permit to occur any Flip-over Transaction or Event
unless and until it shall have entered into a supplemental agreement with the Flip-over Entity, for
the benefit of the holders of the Rights (the terms of which shall be reflected in an amendment to
this Agreement entered into with the Rights Agent), providing that, upon consummation or occurrence
of the Flip-over Transaction or Event (i) each Right shall thereafter constitute the right to
purchase from the Flip-over Entity, upon exercise thereof in accordance with the terms hereof, that
number of shares of Flip-over Stock of the Flip-over Entity having an aggregate Market Price on the
date of consummation or occurrence of such Flip-over Transaction or Event equal to twice the
Exercise Price for an amount in cash equal to the Exercise Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights generally in the event that
after such date of consummation or occurrence any of the events described in Section 2.4(a) or (b),
or any analogous event, shall have occurred with respect to the Flip-over Stock) and (ii) the
Flip-over Entity shall thereafter be liable for, and shall assume, by virtue of such Flip-over
Transaction or Event and such supplemental agreement, all the obligations and duties of the Company
pursuant to this Agreement.
(b) Prior to the Expiration Time, unless the Rights will be redeemed pursuant to Section 5.1
pursuant to an agreement entered into by the Company prior to a Flip-in Date, the Company shall not
enter into any agreement with respect to, consummate or permit to occur any Flip-over Transaction
or Event if (i) at the time thereof there are any rights, warrants or securities outstanding or any
other arrangements, agreements or instruments that would eliminate or otherwise diminish in any
material respect the benefits intended to be afforded by this Rights Agreement to the holders of
Rights upon consummation of such transaction, (ii) prior to, simultaneously with or immediately
after such Flip-over Transaction or Event, the stockholders of the Person who constitutes, or would
constitute, the Flip-over Entity shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates, or (iii) the form or nature of organization of
the Flip-over Entity would preclude or limit the exercisability of the Rights.
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(c) The provisions of this Section 3.2 shall apply to successive Flip-over Transactions or
Events.
ARTICLE IV
THE RIGHTS AGENT
4.1 General. (a) The Company hereby appoints the Rights Agent to act as agent for
the Company in accordance with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company agrees to pay to the Rights Agent reasonable compensation for all
services rendered by it hereunder and, from time to time, on demand of the Rights Agent,
reimbursement for its reasonable expenses and counsel fees and other disbursements incurred in the
preparation, negotiation, delivery, amendment, administration and execution of this Agreement and
the exercise and performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, damage, judgment, fine,
penalty, claim, demand, settlement, cost or expense (including, without limitation, the reasonable
fees and expenses of legal counsel), incurred without gross negligence, bad faith or willful
misconduct on the part of the Rights Agent (which gross negligence, bad faith or willful misconduct
must be determined by a final, non-appealable order, judgment, decree or ruling of a court of
competent jurisdiction), for any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance, administration, exercise and performance of its duties under this
Agreement, including the costs and expenses of defending against any claim of liability. The costs
and expenses incurred in enforcing this right of indemnification shall be paid by the Company. The
provision of this Section 4.1 and Section 4.3 below shall survive the termination of this
Agreement, the exercise of or expiration of the Rights and the resignation, replacement, removal of
the Rights Agent.
(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 its acceptance or
administration of this Agreement and the exercise and performance of its duties hereunder, in
reliance upon any certificate for securities (or registration on the stock transfer books of the
Company) purchasable upon exercise of Rights, Rights Certificate, certificate for other securities
of the Company, instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement, or other paper or document believed by
it to be genuine and to be signed, executed and, where necessary, verified or acknowledged, by the
proper Person or Persons or otherwise upon the advice of counsel as set forth in Section 4.3. The
Rights Agent shall not be deemed to have knowledge of any event of which it was supposed to have
received notice thereof hereunder, and the Rights Agent shall be fully protected and shall incur no
liability for failing to take any action in connection therewith unless and until it has received
such notice.
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4.2 Merger or Consolidation or Change of Name of Rights Agent. (a) Any Person into
which the Rights Agent or any successor Rights Agent may be merged or with which it may be
consolidated, or any Person resulting from any merger or consolidation to which the Rights Agent or
any successor Rights Agent shall be a party, or any Person succeeding to the shareholder services
business of the Rights Agent or any successor Rights Agent, will be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any further act on the
part of any of the parties hereto, provided that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 4.4. In case at the time
such successor Rights Agent succeeds to the agency created by this Agreement any of the Rights
Certificates have been countersigned but not delivered, any such successor Rights Agent may adopt
the countersignature of the predecessor Rights Agent and deliver such Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates have not been countersigned,
any successor Rights Agent may countersign such Rights Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in all such cases such
Rights Certificates will have the full force provided in the Rights Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent is changed and at such time any of the
Rights Certificates shall have been countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so countersigned; and in case
at that time any of the Rights Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in its changed name; and in all
such cases such Rights Certificates shall have the full force provided in the Rights Certificates
and in this Agreement.
4.3 Duties of Rights Agent. The Rights Agent undertakes the duties and obligations
expressly imposed by this Agreement (and no implied duties) upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates, by their acceptance
thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal counsel for the
Company), and the advice or opinion of such counsel will be full and complete authorization and
protection to the Rights Agent and the Rights Agent shall incur no liability for or in respect of
as to any action taken, suffered or omitted by it and in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement the Rights Agent deems it
necessary or desirable that any fact or matter (including, without limitation, the identity of any
Acquiring Person) be proved or established by the Company prior to taking, suffering or omitting to
take 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 a person believed by the Rights Agent to be the Chief Executive Officer, Chief Investment
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Officer, Chief Financial Officer or General Counsel of the Company and delivered to the Rights
Agent; and such certificate will be full and complete authorization and protection to the Rights
Agent and the Rights Agent shall incur no liability for or in respect of any action taken or
suffered by it under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent will be liable hereunder only for its own gross negligence, bad faith or
willful misconduct (which gross negligence, bad faith or willful misconduct must be determined by a
final, non-appealable order, judgment, decree or ruling of a court of competent jurisdiction).
Anything to the contrary notwithstanding, in no event shall the Rights Agent be liable for special,
punitive, indirect, consequential or incidental loss or damage of any kind whatsoever (including
but not limited to loss profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage. Any liability of the Rights Agent under this Agreement will be limited to the
amount of the annual fees paid by the Company to the Rights Agent.
(d) The Rights Agent will not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the certificates, if any, for securities purchasable
upon exercise of Rights or the Rights Certificates (except its countersignature thereof) nor shall
it be required to verify the same, but all such statements and recitals are and will be deemed to
have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in respect of the validity of this
Agreement or the execution and delivery hereof (except the due authorization, execution and
delivery hereof by the Rights Agent) or in respect of the validity or execution of any certificate,
if any, for securities purchasable upon exercise of Rights or Rights Certificate (except its
countersignature thereof); nor will it be responsible for any breach by the Company of any covenant
or condition contained in this Agreement or in any Rights Certificate; nor will it be responsible
for any change in the exercisability of the Rights (including the Rights becoming void pursuant to
Section 3.1(b)) or any adjustment required under the provisions of Section 2.4, 3.1 or 3.2 or
responsible for the manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect to the exercise of
Rights after receipt of the certificate contemplated by Section 2.4 describing any such
adjustment); nor will it by any act hereunder be deemed to make any representation or warranty as
to the authorization or reservation of any securities purchasable upon exercise of Rights or any
Rights or as to whether any securities purchasable upon exercise of Rights will, when issued, be
duly and validly authorized, executed, issued and delivered and fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and deliver or cause to be
performed, executed, acknowledged and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
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(g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from any person believed by the Rights Agent to be the
Chief Executive Officer, Chief Investment Officer, Chief Financial Officer or General Counsel of
the Company, and to apply to such persons for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered by it in good faith in accordance with
instructions of any such person. The Rights Agent shall be fully authorized and protected in
relying upon the most recent instructions received by such person.
(h) The Rights Agent and any stockholder, director, officer or employee of the Rights Agent
may buy, sell or deal in Common Stock, Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company may be interested, or contract with
or lend money to the Company or otherwise act as fully and freely as though it were not Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other 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 (through its directors, officers or employees) or by or
through its attorneys or agents, and the Rights Agent will not be answerable or accountable for any
act, omission, default, neglect or misconduct of any such attorneys or agents or for any loss to
the Company or any other Person resulting from any such act, default, neglect or misconduct, absent
gross negligence, bad faith or willful misconduct in the selection and continued employment thereof
(which gross negligence, bad faith or willful misconduct must be determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent jurisdiction).
(j) No provision of this Agreement shall require the Rights Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise,
transfer, split up, combination or exchange, either (i) the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 and/or 2 thereof, or (ii) the Rights Agent has
received notice of a suspension, the Rights Agent shall not take any further action with respect to
such requested exercise, transfer, split up, combination or exchange, without first consulting with
the Company, and shall thereafter take further action with respect thereto only in accordance with
the Company’s written instructions.
-22-
4.4 Change of Rights Agent. The Rights Agent may resign and be discharged from its
duties under this Agreement upon 90 days’ notice (or such lesser notice as is acceptable to the
Company) in writing mailed to the Company and to each transfer agent of Common Stock known to the
Rights Agent by registered or certified mail, and to the holders of the Rights in accordance with
Section 5.9. The Company may remove the Rights Agent upon 30 days’ notice in writing, mailed to
the Rights Agent and to each transfer agent of the Common Stock by registered or certified mail,
and to the holders of the Rights in accordance with Section 5.9. If the Rights Agent should resign
or be removed or otherwise become incapable of acting, the Company will appoint a successor to the
Rights Agent. If the Company fails to make such appointment within a period of 30 days after such
removal or after it has been notified in writing of such resignation or incapacity by the resigning
or incapacitated Rights Agent or by the holder of any Rights (which holder shall, with such notice,
submit such holder’s Rights Certificate for inspection by the Company), then the holder of any
Rights may apply to any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court, shall be a Person
organized and doing business under the laws of the United States or any state of the United States,
in good standing, which is authorized under such laws to exercise the powers of the Rights Agent
contemplated by this Agreement and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000. After appointment, the successor Rights Agent will be vested with
the same powers, rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall deliver and transfer to
the successor Rights Agent any property at the time held by it hereunder, and execute and deliver
any further assurance, conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company will file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock, and mail a notice thereof in
writing to the holders of the Rights. Failure to give any notice provided for in this Section 4.4,
however, or any defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as the case may be.
ARTICLE V
MISCELLANEOUS
5.1 Redemption. (a) The Board of Directors of the Company may, at its option, at any
time prior to the close of business on the Flip-in Date, elect to redeem all (but not less than
all) the then outstanding Rights at the Redemption Price and the Company, at its option, may pay
the Redemption Price either in cash or shares of Common Stock or other securities of the Company
deemed by the Board of Directors, in the exercise of its sole discretion, to be at least equivalent
in value to the Redemption Price.
-23-
(b) Immediately upon the action of the Board of Directors of the Company electing to redeem
the Rights (or, if the resolution of the Board of Directors electing to redeem the Rights states
that the redemption will not be effective until the occurrence of a specified future time or event,
upon the occurrence of such future time or event), without any further action and without any
notice, the right to exercise the Rights will terminate and each Right, whether or not previously
exercised, will thereafter represent only the right to receive the Redemption Price in cash or
securities, as determined by the Board of Directors. Promptly after the Rights are redeemed, the
Company shall give written notice of such redemption to the Rights Agent and the holders of the
then outstanding Rights by mailing such notice in accordance with Section 5.9.
5.2 Expiration. The Rights and this Agreement shall expire at the Expiration Time and
no Person shall have any rights pursuant to this Agreement or any Right after the Expiration Time,
except, if the Rights have been exchanged or redeemed, as provided in Section 3.1 or 5.1,
respectively.
5.3 Issuance of New Rights Certificates. Notwithstanding any of the provisions of
this Agreement or of the Rights to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by its Board of Directors to reflect
any adjustment or change in the number or kind or class of shares of stock purchasable upon
exercise of Rights made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock by the Company following the
Separation Time and prior to the Expiration Time pursuant to the terms of securities convertible or
redeemable into shares of Common Stock (other than any securities issued or issuable in connection
with the exercise or exchange of Rights) or to options, in each case issued or granted prior to,
and outstanding at, the Separation Time, the Company shall issue to the holders of such shares of
Common Stock, Rights Certificates representing the appropriate number of Rights in connection with
the issuance or sale of such shares of Common Stock; provided, however, in each
case, (i) no such Rights Certificate shall be issued, if, and to the extent that, the Company shall
be advised by counsel that such issuance would create a significant risk of material adverse tax
consequences to the Company or to the Person to whom such Rights Certificates would be issued, (ii)
no such Rights Certificates shall be issued if, and to the extent that, appropriate adjustment
shall have otherwise been made in lieu of the issuance thereof, and (iii) the Company shall have no
obligation to distribute Rights Certificates to any Acquiring Person or Affiliate or Associate of
an Acquiring Person or any transferee of any of the foregoing.
5.4 Supplements and Amendments. The Company and the Rights Agent, if so directed by
the Company, may from time to time supplement or amend this Agreement without the approval of any
holders of Rights (i) prior to the Close of Business on the Flip-in Date, in any respect and (ii)
after the Close of Business on the Flip-in Date, to make any changes that the Company may deem
necessary or desirable (x) that shall not materially adversely affect the interests of the holders
of Rights generally (other than the Acquiring Person or any Affiliate or Associate thereof) or
(y) in
-24-
order to cure any ambiguity or to correct or supplement any provision contained herein which
may be inconsistent with any other provisions herein or otherwise defective, including, without
limitation, any change in order to satisfy any applicable law, rule or regulation, including any
Trading Regulation on any applicable exchange so as to allow trading of the Company’s securities
thereon. The Rights Agent will duly execute and deliver any supplement or amendment hereto
requested by the Company which satisfies the terms of the preceding sentence or Section 2.4(b) or
Section 3.2(a), provided that any supplement or amendment (other than to Article IV) shall
become effective immediately upon execution by the Company, whether or not also executed by the
Rights Agent. Notwithstanding anything herein to the contrary, the Rights Agent shall not be
obligated to enter into any supplement or amendment that adversely affects the Rights Agent’s own
right, duties, obligations or immunities under this Agreement, and the Rights Agent shall not be
bound by supplements or amendments not executed by it.
5.5 Fractional Shares. If the Company elects not to issue certificates representing
(or register on the stock transfer books of the Company) fractional shares upon exercise,
redemption or exchange of Rights, the Company shall, in lieu thereof, in the sole discretion of the
Board of Directors, either (a) evidence such fractional shares by depositary receipts issued
pursuant to an appropriate agreement between the Company and a depositary selected by it, providing
that each holder of a depositary receipt shall have all of the rights, privileges and preferences
to which such holder would be entitled as a beneficial owner of such fractional share, or (b) pay
to the registered holder of such Rights the appropriate fraction of the Market Price per share in
cash. If the Company elects to issue fractional shares, whenever a payment for fractional Rights
or fractional shares is to be made by the Rights Agent upon exercise of a Right, the Company shall
(i) as promptly as practicable prepare and deliver to the Rights Agent a certificate setting forth
in reasonable detail the facts related to such payments and the prices and/or formulas utilized in
calculating such payments, and (ii) provide immediately available funds to the Rights Agent
sufficient 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 Agreement relating
to the payment of fractional Rights or fractional shares unless and until the Rights Agent shall
have received such a certificate and funds.
5.6 Rights of Action. Subject to the terms of this Agreement (including
Sections 3.1(b), 5.10 and 5.14), rights of action in respect of this Agreement, other than rights
of action vested solely in the Rights Agent, are vested in the respective holders of the Rights;
and any holder of any Rights, without the consent of the Rights Agent or of the holder of any other
Rights, may, on such holder’s own behalf and for such holder’s own benefit and the benefit of other
holders of Rights, enforce, and may institute and maintain any suit, action or proceeding against
the Company to enforce, or otherwise act in respect of, such holder’s right to exercise such
holder’s Rights in the manner provided in such holder’s Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the holders of Rights, it is
specifically
-25-
acknowledged that the holders of Rights would not have an adequate remedy at law for any
breach by the Company of this Agreement and will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations by the Company of,
the obligations of any Person subject to this Agreement.
Notwithstanding anything in this Agreement to the contrary, neither the Company nor the Rights
Agent shall have any liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, judgment, decree or ruling (whether interlocutory or final)
issued by a court of competent jurisdiction or by a governmental regulatory, self-regulatory or
administrative agency or commission, or any statute, rule, regulation, or executive order
promulgated or enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided, however that the Company shall use
commercially reasonable efforts to have any such injunction, order, judgment, decree or ruling
lifted or otherwise overturned as soon as possible.
5.7 Holder of Rights Not Deemed a Stockholder. No holder, as such, of any Rights
shall be entitled to vote, receive dividends or be deemed for any purpose the holder of shares or
any other securities that may at any time be issuable on the exercise of such Rights, nor shall
anything contained herein or in any Rights Certificate be construed to confer upon the holder of
any Rights, as such, any of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 5.8), or to receive dividends or subscription
rights, or otherwise, until such Rights shall have been exercised or exchanged in accordance with
the provisions hereof.
5.8 Notice of Proposed Actions. In case the Company shall propose at or after the
Separation Time and prior to the Expiration Time (i) to effect or permit a Flip-over Transaction or
Event or (ii) to effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to the Rights Agent and to each holder of a Right, in accordance
with Section 5.9, a notice of such proposed action, which shall specify the date on which such
Flip-over Transaction or Event, liquidation, dissolution, or winding up is to take place, and such
notice shall be so given at least 20 Business Days prior to the date of the taking of such proposed
action.
5.9 Notices. Notices or demands authorized or required by this Agreement to be given
or made by the Rights Agent or by the holder of any Rights to or on the Company shall be
sufficiently given or made if delivered or sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent) as follows:
-26-
Any notice or demand authorized or required by this Agreement to be given or made by the Company or
by the holder of any Rights to or on the Rights Agent shall be sufficiently given or made if
delivered or sent by first-class mail, postage prepaid, addressed (until another address is filed
in writing with the Company) as follows:
Mellon Investor Services LLC
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
000 Xxxxxxxxxx Xxxxxxxxx
Xxxxxx Xxxx, XX 00000
Attention: General Counsel
Telecopier No.: (000) 000-0000
Notices or demands authorized or required by this Agreement to be given or made by the Company or
the Rights Agent to or on the holder of any Rights shall be sufficiently given or made if delivered
or sent by first-class mail, postage prepaid, addressed to such holder at the address of such
holder as it appears upon the registry books of the Rights Agent or, prior to the Separation Time,
on the registry books of the transfer agent for the Common Stock. Any notice that is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives the notice.
5.10 Suspension of Exercisability or Exchangeability. To the extent that the Company
determines in good faith that some action will or need be taken pursuant to, or in order to
properly give effect to, Section 2.3, 3.1 or 4.4 or to comply with federal or state securities laws
or applicable Trading Regulations, the Company may suspend the exercisability or exchangeability of
the Rights for a reasonable period sufficient to allow it to take such action or comply with such
laws or Trading Regulations. In the event of any such suspension, the Company shall issue as
promptly as practicable a public announcement (with prompt written notice thereof to the Rights
Agent) stating that the exercisability or exchangeability of the Rights has been temporarily
suspended. Notice thereof pursuant to Section 5.9 shall not be required. Upon any such
suspension, any rights of action vested in a holder of Rights shall be similarly suspended.
Failure to give a notice pursuant to the provisions of this Agreement shall not affect the
validity of any action taken hereunder; provided that nothing in this Section 5.10 shall affect the
rights and obligations of the Rights Agent pursuant to the other terms of this Agreement (including
under Section 4.1(b)).
5.11 Costs of Enforcement. The Company agrees that if the Company or any other Person
the securities of which are purchasable upon exercise of Rights fails to fulfill any of its
obligations pursuant to this Agreement, then the Company or such
-27-
Person will reimburse the holder of any Rights for the costs and expenses (including legal
fees) incurred by such holder in actions to enforce such holder’s rights pursuant to any Rights or
this Agreement.
5.12 Successors. All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Rights Agent shall bind and inure to the benefit of their respective
successors and assigns hereunder.
5.13 Benefits of this Agreement. Nothing in this Agreement shall be construed to give
to any Person other than the Company, the Rights Agent and the holders of the Rights any legal or
equitable right, remedy or claim under this Agreement and this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the holders of the Rights.
5.14 Determination and Actions by the Board of Directors, etc. The Board of Directors
of the Company shall have the exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board or to the Company, or as may be
necessary or advisable in the administration of this Agreement, including, without limitation, the
right and power to (i) interpret the provisions of this Agreement and (ii) make all determinations
deemed necessary or advisable for the administration or implementation of this Agreement, including
the right to determine the Rights to be voided pursuant to Section 3.1, after taking into account
the purpose of this Agreement and the Company’s interest in maintaining an orderly trading market
in the outstanding shares of Common Stock. All such actions, interpretations and determinations
done or made by the Board, shall (x) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other Persons, and (y) not subject the Board of Directors
of the Company to any liability to the holders of the Rights.
5.15 Descriptive Headings; Section References. Descriptive headings appear herein for
convenience only and shall not control or affect the meaning or construction of any of the
provisions hereof. Where a reference in this Agreement is made to a Section, such reference shall
be to a Section of this Agreement unless otherwise indicated.
5.16 GOVERNING LAW. (a) THIS AGREEMENT AND EACH RIGHT ISSUED HEREUNDER SHALL BE
DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF DELAWARE AND FOR ALL PURPOSES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO BE
MADE AND PERFORMED ENTIRELY WITHIN SUCH STATE; EXCEPT 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
-28-
YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE.
(b) (i) THE COMPANY AND EACH HOLDER OF RIGHTS HEREBY IRREVOCABLY SUBMITS TO THE EXCLUSIVE
JURISDICTION OF ANY STATE OR FEDERAL COURT LOCATED IN THE STATE OF DELAWARE OVER ANY SUIT, ACTION,
OR PROCEEDING ARISING OUT OF OR RELATING TO OR CONCERNING THIS AGREEMENT. The Company and each
holder of Rights acknowledge that the forum designated by this paragraph (b) has a reasonable
relation to this Agreement, and to such Persons’ relationship with one another.
(ii) The Company and each holder of Rights hereby waive, to the fullest extent permitted by
applicable law, any objection which they now or hereafter have to personal jurisdiction or to the
laying of venue of any such suit, action or proceeding brought in any court referred to in
paragraph (b)(i). The Company and each holder of Rights undertake not to commence any action
subject to this Agreement in any forum other than the forum described in this paragraph (b). The
Company and each holder of Rights agree that, to the fullest extent permitted by applicable law, a
final and non-appealable judgment in any such suit, action, or proceeding brought in any such court
shall be conclusive and binding upon such Persons.
5.17 Counterparts. This Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same instrument.
5.18 Severability. If any term or provision hereof or the application thereof to any
circumstance shall, in any jurisdiction and to any extent, be invalid or unenforceable, such term
or provision shall be ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than those as to which
it is held invalid or unenforceable; provided, however, that if such excluded provision shall
affect the rights, immunities, duties or obligations of the Rights Agent, the Rights Agent shall be
entitled to resign upon 15 days’ notice (or such lesser notice as is acceptable to the Company) in
writing mailed to the Company and to each transfer agent of Common Stock known to the Rights Agent
by registered or certified mail, and to the holders of the Rights in accordance with Section 5.9.
5.19 Force Majeure. Notwithstanding anything to the contrary contained herein,
neither the Company nor the Rights Agent shall be liable for any delays
-29-
or failures in performance resulting from acts beyond its reasonable control including,
without limitation, acts of God, terrorist acts, shortage of supply, breakdowns or malfunctions,
interruptions or malfunction of computer facilities, or loss of data due to power failures or
mechanical difficulties with information storage or retrieval systems, labor difficulties, war, or
civil unrest.
-30-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of
the date first above written.
|
MORGANS HOTEL GROUP CO. |
||||
| By: | /s/ Xxxxxxx Xxxxxxxxx | |||
| Name: | Xxxxxxx Xxxxxxxxx | |||
| Title: | Chief Financial Officer and Secretary | |||
MELLON INVESTOR SERVICES LLC as Rights Agent |
||||
| By: | /s/ Xxxxxx Xxxxxxxx | |||
| Name: | Xxxxxx Xxxxxxxx | |||
| Title: | Vice President | |||
EXHIBIT A
FORM OF RIGHTS CERTIFICATE
| Certificate No. W- | Rights |
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE OPTION OF THE
COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS BENEFICIALLY OWNED
BY ACQUIRING PERSONS OR AFFILIATES OR ASSOCIATES THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT) OR TRANSFEREES OF ANY OF THE FOREGOING WILL BE
VOID.
Rights Certificate
This certifies that , or
registered assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Amended and Restated Stockholder Protection Rights Agreement, dated as of
October 1, 2009 (as amended from time to time, the “Rights Agreement”), between Morgans
Hotel Group Co., a Delaware corporation (the “Company”), and Mellon Investor Services LLC, a
New Jersey limited liability company, as Rights Agent (the “Rights Agent”, which term shall
include any successor Rights Agent under the Rights Agreement), to purchase from the Company
at any time at or after the Separation Time (as such term is defined in the Rights
Agreement) and prior to the Expiration Time, one one-hundredth of a fully paid share of
Participating Preferred Stock, par value $0.01 per share (the “Preferred Stock”), of the
Company (subject to adjustment as provided in the Rights Agreement) at the Exercise Price
referred to below, upon presentation and surrender of this Rights Certificate with the Form
of Election to Exercise duly executed at the principal office of the Rights Agent in The
City of New York. The Exercise Price shall initially be $100.00 per Right and shall be
subject to adjustment in certain events as provided in the Rights Agreement.
In certain circumstances described in the Rights Agreement, the Rights evidenced hereby
may entitle the registered holder thereof to purchase securities of an entity other than the
Company or securities of the Company other than Preferred Stock or assets of the Company,
all as provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and conditions of
the Rights Agreement, which terms, provisions and conditions are hereby incorporated herein
by reference and made a part hereof and to which Rights Agreement reference is hereby made
for a full description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the Rights
Certificates. Copies of the Rights Agreement are on file at the principal office of the
Company and are available without cost upon written request.
This Rights Certificate, with or without other Rights Certificates, upon surrender at
the office of the Rights Agent designated for such purpose, may be exchanged for another
Rights Certificate or Rights Certificates of like tenor evidencing an aggregate number of
Rights equal to the aggregate number of Rights evidenced by the Rights Certificate or Rights
Certificates surrendered. If this Rights Certificate shall be exercised in part, the
registered holder shall be entitled to receive, upon surrender hereof, another Rights
Certificate or Rights Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, each Right evidenced by this
Certificate may be (a) redeemed by the Company under certain circumstances, at its option,
at a redemption price of $0.01 per Right or (b) exchanged by the Company under certain
circumstances, at its option, for one share of Common Stock per Right (or, in certain cases,
other securities or assets of the Company), subject in each case to adjustment in certain
events as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of any securities which may at any time be
issuable on the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or upon any
matter submitted to stockholders at any meeting thereof, or to give or withhold consent to
any corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Rights evidenced by this Rights Certificate
shall have been exercised or exchanged as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until it shall
have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.
Date: ,
_____
| ATTEST: | MORGANS HOTEL GROUP CO. | |||||||
| By | ||||||||
| Secretary | ||||||||
| Countersigned: | ||||||||
| MELLON INVESTOR SERVICES LLC | ||||||||
By |
||||||||
| Authorized Signature | ||||||||
-2-
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer this Rights Certificate.)
holder desires to transfer this Rights Certificate.)
FOR VALUE RECEIVED hereby
sells, assigns and transfers unto |
||
| (Please print name and address of transferee) |
this Rights Certificate, together with all right, title and interest therein, and does
hereby irrevocably constitute and appoint Attorney, to transfer
the within Rights Certificate on the books of the within-named Company, with full power of
substitution.
Dated: ,
_____
Signature Guaranteed: |
||
| Signature | ||
| (Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever) |
Signatures must be guaranteed by a participant in the Securities Transfer Agent
Medallion Program, the Stock Exchanges Medallion Program or the New York Stock Exchange,
Inc. Medallion Signature Program.
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and shares of
Common Stock, that the Rights evidenced by this Rights Certificate are not, and, to the
knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement).
| Signature | ||||
NOTICE
In the event the certification set forth above is not completed in connection with a
purported assignment, the Company and the Rights Agent will deem the Beneficial Owner of the
Rights evidenced by the enclosed Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) or a transferee of any
of the foregoing and accordingly will deem the Rights evidenced by such Rights Certificate
to be void and not transferable or exercisable.
-2-
[To be attached to each Rights Certificate]
FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
exercise the Rights Certificate.)
The
undersigned hereby irrevocably elects to exercise ____
whole Rights represented by the attached Rights Certificate to purchase the shares of
Participating Preferred Stock issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name of:
| Social Security or Other Taxpayer | ||||
| Identification Number: | ||||
If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a
new Rights Certificate for the balance of such Rights shall be registered in the name of and
delivered to:
| Address: | ||||
| Social Security or Other Taxpayer | ||||
| Identification Number: | ||||
Dated: ,
_____
Signature Guaranteed:
| Signature | ||||
| (Signature must correspond to name as written upon the face of this Rights Certificate in every particular, without alteration or enlargement or any change whatsoever) | ||||
Signatures must be guaranteed by a participant in the Securities Transfer Agent
Medallion Program, the Stock Exchanges Medallion Program or the New York Stock Exchange,
Inc. Medallion Signature Program.
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and shares of
Common Stock, that the Rights evidenced by the attached Rights Certificate are not, and, to
the knowledge of the undersigned, have never been, Beneficially Owned by an Acquiring Person
or an Affiliate or Associate thereof (as defined in the Rights Agreement).
| Signature | ||||
NOTICE
In the event the certification set forth above is not completed in connection with a
purported exercise, the Company and the Rights Agent will deem the Beneficial Owner of the
Rights evidenced by the attached Rights Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) or a transferee of any
of the foregoing and accordingly will deem the Rights evidenced by such Rights Certificate
to be void and not transferable or exercisable.
-2-
EXHIBIT B
FORM OF CERTIFICATE OF DESIGNATION AND TERMS
OF PARTICIPATING PREFERRED STOCK OF MORGANS HOTEL GROUP CO.
OF PARTICIPATING PREFERRED STOCK OF MORGANS HOTEL GROUP CO.
Pursuant to Section 151 of the General
Corporation Law of the State of Delaware
Corporation Law of the State of Delaware
We, the undersigned, and ,
the and , respectively, of Morgans
Hotel Group Co., a Delaware corporation (the “Corporation”), do hereby certify as follows:
Pursuant to authority granted by Article FOURTH of the Amended and Restated Certificate
of Incorporation of the Corporation, and in accordance with the provisions of Section 151 of
the General Corporation Law of the State of Delaware, the Board of Directors of the
Corporation has adopted the following resolutions fixing the designation and certain powers,
preferences and other rights of a new series of the Corporation’s Preferred Stock, par value
$0.01 per share, and certain qualifications, limitations and restrictions thereon:
RESOLVED, that there is hereby established a series of Preferred Stock, par value
$0.01 per share, of the Corporation, and the designation and certain powers, preferences
and other rights of the shares of such series, and certain qualifications, limitations
and restrictions thereon, are hereby fixed as follows:
(i) The distinctive serial designation of this series shall be “Participating
Preferred Stock” (hereinafter called “this Series”). Each share of this Series shall
be identical in all respects with the other shares of this Series except as to the
dates from and after which dividends thereon shall be cumulative.
(ii) The number of shares in this Series shall initially be [ • ], 1 which
number may from time to time be increased or decreased (but not below the number then
outstanding) by the Board of Directors. Shares of this Series purchased by the
Corporation shall be cancelled and shall revert to authorized but unissued shares of
Preferred Stock undesignated as to series. Shares of this Series may be issued in
fractional shares which are whole number multiples of one one-hundredth of a share,
which fractional shares shall entitle the holder, in proportion to such holder’s
fractional share, to all rights of a holder of a whole share of this Series.
| 1 | Insert number equal to the number of shares of Common Stock outstanding on date prior to filing certificate of designation divided by 100. |
(iii) The holders of full or fractional shares of this Series shall be entitled
to receive, when and as declared by the Board of Directors, but only out of funds
legally available therefor, dividends, (A) on each date that dividends or other
distributions (other than dividends or distributions payable in Common Stock of the
Corporation) are payable on or in respect of Common Stock comprising part of the
Reference Package (as defined below), in an amount per whole share of this Series
equal to the aggregate amount of dividends or other distributions (other than
dividends or distributions payable in Common Stock of the Corporation) that would be
payable on such date to a holder of the Reference Package and (B) on the last day of
March, June, September and December in each year, in an amount per whole share of
this Series equal to the excess (if any) of $[ • ] 2 over the aggregate dividends
paid per whole share of this Series during the three month period ending on such last
day. Each such dividend shall be paid to the holders of record of shares of this
Series on the date, not exceeding sixty days preceding such dividend or distribution
payment date, fixed for the purpose by the Board of Directors in advance of payment
of each particular dividend or distribution. Dividends on each full and each
fractional share of this Series shall be cumulative from the date such full or
fractional share is originally issued; provided that any such full or fractional
share originally issued after a dividend record date and on or prior to the dividend
payment date to which such record date relates shall not be entitled to receive the
dividend payable on such dividend payment date or any amount in respect of the period
from such original issuance to such dividend payment date.
The term “Reference Package” shall initially mean 100 shares of Common Stock,
par value $0.01 per share (“Common Stock”), of the Corporation. In the event the
Corporation shall at any time after the close of business on [ • ] 3 (A) declare or
pay a dividend on any Common Stock payable in Common Stock, (B) subdivide any Common
Stock or (C) combine any Common Stock into a smaller number of shares, then and in
each such case the Reference Package after such event shall be the Common Stock that
a holder of the Reference Package immediately prior to such event would hold
thereafter as a result thereof.
Holders of shares of this Series shall not be entitled to any dividends, whether
payable in cash, property or stock, in excess of full cumulative dividends, as herein
provided on this Series.
| 2 | Insert an amount equal to 1/4 of the Exercise Price. | |
| 3 | For a certificate of designation relating to shares to be issued pursuant to Section 2.3 of the Rights Agreement, insert the Separation Time. For a certificate of designation relating to shares to be issued pursuant to Section 3.1(d) of the Rights Agreement, insert the Flip-in Date. |
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So long as any shares of this Series are outstanding, no dividend (other than a
dividend in Common Stock or in any other stock ranking junior to this Series as to
dividends and upon liquidation) shall be declared or paid or set aside for payment or
other distribution declared or made upon the Common Stock or upon any other stock
ranking junior to this Series as to dividends or upon liquidation, unless the full
cumulative dividends (including the dividend to be paid upon payment of such dividend
or other distribution) on all outstanding shares of this Series shall have been, or
shall contemporaneously be, paid. When dividends are not paid in full upon this
Series and any other stock ranking on a parity as to dividends with this Series, all
dividends declared upon shares of this Series and any other stock ranking on a parity
as to dividends shall be declared pro rata so that in all cases the amount of
dividends declared per share on this Series and such other stock shall bear to each
other the same ratio that accumulated dividends per share on the shares of the Series
and such other stock bear to each other. Neither the Common Stock nor any other stock
of the Corporation ranking junior to or on a parity with this Series as to dividends
or upon liquidation shall be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for a sinking fund for the
redemption of any shares of any such stock) by the Corporation (except by conversion
into or exchange for stock of the Corporation ranking junior to this Series as to
dividends and upon liquidation), unless the full cumulative dividends (including the
dividend to be paid upon payment of such dividend, distribution, redemption, purchase
or other acquisition) on all outstanding shares of this Series shall have been, or
shall contemporaneously be, paid.
(iv) In the event of any merger, consolidation, reclassification or other
transaction in which the shares of Common Stock are exchanged for or changed into
other stock or securities, cash and/or any other property, then in any such case the
shares of this Series shall at the same time be similarly exchanged or changed in an
amount per whole share equal to the aggregate amount of stock, securities, cash
and/or any other property (payable in kind), as the case may be, that a holder of the
Reference Package would be entitled to receive as a result of such transaction.
(v) In the event of any liquidation, dissolution or winding up of the affairs of
the Corporation, whether voluntary or involuntary, the holders of full and fractional
shares of this Series shall be entitled, before any distribution or payment is made
on any date to the holders of the Common Stock or any other stock of the Corporation
ranking junior to this Series upon liquidation, to be paid in full an amount per
whole share of
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this Series equal to the greater of (A) $[ • ] 4 or (B) the aggregate amount
distributed or to be distributed in connection with such liquidation, dissolution or
winding up to a holder of the Reference Package (such greater amount being
hereinafter referred to as the “Liquidation Preference”), together with accrued
dividends to such distribution or payment date, whether or not earned or declared. If
such payment shall have been made in full to all holders of shares of this Series,
the holders of shares of this Series as such shall have no right or claim to any of
the remaining assets of the Corporation.
In the event the assets of the Corporation available for distribution to the
holders of shares of this Series upon any liquidation, dissolution or winding up of
the Corporation, whether voluntary or involuntary, shall be insufficient to pay in
full all amounts to which such holders are entitled pursuant to the first paragraph
of this Section (v), no such distribution shall be made on account of any shares of
any other class or series of Preferred Stock ranking on a parity with the shares of
this Series upon such liquidation, dissolution or winding up unless proportionate
distributive amounts shall be paid on account of the shares of this Series, ratably
in proportion to the full distributable amounts for which holders of all such parity
shares are respectively entitled upon such liquidation, dissolution or winding up.
Upon the liquidation, dissolution or winding up of the Corporation, the holders
of shares of this Series then outstanding shall be entitled to be paid out of assets
of the Corporation available for distribution to its stockholders all amounts to
which such holders are entitled pursuant to the first paragraph of this Section
(v) before any payment shall be made to the holders of Common Stock or any other
stock of the Corporation ranking junior upon liquidation to this Series.
For the purposes of this Section (v), the consolidation or merger of, or binding
statutory share exchange by, the Corporation with any other corporation shall not be
deemed to constitute a liquidation, dissolution or winding up of the Corporation.
(vi) The shares of this Series shall not be redeemable.
| 4 | Insert an amount equal to 100 times the Exercise Price in effect as of the Separation Time. |
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(vii) In addition to any other vote or consent of stockholders required by law
or by the Amended and Restated Certificate of Incorporation, as amended, of the
Corporation, and except as otherwise required by law, each share (or fraction
thereof) of this Series shall, on any matter, vote as a class with any other capital
stock comprising part of the Reference Package and shall have the number of votes
thereon that a holder of the Reference Package would have.
IN WITNESS WHEREOF, the undersigned have signed and attested this certificate on the
day of . .
Attest: |
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