MAXXAM Inc.
and
American Stock Transfer & Trust Company
Rights Agent
RIGHTS AGREEMENT
Dated as of December 15, 1999
Table of Contents
Page
Section 1. Certain Definitions.............................................1
Section 2. Appointment of Rights Agent.....................................8
Section 3. Issuance of Rights Certificates.................................8
Section 4. Form of Rights Certificates....................................10
Section 5. Countersignature and Registration..............................11
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates...................................................11
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights......................................................12
Section 8. Cancellation and Destruction of Rights Certificates............15
Section 9. Reservation and Availability of Capital Stock..................15
Section 10. Preferred Stock Record Date....................................17
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights...............................................17
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.....32
Section 13. Consolidation, Merger or Sale or Transfer of Property,
Assets or Earning Power........................................32
Section 14. Fractional Rights and Fractional Shares........................35
Section 15. Rights of Action...............................................36
Section 16. Agreement of Rights Holders Concerning Transfer and
Ownership of Rights............................................36
Section 17. Rights Certificate Holder Not Deemed a Stockholder.............38
Section 18. Concerning the Rights Agent....................................38
Section 19. Merger or Consolidation or Change of Name of Rights Agent......39
Section 20. Duties of Rights Agent.........................................39
Section 21. Change of Rights Agent.........................................42
Section 22. Issuance of New Rights Certificates............................42
Section 23. Redemption and Termination.....................................43
Section 24. Notice of Certain Events.......................................44
Section 25. Notices........................................................45
Section 26. Supplements and Amendments.....................................46
Section 27. Successors.....................................................47
Section 28. Determinations and Actions by the Board of Directors, etc......47
Section 29. Exchange.......................................................47
Section 30. Benefits of this Agreement.....................................48
Section 31. Severability...................................................48
Section 32. Governing Law..................................................49
Section 33. Counterparts...................................................49
Section 34. References.....................................................49
Section 35. Descriptive Headings...........................................49
Section 36. Grammatical Construction.......................................49
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of December 15, 1999 (the "Agreement")
between MAXXAM Inc., a Delaware corporation (the "Company"), and American Stock
Transfer & Trust Company, as Rights Agent (the "Rights Agent").
WHEREAS, on December 15, 1999 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company has authorized and declared a
distribution of (i) one Series A Preferred Stock Purchase Right (the "Series A
Right") for each share of Class A $.05 Non-Cumulative Participating Convertible
Preferred Stock, value $.50 per share (the "Class A Preferred Stock"),
outstanding on the Record Date (as defined in Section 1) and (ii) one Series B
Preferred Stock Purchase Right (the "Series B Right") for each share of Common
Stock, par value $.50 per share of the Company Common Stock (as defined in
Section 1), outstanding on the Record Date (the Common Stock and the Class A
Preferred Stock being hereinafter referred to collectively as the "Stock"), and
has authorized the issuance of one Series A Right for each share of Class A
Preferred Stock, and one Series B Right for each share of Common Stock, issued
between the Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date (as defined in Section 1), and in
certain cases following the Distribution Date. Each Series A Right represents
the right to purchase one additional share of Class A Preferred Stock of the
Company upon the terms and subject to the conditions hereinafter set forth, and
each Series B Right initially represents the right to purchase one one-hundredth
of a share of Class B Junior Participating Preferred Stock of the Company having
the rights, powers and preferences set forth in the Certificate of Designation,
Preferences and Rights attached hereto as Exhibit A, upon the terms and subject
to the conditions hereinafter set forth (the Series A Rights and the Series B
Rights being herein referred to collectively as the "Rights").
NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth in this Agreement, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" means:
(i) any Person who or which, together with all
Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the Common Stock then
outstanding, but shall not include the Company, any of its
Subsidiaries, any employee benefit plan of the Company or of
any Subsidiary of the Company, or any Person holding Common
Stock for or pursuant to the terms of any such plan.
(ii) Notwithstanding the foregoing, a Person does not
become an "Acquiring Person" solely as the result of an
acquisition of shares of Stock by the Company or a
Subsidiary of the Company which, by reducing the number of
shares outstanding, increases the proportionate number of
shares beneficially owned by such Person to 15% or more of
the shares of Common Stock then outstanding; provided,
however, that if a Person becomes the Beneficial Owner of
15% or more of the shares of Common Stock then outstanding
solely by reason of such a share acquisition by the Company
or a Subsidiary of the Company and shall, thereafter,
together with its Affiliates and Associates, become the
Beneficial Owner of any additional shares of Common Stock
(other than (x) through the exercise of any presently
outstanding options, or the issuance hereafter by the
Company of any options, stock appreciation rights or other
securities convertible into or exercisable for stock (or the
exercise of any such options, rights or other securities),
(y) as a result of any dividend by the Company payable in
stock or securities convertible into or exercisable for
stock or (z) by reason of the acquisition by such Person of
beneficial ownership of an aggregate of no more than 10,000
shares of Common Stock (such number to be appropriately
adjusted to reflect stock dividends, splits,
reclassifications and combinations from and after the date
of this Agreement) in any single calendar year, provided
that none of such shares are owned directly by such Person
or nominees for such Person), then such Person shall, if
such Person shall then meet the requirements of the first
sentence of this paragraph (a) and shall not otherwise be
exempted from this definition of "Acquiring Person," be
deemed to be an Acquiring Person;
(iii) no Person who, together with all Affiliates and
Associates of such Person, as of the date of this Agreement,
is the Beneficial Owner of 15% or more of the outstanding
Common Stock (an "Excepted Person") shall be deemed to be an
Acquiring Person; provided, however, that if such Person
shall, together with its Affiliates and Associates, become
the Beneficial Owner of any additional shares of Common
Stock (other than (x) through the exercise of any presently
outstanding options, or the issuance hereafter by the
Company of any options, stock appreciation rights or other
securities convertible into or exercisable for stock (or the
exercise of any such options, rights or other securities),
(y) as a result of any dividend by the Company payable in
stock or securities convertible into or exercisable for
stock or (z) by reason of the acquisition by such Person of
beneficial ownership of an aggregate of no more than 10,000
shares of Common Stock (such number to be appropriately
adjusted to reflect stock dividends, splits,
reclassifications and combinations) in any single calendar
year, provided that none of such shares are owned directly
by such Person or nominees for such Person), such Person
shall, if such Person shall then meet the requirements of
the first sentence of this paragraph (a) and shall not
otherwise be exempted from this definition of "Acquiring
Person," be deemed to be an Acquiring Person;
(iv) no Person who is a member of an Excepted Group,
nor any Person who shall thereafter become a member of such
Excepted Group, shall be deemed to be an Acquiring Person,
provided, however, that (x) if the aggregate number of
shares of outstanding Common Stock beneficially owned by
such Excepted Group shall hereafter increase (other than (A)
through the exercise of any presently outstanding options,
or the issuance hereafter by the Company of any options,
stock appreciation rights or other securities convertible
into or exercisable for stock (or the exercise of any such
options, rights or other securities), (B) as a result of any
dividend of the Company payable in stock or securities
convertible into or exercisable for stock or (C) by reason
of the acquisition by the members of such Excepted Group of
beneficial ownership of an aggregate of no more than 10,000
shares of Common Stock (such number to be appropriately
adjusted to reflect stock dividends, splits,
reclassifications and combinations) in any single calendar
year, provided, that none of such shares are owned directly
by any member of such Excepted Group or nominees for any
such member) or (y) there shall no longer be at least one
member of such Excepted Group who was a member of such
Excepted Group on the date of this Agreement, then, each
such Person who shall then meet the requirements of the
first sentence of this paragraph (a) and shall not otherwise
be exempted from this definition of "Acquiring Person" shall
then be deemed to be an Acquiring Person.
(v) no Person who makes an inadvertent acquisition of
the beneficial ownership of 15% or more of the Stock of the
Company shall be deemed an "Acquiring Person" if the Board
of Directors determines in good faith that such acquisition
was inadvertent and such Person immediately divests itself
of a sufficient number of shares of Stock so as to no longer
be an Acquiring Person.
(vi) no Person who is or becomes the Beneficial Owner
of 15% of the Stock of the Company then outstanding, shall
be deemed an "Acquiring Person" if such Person has obtained
the authorization of the Board of Directors for such
acquisition.
(b) "Affiliate" and "Associate" when used with reference to
any Person, has the meaning given to such term in Rule 12b-2 of
the General Rules and Regulations under the Exchange Act, as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "beneficially own," and have "beneficial
ownership" of any securities:
(i) which such Person or any Affiliate or Associate of
such Person beneficially owns, directly, or indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates, has, directly or indirectly, the
right to acquire (whether or not then exercisable) pursuant
to any agreement, arrangement or understanding (whether or
not in writing) 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" of, or to
"beneficially own," (A) securities tendered pursuant to a
tender or exchange offer made by or on behalf of such Person
or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange
thereunder or cease to be subject to withdrawal by the
tendering securityholder, (B) securities obtainable upon
exercise of Rights at any time prior to the occurrence of a
Triggering Event, or (C) securities issuable upon exercise
of Rights from and after the occurrence of a Triggering
Event which Rights were acquired by such Person or any of
such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22
of this Agreement (the "Original Rights") or pursuant to
Section 11(i) or Section 11(p) of this Agreement in
connection with an adjustment made with respect to any
Original Rights;
(iii) which such Person or any Affiliates or Associates
of such Person has, directly or indirectly, the right
(whether or not then exercisable) to vote, or to direct the
voting of, including pursuant to any agreement, arrangement
or understanding, whether or not in writing; provided,
however, that a Person shall not be deemed the "Beneficial
Owner" of, or to "beneficially own," or have "beneficial
ownership" of any security pursuant to this clause (iii) if
such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy given in response to a public
proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the General
Rules and Regulations under the Exchange Act, and (B) is not
also then reportable by such Person on Schedule 13D under
the Exchange Act (or any comparable or successor schedule or
report);
(iv) which such Person or any Affiliate or Associate of
such Person has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act or any comparable or successor
provision); or
(v) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or
Associate of such Person) with which such Person (or any
Affiliate or Associate of such Person) has any agreement,
arrangement or understanding (whether or not in writing),
for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in the proviso to
subparagraph (iii) of this Section 1(d) or disposing of any
securities of the Company.
Nothing in this Section 1(c) shall cause a Person engaged in business
as an underwriter of securities to be the "Beneficial Owner" of, or to
"beneficially own," any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(d) "Board of Directors" means the Board of Directors of the
Company, as the same is constituted from time to time, or if the
Company ceases to exist as a result of a Business Combination or
otherwise, the Board of Directors of the Company's successor, if
any.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of
Texas or State of New York are authorized or obligated by law or
executive order to close.
(f) "Class A Preferred Stock" shall mean the Class A $.05
Non-Cumulative Participating Convertible Preferred Stock, par
value $.50 per share, of the Company, except that "Class A
Preferred Stock," when used with reference to any Person other
than the Company (or with reference to the Company, if the
Company is the Principal Party) shall mean the capital stock of
such Person having rights, privileges, preferences and other
terms substantially similar to the rights, privileges,
preferences and other terms of the Class A Preferred Stock.
(g) "Close of Business" on any given date shall mean 5:00
p.m., New York time, on such date; provided, however, that if
such date is not a Business Day it shall mean 5:00 p.m., New York
time, on the next succeeding Business Day.
(h) "Common Stock" when used in reference to the Company
prior to a Section 13 Event (defined in this Definition Section)
shall mean the common stock, par value $.50 per share, of the
Company. "Common Stock" when used with reference to any Person
(other than the Company prior to a Section 13 Event (defined in
this Definition section)) shall mean Shares of capital stock of
such Person (if such Person is a corporation) of any class or
series, or units of equity interests in such Person (if such
Person is not a corporation) of any class or series, the terms of
which shares or units do not limit (as a fixed amount and not
merely in proportional terms) the amount of dividends or income
payable or distributable on such shares or units or the amount of
property or assets distributable on such shares or units upon any
voluntary or involuntary liquidation, dissolution or winding up
of such Person and do not provide that such shares or units are
subject to redemption at the option of such Person, or any shares
of capital stock or units of equity interests into which the
foregoing shall be reclassified or changed; provided, however,
that if at any time there are more than one such class or series
of capital stock of or equity interests in such Person, "Common
Stock" of such Person will include all such classes and series
substantially in the proportion of the total number of shares or
other units of each such class or series outstanding at such
time.
(i) "Distribution Date" means the earlier of (i) the Close
of Business on the tenth day after the Stock Acquisition Date
(or, if the tenth day after the Stock Acquisition Date occurs
before the Record Date, the Close of Business on the Record Date)
or (ii) the Close of Business on the tenth Business Day (or such
later date as may be determined by the Company's Board of
Directors) after the date that a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company,
any employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed or
established by the Company for or pursuant to the terms of any
such plan) is first published or sent or given within the meaning
of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act (or any successor provision), if upon consummation
thereof, such Person would be the Beneficial Owner of 15% or more
of the shares of Common Stock then outstanding.
(j) "Excepted Group" means a group falling within the
meanings of Section 13(d)(3) of the Exchange Act, as in effect on
the date of this Agreement, and whose members on the date of this
Agreement, beneficially own an aggregate of 15% or more of the
outstanding Common Stock
(k) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and any successor statute.
(l) "Expiration Date" means the Close of Business on
December 11, 2009.
(m) "Junior Preferred Stock" shall mean shares of Class B
Junior Participating Preferred Stock, par value $.50 per share,
of the Company, and, to the extent that there are not a
sufficient number of shares of Class B Junior Participating
Preferred Stock authorized to permit the full exercise of the
Rights, any other series of preferred stock, par value $.50 per
share, of the Company designated for such purpose containing
rights, privileges, preferences and other terms substantially
similar to the rights, privileges, preferences and other terms of
the Junior Preferred Stock.
(n) "Person" shall mean any individual, corporation,
partnership, limited liability company, joint venture,
association, trust, unincorporated organization or other entity,
and shall include any "group" as that term is used in Rule
13d-5(d) under the Exchange Act or any successor provision.
(o) "Principal Party" shall mean: (i) in the case of any
transaction described in clause (x) or (y) of the first sentence
of Section 13(a), the Person that is the issuer of any securities
into which shares of capital stock of the Company are converted
in such merger or consolidation (or, if there is more than one
such Person, the Person that is the issuer of the Common Stock
having the greatest aggregate market value), and if no securities
are so issued, the Person that is the other party to such merger
or consolidation; and (ii) in the case of any transaction
described in clause (z) of the first sentence of Section 13(a),
the Person that is the party receiving the greatest portion of
the assets or earning power transferred pursuant to such
transaction or transactions; provided, however, that in any such
case, (1) if the Common Stock of such Person is not at such time
and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and
such Person is a direct or indirect Subsidiary of another Person
the Common Stock of which is and has been so registered,
"Principal Party" shall refer to such other Person; and (2) in
case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Stocks of two or more of which are
and have been so registered, "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock
having the greatest aggregate market value.
(p) "Record Date" means the Close of Business on December
29, 1999.
(q) "Redemption Date" means the time at which the Rights are
scheduled to be redeemed as provided in Section 23.
(r) "Rights Agent" means American Stock Transfer & Trust
Company, or any Co-Rights Agent or Successor Rights Agent
appointed by the Company pursuant to Section 2.
(s) "Section 11(a)(ii) Event" shall mean any event described
in Section 11(a)(ii) (A), (B) or (C) of this Agreement.
(t) "Securities Act" means the Securities Act of 1933, as
amended, and any successor statute.
(u) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) of this Agreement.
(v) "Stock Acquisition Date" shall mean the first date of
public disclosure (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section
13(d) under the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such.
(w) "Subsidiary" shall mean, with reference to any Person,
any other Person of which an amount of voting securities
sufficient to elect at least a majority of the directors or other
governing body is owned, directly or indirectly, by such Person,
or otherwise controlled by such Person.
(x) "Tender Offer Date" means the date of commencement or
public disclosure of an intention to commence (including any such
commencement or public disclosure which occurs on or after the
date of this Agreement and prior to the issuance of the Rights) a
tender offer or exchange offer by a Person if, after acquiring
the maximum number of securities sought pursuant to such offer,
such Person, or any Affiliate or Associate of such Person, would
be an Acquiring Person.
(y) "Triggering Event" occurs when a Person becomes an
Acquiring Person as set forth in Section 11(a)(ii) or Section 13.
(z) "Other Definitions". The following terms have the
meanings ascribed to them in the Sections noted:
Adjustment Shares...............................Section 11(a)(ii)
Class A Preferred Equivalents..................Section 11(a)(iii)
Common Stock Equivalents.......................Section 11(a)(iii)
current market price................................Section 11(d)
Junior Equivalent Preferred Stock...................Section 11(b)
Purchase Price.....................................Sections 7(b),
11(a)(ii) and 13(a)
Redemption Price....................................Section 23(a)
Rights Certificates..................................Section 3(a)
Section 11(a)(ii) Trigger Date.................Section 11(a)(iii)
Series A Current Value.........................Section 11(a)(iii)
Series B Current Value.........................Section 11(a)(iii)
Series A Spread................................Section 11(a)(iii)
Series B Spread................................Section 11(a)(iii)
Substitution Period............................Section 11(a)(iii)
Trading Day......................................Section 11(d)(i)
Section 2. Appointment of Rights Agent. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of the
Rights (who, in accordance with Section 3 of this Agreement, shall prior to the
Distribution Date also be the holders of the Stock) in accordance with the terms
and conditions set forth in this Agreement, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such Co-Rights
Agents as it may deem necessary or desirable.
Section 3. Issuance of Rights Certificates.
(a) Until the Distribution Date (i) the Rights will be
issued in respect of the Stock, will be evidenced (subject to the
provisions of paragraph (b) of this Section 3) by the
certificates for the Stock registered in the names of the holders
of the Stock (which certificates for Stock shall be deemed also
to be certificates for Rights) and not by separate certificates,
and (ii) the Rights will be transferable only in connection with
the transfer of the underlying shares of Stock (including a
transfer to the Company). As soon as practicable after the
Distribution Date, the Rights Agent will send by first-class,
insured, postage prepaid mail, to each record holder of the Stock
as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, one
or more right certificates, in substantially the form of Exhibits
B and C hereto, as the case may be (the "Rights Certificates"),
evidencing one Series A Right for each share of Class A Preferred
Stock so held and one Series B Right for each share of Common
Stock so held, subject to adjustment as provided herein. In the
event that an adjustment in the number of Rights per share of
Stock has been made pursuant to Section 11(i) or Section 11(p) of
this Agreement, at the time of distribution of the Rights
Certificates the Company may, at its option, make appropriate
rounding adjustments (in accordance with Section 14(a) of this
Agreement) so that Rights Certificates representing only whole
numbers of Rights are distributed and cash is paid in lieu of any
fractional Rights. As of and after the Distribution Date, the
Rights will be evidenced solely by such Rights Certificates.
(b) The Company shall send a copy of the document entitled
"Summary of Rights to Purchase Preferred Stock," in substantially
the form attached hereto as Exhibit D, by first class, postage
prepaid mail, to each record holder of Stock as of the Close of
Business on the Record Date, at the address of such holder shown
on the records of the Company. With respect to certificates for
Stock outstanding as of the Record Date, until the Distribution
Date, the Rights associated with the Stock evidenced by such
certificates will be evidenced by such certificates alone and the
registered holders of the Stock shall also be the registered
holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date, the transfer of any
certificates representing shares of Stock in respect of which
Rights have been issued shall also constitute the transfer of the
Rights associated with the shares of Stock represented by such
certificates.
(c) Rights shall be issued in respect of all shares of Stock
which are issued (whether originally issued or from the Company's
treasury) after the Record Date but prior to the earlier of the
Distribution Date or the Expiration Date. Certificates
representing such shares of Stock shall also be deemed to be
certificates for Rights, and shall bear the following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in that certain Rights
Agreement between MAXXAM Inc. (the "Company") and American
Stock Transfer & Trust Company (the "Rights Agent"), dated
as of December 15, 1999; as the same has been or may
hereafter be amended or supplemented (the "Rights
Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the
principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such
Rights will be evidenced by separate certificates and will
no longer be evidenced by this certificate. The Company will
mail to the holder of this certificate a copy of the Rights
Agreement, as in effect on the date of mailing, without
charge promptly after receipt of a written request therefor.
Under certain circumstances as set forth in the Rights
Agreement, Rights issued to, or held by any Person who is,
was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may become null and
void.
With respect to such certificates containing the foregoing legend,
until the earlier of (i) the Distribution Date or (ii) the Expiration
Date, the Rights associated with the Stock represented by such
certificates shall be evidenced by such certificates alone and the
registered holders of the Stock shall also be the registered holders of
the associated Rights, and the transfer of any of such certificates
shall also constitute the transfer of the Rights associated with the
Stock represented by such certificates.
(d) Certificates representing shares of Stock issued after
the Record Date and prior to the Distribution Date in exchange or
substitution for, or in replacement of, other Stock certificates
or upon transfer of shares of Stock shall bear the legend set
forth in Section 3(c) of this Agreement.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to
purchase shares and the form of assignment to be printed on the
reverse thereof) shall each be substantially in the forms set
forth in Exhibits B and C hereto, as the case may be, and may
have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company
may deem appropriate and as are not inconsistent with the
provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or
to conform to usage. Subject to the provisions of Section 11 and
Section 22 of this Agreement, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date and on their
face shall entitle the holders thereof to purchase (i) in the
case of Series A Rights, the number of shares of Class A
Preferred Stock, and (ii) in the case of Series B Rights, such
number of one one-hundredths of a share of Junior Preferred
Stock, as shall be set forth therein at the Purchase Price set
forth therein, but the number and kind of securities purchasable
upon the exercise of each Right and the Purchase Price thereof
shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to this Agreement
that represents Rights beneficially owned by or formerly
beneficially owned, on or after the Distribution Date, by a
Person known by the Company to be: (i) an Acquiring Person or any
Associate or Affiliate of Acquiring Person, (ii) a direct or
indirect transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after such
Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to holders of equity interests in an Associate or
Affiliate of such Acquiring Person or to any Person with whom
such Acquiring Person or an Associate or Affiliate of such
Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer
which the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding which has as a
primary purpose or effect avoidance of Section 7(e) of this
Agreement, and any Rights Certificate issued pursuant to Section
6, Section 11 or Section 22 of this Agreement upon transfer,
exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
The Rights represented by this Rights Certificate are or
were beneficially owned by a Person who was or became an
Acquiring Person or an Affiliate or Associate of an
Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the
Rights represented hereby are or may become null and void
in the circumstances specified in Section 7(e) of the
Rights Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman, its President or any Vice President
thereunto duly authorized, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a
facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Rights Certificates
shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates nevertheless may be
countersigned by the Rights Agent and issued and delivered by the
Company with the same force and effect as though the person who
signed such Rights Certificates had not ceased to be such officer
of the Company; and any Rights Certificates may be signed on
behalf of the Company by any person who, at the actual date of
the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although
at the date of the execution of this Agreement any such Person
was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office or offices
designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration
and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective
holders of the Rights Certificates, the number of each series of
Rights evidenced on its face by each of the Rights Certificates
and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange
of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 of this Agreement, at any time after the Close of
Business on the Distribution Date, and at or prior to the Close
of Business on the Expiration Date, any Rights Certificate or
Certificates may be transferred, divided, combined or exchanged
for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of shares of Class A
Preferred Stock or one one-hundredths of a share of Junior
Preferred Stock (or, following a Triggering Event, Class A
Preferred Stock, Common Stock, other securities, cash or other
assets, as the case may be) as the Rights Certificate or
Certificates surrendered then entitled such holder (or former
holder in the case of a transfer) to purchase. Any registered
holder desiring to transfer, divide, combine or exchange any
Rights Certificate or Certificates shall make such request in
writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up,
combined or exchanged at the principal office or offices of the
Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered
Rights Certificate until the registered holder shall have
completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and
shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or its
Affiliates or Associates as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e) and Section 14 of this Agreement, countersign and
deliver to the Person entitled thereto a Rights Certificate (or
Rights Certificates, as the case may be) as so requested. As a
condition to such transfer, division, combination or exchange,
the Company may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Rights
Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case
of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and upon surrender to the Rights
Agent and cancellation of the Rights Certificate if mutilated,
and in each case reimbursement to the Company and the Rights
Agent of all reasonable expenses incidental thereto, the Company
will execute and deliver a new Rights Certificate of like tenor
to the Rights Agent for countersignature and delivery to the
registered owner in lieu of the Rights Certificate so lost,
stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Subject to Section 7(e) of this Agreement, the
registered holders of any Rights Certificate may exercise the
Rights evidenced thereby as provided in this Agreement in whole
or in part at any time after the Distribution Date upon surrender
of the Rights Certificate, with the form of election to purchase
and the certificate on the reverse side thereof duly executed, to
the Rights Agent at the principal office or offices of the Rights
Agent designated for such purpose, together with payment of the
aggregate Purchase Price with respect to the total number of
shares of Class A Preferred Stock or one one-hundredths of a
share of Junior Preferred Stock (or other securities, cash, or
other property or other assets, as the case may be), at or prior
to the earliest of the Expiration Date or the Redemption Date.
(b) The Purchase Price for each share of Class A Preferred
Stock pursuant to the exercise of a Series A Right shall
initially be $165, and shall be subject to adjustment from time
to time as provided in Sections 11 and 13(a) of this Agreement
and shall be payable in accordance with paragraph (c) below. The
Purchase Price for each one one-hundredth of a share of Junior
Preferred Stock pursuant to the exercise of a Series B Right
shall initially be $165, and shall be subject to adjustment from
time to time as provided in Sections 11 and 13(a) of this
Agreement and shall be payable in accordance with paragraph (c)
below. The Board of Directors, in its discretion, may determine
that part or all of the Purchase Price may be paid in
consideration other than cash, including without limitation
promissory notes.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect
to each Right so exercised, of the applicable Purchase Price and
an amount equal to any applicable transfer tax, the Rights Agent
shall, subject to Section 20(k) of this Agreement, thereupon
promptly (i) (A) requisition, from any transfer agent of the
shares of Class A Preferred Stock and Junior Preferred Stock, as
the case may be (or make available, if the Rights Agent is the
transfer agent for such shares), certificates for the total
number of shares of Class A Preferred Stock or one one-hundredths
of a share of Junior Preferred Stock to be purchased, and the
Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) if the Company shall have
elected to deposit the total number of shares of Class A
Preferred Stock and Junior Preferred Stock issuable upon exercise
of the Rights hereunder with a depositary agent, requisition from
the depositary agent depositary receipts representing such number
of shares of Class A Preferred Stock or one one-hundredths of a
share of Junior Preferred Stock as are to be purchased (in which
case certificates for the shares of Class A Preferred Stock and
Junior Preferred Stock represented by such receipts shall be
deposited by the transfer agent with the depositary agent), and
the Company will direct the depositary agent to comply with such
request, (ii) requisition from the Company the amount of cash, if
any, to be paid in lieu of fractional shares in accordance with
Section 14 of this Agreement, (iii) after receipt of such
certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder, and (iv) after receipt thereof,
deliver such cash, if any, to or upon the order of the registered
holder of such Rights Certificate. The payment of the applicable
Purchase Price (as such amount may be reduced pursuant to Section
11(a)(iii) of this Agreement, and subject to the provisions of
paragraph (b) of this Section 7) shall be made by check (subject
to collection), cashier's bank check, certified bank check or
money order payable to the order of the Company, or in such other
form as shall be acceptable to the Company and the Rights Agent.
In the event that the Company is obligated to issue other
securities (including Common Stock) of the Company or pay cash
and/or distribute other property pursuant to Section 11(a) of
this Agreement, the Company will make all arrangements necessary
so that such other securities, cash and/or other property are
available for distribution by the Rights Agent, if and when
appropriate. The Company reserves the right to require prior to
the occurrence of a Triggering Event that, upon any exercise of
Rights, a number of Rights be exercised so that only whole shares
of Class A Preferred Stock or Junior Preferred Stock would be
issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section
14 of this Agreement and subject to the payment of any tax or
governmental charge that may be imposed in connection therewith.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a direct or indirect transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a
transferee of an Acquiring Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights
pursuant to either (A) a direct or indirect transfer (whether or
not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with
whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or
(B) a direct or indirect transfer which the Board of Directors of
the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void
without any further action and no holder of such Rights shall
have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company
shall use all reasonable efforts to ensure that the provisions of
this Section 7(e) and Section 4(b) are complied with, but shall
have no liability to any holder of Rights Certificates or other
Person as a result of its failure to make (including any such
failure or delay by the Board of Directors of the Company) any
determinations with respect to an Acquiring Person or any of its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have (i)
completed and signed the certificate contained in the form of
election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as
the Company shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise,
transfer, division, combination, exchange or replacement shall, if surrendered
to the Company or any of its agents, be delivered to the Rights Agent for
cancellation or in cancelled form, or, if surrendered to the Rights Agent, shall
be cancelled by it, and no Rights Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Agreement. The
Rights Agent shall deliver all cancelled Rights Certificates to the Company, or
shall, at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that, until a
Triggering Event, it will cause to be reserved and kept available
out of its valid and unissued shares of Class A Preferred Stock
and Junior Preferred Stock sufficient shares of Class A Preferred
Stock and Junior Preferred Stock so as to permit the exercise in
full of all outstanding Rights in accordance with this Agreement
from and after a Distribution Date and prior to any Triggering
Event. The Company also covenants that, from and after a
Triggering Event, it will cause to be reserved and kept available
out of its authorized and unissued shares of Class A Preferred
Stock, Common Stock and/or other securities or out of its valid
and issued shares held in its treasury, the number of shares of
Class A Preferred Stock, Common Stock and/or other securities
that, as provided in this Agreement including Section 11(a)(iii)
of this Agreement, will be sufficient to permit the exercise in
full of all outstanding Rights. In each case, the Company shall,
to the extent necessary to satisfy the above requirements,
designate as Class A Preferred Stock any available authorized
shares of "blank check" or undesignated preferred stock.
(b) So long as the shares of Class A Preferred Stock and
Junior Preferred Stock (and, following the occurrence of a
Triggering Event, Common Stock and/or other securities) issuable
and deliverable upon the exercise of any Rights may be listed on
any United States national securities exchange or quoted on any
automated quotation system, the Company shall use its best
efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed
on such exchange or quoted on any automated quotation system upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as
soon, as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(a)(iii)
of this Agreement, a registration statement under the Securities
Act of 1933, with respect to any securities issuable upon
exercise of any Rights on an appropriate form, (ii) cause such
registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to
remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the earlier of (A) the
date as of which such Rights are no longer exercisable for such
securities, and (B) the date of the expiration of the Rights. The
Company will also take such action as may be appropriate under,
or to ensure compliance with, the securities or "blue sky" laws
of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period of
time not to exceed ninety (90) days after the date set forth in
clause (i) of the first sentence of this Section 9(c), the
exercisability of any Series of Rights in order to prepare and
file such registration statement and permit it to become
effective. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of such
Series of Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer
in effect. In addition, if the Company shall determine that a
registration statement is required following the Distribution
Date, the Company may temporarily suspend the exercisability of
any Series of Rights until such time as an appropriate
registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary,
Rights shall not be exercisable in any jurisdiction if any
requisite qualification in such jurisdiction shall not have been
obtained, the exercise thereof shall not be permitted under
applicable law or a required registration statement shall not
have been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Class A
Preferred Stock and one one-hundredths of a share of Junior
Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) delivered upon
exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid
and nonassessable.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the issuance
or delivery of the Rights Certificates and of any certificates
for Class A Preferred Stock or a number of one one-hundredths of
a share of Junior Preferred Stock (or Common Stock and/or other
securities, as the case may be) upon the exercise of Rights. The
Company shall not, however, be required to pay any transfer tax
which may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or
delivery of Class A Preferred Stock or a number of one
one-hundredths of a share of Junior Preferred Stock (or Common
Stock and/or other securities, as the case may be) in respect of
a name other than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise, or to
issue or deliver any certificates for Class A Preferred Stock or
a number of one one-hundredths of a share of Junior Preferred
Stock (or Common Stock and/or other securities, as the case may
be) in a name other than that of the registered holder upon the
exercise of any Rights, until such tax shall have been paid (any
such tax being payable by the holder of such Rights Certificate
at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
Section 10. Preferred Stock Record Date. Each Person in whose
name any certificate for Class A Preferred Stock or a number of one
one-hundredths of a share of Junior Preferred Stock (or Common Stock and/or
other securities, as the case may be) is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of such
Class A Preferred Stock or fractional shares of Junior Preferred Stock (or
Common Stock and/or other securities, as the case may be) represented thereby
on, and such certificate shall be dated, the date upon which the Rights
Certificate evidencing such Rights was duly surrendered and payment of the
Purchase Price (and all applicable transfer taxes) was made; provided, however,
that if the date upon such surrender and payment is a date upon which the Class
A Preferred Stock or Junior Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are closed, such
Person shall be deemed to have become the record holder of such shares
(fractional or otherwise) on, and such certificate shall be dated, the next
succeeding Business Day on which the Class A Preferred Stock or Junior Preferred
Stock (or Common Stock and/or other securities, as the case may be) transfer
books of the Company are open. Prior to the exercise of the Rights evidenced
thereby, the holder of a Rights Certificate shall not be entitled to any rights
of a stockholder of the Company with respect to shares for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. The Purchase Price, the number and kind of shares
covered by each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Class A
Preferred Stock payable in shares of Class A Preferred Stock, (B)
subdivide the outstanding Class A Preferred Stock, (C) combine
the outstanding Class A Preferred Stock into a smaller number of
shares or (D) issue any shares of its capital stock in a
reclassification of the Class A Preferred Stock (including any
such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a)
or in Section 7(e) of this Agreement, the Purchase Price in
effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Class A
Preferred Stock or capital stock, as the case may be, issuable on
such date, shall be proportionately adjusted so that the holder
of any Series A Right exercised after such time shall be entitled
to receive, upon payment of the Purchase Price then in effect,
the aggregate number and kind of shares of Class A Preferred
Stock or capital stock, as the case may be, which, if such Right
had been exercised immediately prior to such date and at a time
when the Class A Preferred Stock transfer books of the Company
were open, he would have owned upon such exercise and been
entitled to receive by virtue of such dividend, subdivision,
combination or reclassification. In the event, the Company shall
at any time after the date of this Agreement (I) declare a
dividend on the Junior Preferred Stock payable in shares of
Junior Preferred Stock, (II) subdivide the outstanding Junior
Preferred Stock, (III) combine the outstanding Junior Preferred
Stock into a smaller number of shares or (IV) issue any shares of
its capital stock in a reclassification of the Junior Preferred
Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), except as otherwise provided in this
Section 11(a) or in Section 7(e) of this Agreement, the Purchase
Price in effect at the time of the record date for such dividend
or of the effective date of such subdivision, combination or
reclassification, and the number and kind of shares of Junior
Preferred Stock or capital stock, as the case may be, issuable on
such date, shall be proportionately adjusted so that the holder
of any Series B Right exercised after such time shall be entitled
to receive, upon payment of the Purchase Price then in effect,
the aggregate number and kind of shares of Junior Preferred Stock
or capital stock, as the case may be, which, if such Right had
been exercised immediately prior to such date and at a time when
the Junior Preferred Stock transfer books of the Company were
open, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If any event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii)
of this Agreement, the adjustment provided for in this Section
11(a)(i) shall be made prior to, any adjustment required pursuant
to Section 11(a)(ii) of this Agreement.
(ii) In the event:
(A) any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, at any time after the date of this
Agreement, directly or indirectly, (1) shall merge into the
Company or otherwise consolidate with the Company, and the
Company shall be the continuing or surviving corporation of such
merger or combination and the capital stock of the Company shall
remain outstanding and unchanged, (2) shall, in one transaction
or a series of transactions, transfer any assets to the Company
or to any of its Subsidiaries in exchange (in whole or in part)
for shares of Common Stock, for shares of other equity securities
of the Company, or for securities exercisable for or convertible
into shares of equity securities of the Company (Common Stock or
otherwise), or otherwise obtain from the Company, with or without
consideration, any additional shares of such equity securities or
securities exercisable for or convertible into shares of such
equity securities (other than pursuant to a pro rata distribution
to all holders of a class of capital stock), (3) shall sell,
purchase, lease, exchange, mortgage, pledge, transfer or
otherwise acquire or dispose of, in one transaction or a series
of transactions, to, from or with (as the case may be) the
Company or any of its Subsidiaries, assets on term and conditions
less favorable to the Company than the Company would be able to
obtain in arm's-length negotiations with an unaffiliated third
party, other than pursuant to a transaction to which Section
13(a) applies, (4) shall sell, purchase, lease, exchange,
mortgage, pledge, transfer or otherwise acquire or dispose of, in
one transaction or a series of transactions, to, from or with (as
the case may be) the Company or any of its Subsidiaries (other
than incidental to the lines of business, if any engaged in as of
the date of this Agreement between the Company and such Acquiring
Person or Associate or Affiliate) assets having an aggregate fair
market value of more than 3% of the total assets of the Company,
other than pursuant to a transaction to which Section 13(a) of
this Agreement applies, (5) shall receive any compensation from
the Company or any of its Subsidiaries other than compensation
for full-time employment as a regular employee at rates in
accordance with the Company's (or its Subsidiaries') past
practices, or (6) shall receive the benefit, directly or
indirectly (except proportionately as a stockholder and except if
resulting from a requirement of law or governmental regulation),
of any loans, advances, guarantees, pledges or other financial
assistance or any tax credits or other tax advantage provided by
the Company or any of its Subsidiaries, or
(B) any Person shall, at any time after the Rights Dividend
Declaration Date, become an Acquiring Person, unless the event
causing such Person to become an Acquiring Person is (x) a
transaction to which Section 13(a) of this Agreement applies, (y)
an acquisition of shares of Stock pursuant to a tender offer or
an exchange offer for all outstanding shares of Stock at a price
and on terms determined by at least a majority of the members of
the Board of Directors, after receiving advice from one or more
nationally recognized investment banking firms, to be (a) at a
price which is fair to stockholders (taking into account all
factors which such members of the Board deem relevant including,
without limitation, prices which could reasonably be achieved if
the Company or its assets were sold on an orderly basis designed
to realize maximum value) and (b) otherwise in the best interests
of the Company and its stockholders, or (z) an acquisition of
shares of Stock pursuant to an all-cash tender offer for all
outstanding shares of Stock, as a result of which tender offer
such Person shall acquire beneficial ownership of shares of Stock
which, together with any shares of Stock held by such Person as
of the date of consummation of such tender offer, represent 85%
of the total voting power of all the outstanding securities of
the Company entitled to vote generally on matters presented to
the stockholders of the Company, or
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of the Company's securities
(including any reverse stock split), or recapitalization or
reorganization of the Company, or any merger or consolidation of
the Company with any of its Subsidiaries, or any other
transaction or series of transactions involving the Company or
any of its Subsidiaries, other than a transaction or transactions
to which the provisions of Section 13(a) apply (whether or not
with or into or otherwise involving an Acquiring Person) which
has the effect, directly or indirectly, of increasing by more
than 1% the proportionate share of the outstanding shares of any
class of equity securities of the Company or any of its
Subsidiaries which is directly or indirectly beneficially owned
by any Acquiring Person or any Associate or Affiliate of any
Acquiring Person, then, promptly following the first occurrence
of an event described in Section 11(a)(ii)(A), (B) or (C) in this
Agreement, proper provision shall be made so that (x) each holder
of a Series A Right (except as provided below and in Section 7(e)
in this Agreement) shall thereafter have the right to receive,
upon exercise thereof at the then current Purchase Price
attributable thereto in accordance with the terms of this
Agreement, in lieu of the number of shares of Class A Preferred
Stock that such Right was exercisable immediately prior to such
event, such number of shares of Class A Preferred Stock as shall
equal the result obtained by multiplying the then current
Purchase Price by the number of shares of Class A Preferred Stock
for which such Right was exercisable immediately prior to the
first occurrence of a Section 11(a)(ii) Event, and dividing that
product (which, following such first occurrence, shall thereafter
be referred to as the "Purchase Price" for such Right for all
purposes of this Agreement) by 50% of the current market price
(determined pursuant to Section 11(d) of this Agreement) per
share of Class A Preferred Stock on the date of such first
occurrence such number of shares being referred to as the
"Adjustment Shares" attributable to such right), and (y) each
holder of a Series B Right (except as provided below and in
Section 7(e) of this Agreement) shall thereafter have the right
to receive, upon exercise thereof at the then current Purchase
Price attributable thereto in accordance with the terms of this
Agreement, in lieu of a number of one one-hundredths of a share
of Junior Preferred Stock, such number of shares of Common Stock
of the Company as shall equal the result obtained by multiplying
the then current Purchase Price by the number of one
one-hundredths of a share of Junior Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence
of a Section 11(a)(ii) Event, and dividing that product (which,
following such first occurrence, shall thereafter be referred to
as the "Purchase Price" for such Right for all purposes of this
Agreement) by 50% of the current market price (determined
pursuant to Section 11(d) of this Agreement) per share of Common
Stock on the date of such first occurrence (such number of shares
being referred to herein as the "Adjustment Shares" attributable
to such Right).
(iii) In the event that, following the designation as Class
A Preferred Stock of any available unauthorized shares of "blank
check" or undesignated preferred stock in accordance with Section
9(a) in this Agreement, the number of shares of Class A Preferred
Stock which are authorized by the Company's Restated Certificate
of Incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Series A Rights are not
sufficient to permit the exercise in full of the Series A Rights
in accordance with Section 11(a)(ii), the Company shall: (A)
determine the excess of (1) the value of the Adjustment Shares
issuable upon the exercise of a Series A Right (the "Series A
Current Value") over (2) the Purchase Price attributable thereto
(such excess being referred to herein as the "Series A Spread"),
and (B), make adequate provision, with respect to each Series A
Right, to substitute for the applicable Adjustment Shares, upon
payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Class A Preferred Stock or
other equity securities of the Company (including, without
limitation, equity securities which the Board of Directors of the
Company has deemed to have substantially the same rights,
privileges, preferences and other terms as shares of Class A
Preferred Stock (such shares of equity securities being referred
to herein as "Class A Preferred Equivalents")), (4) debt
securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having an aggregate value equal to
the Series A Current Value, where such aggregate value has been
determined by the Board of Directors of the Company based upon
the advice of nationally recognized investment banking firm
selected by the Board of Directors of the Company; provided,
however, if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) of this sentence within
thirty (30) days following the later of (x) the first occurrence
of a Section 11(a)(ii) Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) expires
(the later of (x) and (y) being referred to herein as the
"Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, upon the surrender for exercise of a Series
A Right and without requiring payment of the Purchase Price,
shares of Class A Preferred Stock (to the extent available) and
then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Series A Spread. In the event that
the number of shares of Common Stock which are authorized by the
Company's Restated Certificate of Incorporation, but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Series B Rights are not sufficient to permit the
exercise in full of the Series B Rights, in accordance with the
foregoing subparagraph (ii) of this Section 11(a), the Company
shall: (A) determine the excess of (1) the value of the
Adjustment Shares issuable upon the exercise of a Series B Right
(the "Series B Current Value") over (2) the Purchase Price
attributable thereto (such excess being referred to herein as the
"Series B Spread"), and (B) with respect to each Series B Right,
make adequate provision to substitute for the applicable
Adjustment Shares, upon payment of the applicable Purchase Price,
(1) cash, (2) a reduction in the Purchase Price, (3) Common Stock
or other equity securities of the Company (including, without
limitation, shares, or units of shares, of preferred stock, such
as the Junior Preferred Stock, which the Board of Directors of
the Company has deemed to have substantially the same rights,
privileges, preferences and other terms as shares of Common Stock
(such shares of preferred stock being referred to herein as
"Common Stock Equivalents")), (4) debt securities of the Company,
(5) other assets, or (6) any combination of the foregoing, having
an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors of
the Company based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of the
Company (which may be the same firm utilized for the purposes of
the preceding sentence); provided, however, if the Company shall
not have made adequate provision to deliver value pursuant to
clause (B) of this sentence within thirty (30) days following the
Section 11(a)(ii) Trigger Date, then the Company shall be
obligated to deliver, upon the surrender for exercise of a Series
B Right and without requiring payment of the applicable Purchase
Price, shares of Common Stock (to the extent available) and then,
if necessary, cash, which shares and/or cash have an aggregate
value equal to the Series B Spread. In connection with the
foregoing, if the Board of Directors of the Company shall
determine in good faith that it is likely that sufficient
additional shares of Class A Preferred Stock, Class A Preferred
Equivalents, Common Stock or Common Stock Equivalents, as the
case may be, could be authorized for issuance upon exercise in
full of the appropriate Series of Rights, the thirty (30) day
period set forth above may be extended, to the extent necessary,
but not more than ninety (90) days after the Section 11(a)(ii)
Trigger Date, in order that the Company may seek stockholder
approval for the authorization of such additional shares (such
period, as it may be extended, being referred to herein as the
"Substitution Period"). To the extent that the Company determines
that some action need be taken pursuant to the first three
sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(a) of this Agreement, that such
action shall apply uniformly to the appropriate series of Rights,
and (y) may suspend the exercisability of the appropriate series
of Rights until the expiration of the Substitution Period in
order to seek any authorization of additional shares and/or to
decide the appropriate form of distribution to be made pursuant
to the first or second sentence of this Section 11(a)(iii) and to
determine the value thereof. In the event of any such suspension,
the Company shall issue a public announcement stating that the
exercisability of the appropriate series of the Rights has been
temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. For purposes of
this Section 11(a)(iii), the value of the Common Stock shall be
the current market price (as determined pursuant to Section 11(d)
of this Agreement) per share of the Common Stock on the Section
11(a)(ii) Trigger Date, the value of any Common Stock Equivalent
shall be deemed to be the same value as the Common Stock on such
date, multiplied by an appropriate multiple, the value of the
Class A Preferred Stock per share shall be the current market
price (as determined pursuant to Section 11(d) of this Agreement)
per share of Class A Preferred Stock on such date, and the value
of any Class A Preferred Equivalent shall be deemed to be the
same value as the Class A Preferred Stock on such date,
multiplied by an appropriate multiple.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Class A
Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within forty-five (45) calendar days after such
record date) Class A Preferred Stock (or shares of Class A
Preferred Equivalents) or securities convertible into Class A
Preferred Stock or Class A Preferred Equivalents at a price per
share of Class A Preferred Stock or Class A Preferred Equivalents
or per share equivalents of Class A Preferred Equivalents (or
having a conversion price per share or share equivalent, if a
security convertible into Class A Preferred Stock or Class A
Preferred Equivalents) less than the current market price (as
determined pursuant to Section 11(d) of this Agreement) per share
of Class A Preferred Stock on such record date, the Purchase
Price for each Series A Right to be in effect after such record
date shall be determined by multiplying the Purchase Price for a
Series A Right in effect immediately prior to such record date by
a fraction, the numerator of which shall be the number of shares
of Class A Preferred Stock outstanding on such record date, plus
the number of shares of Class A Preferred Stock which the
aggregate offering price of the total number of shares of Class A
Preferred Stock and/or Class A Preferred Equivalents so to be
offered (and/or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such
current market price, and the denominator of which shall be the
number of shares of Class A Preferred Stock outstanding on such
record date, plus the number of additional shares of Class A
Preferred Stock and/or share equivalents of Class A Preferred
Equivalents to be offered for subscription or purchase (or into
which the convertible securities so to be offered are initially
convertible). In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Junior
Preferred Stock entitling them to subscribe for or purchase (for
a period expiring within forty-five (45) calendar days after such
record date) Junior Preferred Stock (or shares having the same
rights, privileges and preferences as the shares of Junior
Preferred Stock ("Junior Equivalent Preferred Stock")) or
securities convertible into Junior Preferred Stock or Junior
Equivalent Preferred Stock at a price per share of Junior
Preferred Stock or per share equivalents of Junior Equivalent
Preferred Stock (or having a conversion price per share or share
equivalent, if a security convertible into Junior Preferred Stock
or Junior Equivalent Preferred Stock) less than the current
market price (as determined pursuant to Section 11(d) of this
Agreement) per share of Junior Preferred Stock on such record
date, the Purchase Price for each Series B Right to be in effect
after such record date shall be determined by multiplying the
Purchase Price for a Series B Right in effect immediately prior
to such record date by a fraction, the numerator of which shall
be the number of shares of Junior Preferred Stock outstanding on
such record date, plus the number of shares of Junior Preferred
Stock which the aggregate offering price of the total number of
shares of Junior Preferred Stock and/or Junior Equivalent
Preferred Stock so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered)
would purchase at such current market price, and the denominator
of which shall be the number of shares of Junior Preferred Stock
outstanding on such record date, plus the number of additional
shares of Junior Preferred Stock and/or share equivalents of
Junior Equivalent Preferred Stock to be offered for subscription
or purchase (or into which the convertible securities so to be
offered are initially convertible). In case any such subscription
price may be paid by delivery of consideration part or all of
which may be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board
of Directors of the Company, whose determination shall be
described in a statement filed with the Rights Agent and shall be
binding on the Rights Agent and the holders of the Rights. Shares
of Class A Preferred Stock or Junior Preferred Stock owned by or
held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such
adjustments shall be made successively whenever such a record
date is fixed, and in the event that such rights, options or
warrants are not so issued, the applicable Purchase Price for
each Series of Rights shall be adjusted to be the Purchase Price
which would then be in effect for such Series if such record date
had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Class A Preferred Stock (including
any such distribution made in connection with a consolidation or
merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular quarterly
cash dividend out of the earnings or retained earnings of the
Company), assets (other than a dividend payable in Class A
Preferred Stock, but including any dividend payable in stock
other than Class A Preferred Stock) or subscription rights or
warrants (excluding those referred to in Section 11(b) of this
Agreement), the Purchase Price for each Series A Right to be in
effect after such record date shall be determined by multiplying
the Purchase Price for a Series A Right in effect immediately
prior to such record date by a fraction, the numerator of which
shall be the current market price (as determined pursuant to
Section 11(d) of this Agreement) per share of Class A Preferred
Stock on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the cash, assets
or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to a share of Class A
Preferred Stock and the denominator of which shall be such
current market price (as determined pursuant to Section 11(d) of
this Agreement) per share of Class A Preferred Stock. Such
adjustments shall be made successively whenever such a record
date is fixed, and in the event that such distribution is not so
made, the Purchase Price for each Series A Right which would have
been in effect if such record date had not been fixed. In case
the Company shall fix a record date for a distribution to all
holders of Junior Preferred Stock (including any such
distribution made in connection with a consolidation or merger in
which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend
out of the earnings or retained earnings of the Company), assets
(other than a dividend payable in Junior Preferred Stock, but
including any dividend payable in stock other than Junior
Preferred Stock or subscription rights or warrants (excluding
those referred to in Section 11(b) of this Agreement), the
Purchase Price for each Series B Right in effect after such
record date shall be determined by multiplying the Purchase Price
for a Series B Right in effect immediately prior to such record
date by a fraction, the numerator of which shall be the current
market price (as determined pursuant to Section 11(d) of this
Agreement) per share of Junior Preferred Stock on such record
date, less the fair market value (as determined in good faith by
the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent) of the
portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable
to a share of Junior Preferred Stock, and the denominator of
which shall be such current market price (as determined pursuant
to Section 11(d) of this Agreement) per share of Junior Preferred
Stock. Such adjustments shall be made successively whenever such
a record date is fixed, and in the event that such distribution
is not so made, the Purchase Price for each Series B Right shall
be adjusted to be the Purchase Price for a Series B Right which
would have been in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder,
other than computations made pursuant to Section 11(a)(iii)
of this Agreement, the "current market price" per share of
Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of such Common Stock
for the thirty (30) consecutive Trading Days (as such term
is hereinafter defined) immediately prior to such date, and
for purposes of computations made pursuant to Section
11(a)(iii) of this Agreement, the "current market price" per
share of Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Common
Stock for the ten (10) consecutive Trading Days immediately
following such date. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the
principal consolidated transaction reporting system with
respect to securities listed on the principal national
securities exchange on which the shares of Common Stock are
listed or admitted to trading or, if the shares of Common
Stock are not listed or admitted to trading on any national
securities exchange, the last quoted price or if not so
quoted, the average of the high bid and low asked prices in
the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotation
System ("NASDAQ") or such other system then in use, or, if
on any such date the shares of Common Stock are not quoted
by any such organization, the average of the closing bid and
asked prices as furnished by a professional market maker
making a market in the Common Stock selected by the Board of
Directors of the Company, or, if on any such date no market
marker is making a market in the Common Stock, the fair
value of such shares on such date as determined in good
faith by the Board of Directors of the Company; provided,
however, that in the event that (x) a closing price is
included in the determination of current market price for
any day that is prior to (A) the ex-dividend date for a
dividend or distribution on such Common Stock payable in
shares of such Common Stock, securities convertible into
shares of such Common Stock (other than the Rights),
evidences of indebtedness, cash (other than a regular
quarterly dividend of the issuer), assets (including
dividends payable in securities, other than the Rights) or
subscription rights (other than the Rights) or warrants or
(B) the effective date for any subdivision, combination or
reclassification of such Common Stock, and (y) such
ex-dividend date or effective date occurs within the thirty
(30) Trading Day or ten (10) Trading Day period for the
determination of current market price, then, and in each
such case, the closing price on such day shall be
appropriately adjusted. The term "Trading Day" shall mean a
day on which the principal national securities exchange on
which the shares of Common Stock are listed or admitted to
trading is open for the transaction of business or, if the
shares of Common Stock are not listed or admitted to trading
on any national securities exchange, any day on which
trading takes place in the over-the-counter market and
prices reflecting such trading are reported by NASDAQ or
such other system then in use or, if the shares of Common
Stock are not quoted by any such organization, a Business
Day. If the Common Stock is not publicly held or not so
listed or traded, "current market price" per share shall
mean the fair value per share as determined in good faith by
the Board of Directors of the Company, whose determination
shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Class A Preferred Stock
shall be determined in the same manner as set forth above
for the Common Stock in clause (i) of this Section 11(d)
(other than the last sentence thereof). If the current
market price per share of Class A Preferred Stock cannot be
determined in the manner provided above, or if the Class A
Preferred Stock is not publicly held or listed or traded in
a manner described in clause (i) of this Section 11(d), the
"current market price" per share of Class A Preferred Stock
shall be conclusively deemed to be an amount equal to 1 (as
such number may be appropriately adjusted for such events as
stock splits, stock dividends and recapitalizations with
respect to the Common Stock or the Class A Preferred Stock
occurring after the date of this Agreement) multiplied by
the current market price per share of the Common Stock,
provided that if neither the Common Stock nor the Class A
Preferred Stock is publicly held or so listed or traded,
"current market price" per share of the Class A Preferred
Stock shall mean the fair value per share as determined in
good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes.
(iii) For the purpose of any computation hereunder, the
"current market price" per share of Junior Preferred Stock
shall be determined in the same manner as set forth above
for the Common Stock in clause (i) of this Section 11(d)
(other than the last sentence thereof). If the current
market price per share of Junior Preferred Stock cannot be
determined in the manner provided above or if the Junior
Preferred Stock is not publicly held or listed or traded in
a manner described in clause (i) of this Section 11(d), the
"current market price" per share of Junior Preferred Stock
shall be conclusively deemed to be an amount equal to 100
(as such number may be appropriately adjusted for such
events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock or the
Junior Preferred Stock occurring after the date of this
Agreement) multiplied by the current market price per share
of the Common Stock, provided that if neither the Common
Stock nor the Junior Preferred Stock is publicly held or so
listed or traded, "current market price" per share of the
Junior Preferred Stock is publicly held or so listed or
traded, "current market price" per share of the Junior
Preferred Stock shall mean the fair value per share as
determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be
conclusive for all purposes. For all purposes of this
Agreement, the "current market price" of one one-hundredth
of a share of Junior Preferred Stock shall be equal to the
current market price" of one share of Junior Preferred Stock
divided by 100.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price attributable to any Series of
Rights shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in such
Purchase Price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be
carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share
of Common Stock or Class A Preferred Stock or other share or
one-millionth of a share of Junior Preferred Stock, as the case
may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment, or (ii) the
Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) of this Agreement, the holder of any
Series A Right thereafter exercised shall become entitled to
receive any shares of capital stock other than Class A Preferred
Stock, thereafter the number of such other shares so receivable
upon exercise of any Series A Right and the Purchase Price
thereof shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Class A Preferred Stock contained
in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m)
and the provisions of Sections 7, 9, 10, 13 and 14 of this
Agreement with respect to the Class A Preferred Stock shall apply
on like terms to any such other shares. If as a result of an
adjustment made pursuant to Section 11(a)(ii) or Section 13(a) of
this Agreement, the holder of any Series B Right thereafter
exercised shall become entitled to receive any shares of capital
stock other than Junior Preferred Stock, thereafter the number of
such other shares so receivable upon exercise of any Series B
Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Junior Preferred Stock contained in Sections 11(a), (b), (c),
(e), (g), (h), (i), (j), (k) and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 of this Agreement with respect to
the Junior Preferred Stock shall apply on like terms to any such
other shares.
(g) All Series A Rights originally issued by the Company
subsequent to any adjustment made to the Purchase Price for a
Series A Right hereunder shall evidence the right to purchase, at
the adjusted Purchase Price, the number of shares of Class A
Preferred Stock purchasable from time to time hereunder upon
exercise of the Series A Rights, all subject to further
adjustment as provided herein. All Series B Rights originally
issued by the Company subsequent to any adjustment made to the
Purchase Price for a Series B Right hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of
one one-hundredths of a share of Junior Preferred Stock
purchasable from time to time hereunder upon exercise of the
Series B Rights, all subject to further adjustment as provided
herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase
Price attributable to the Series A Rights as a result of the
calculations made in Sections 11(b) and (c), each Series A Right
outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of shares of Class A Preferred Stock
(calculated to the nearest ten-thousandth) obtained by (i)
multiplying (x) the number of shares covered by a Series A Right
immediately prior to such adjustment, by (y) the Purchase Price
in effect immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase
Price. Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase
Price attributable to the Series B Rights as a result of the
calculations made in Sections 11(b) and (c), each Series B Right
outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a share of
Junior Preferred Stock (calculated to the nearest one-millionth)
obtained by (i) multiplying (x) the number of one one-hundredths
of a share covered by a Series B Right immediately prior to such
adjustment, by (y) the Purchase Price in effect immediately prior
to such adjustment, of the Purchase Price, and (ii) dividing the
product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price attributable to the Series A
Rights to adjust the number of Series A Rights, in lieu of any
adjustment in the number of shares of Class A Preferred Stock
purchasable upon the exercise of a Series A Right. Each of the
Series A Rights outstanding after the adjustment in the number of
Series A Rights shall be exercisable for the number of shares of
Class A Preferred Stock for which a Series A Right was
exercisable immediately prior to such adjustment. Each Series A
Right held of record prior to such adjustment of the number of
Series A Rights shall become that number of Series A Rights
(calculated to the nearest one ten-thousandth) obtained by
dividing the Purchase Price attributable to the Series A Rights
in effect immediately prior to adjustment of such Purchase Price
by the Purchase Price in effect immediately after such adjustment
of the Purchase Price. The Company may elect on or after the date
of any adjustment of the Purchase Price attributable to the
Series B Rights to adjust the number of Series B Rights, in lieu
of any adjustment in the number of one one-hundredths of a share
of Junior Preferred Stock purchasable upon the exercise of a
Series B Right. Each of the Series B Rights outstanding after the
adjustment in the number of Series B Rights shall be exercisable
for the number of one one-hundredths of a share of Junior
Preferred Stock for which a Series B Right was exercisable
immediately prior to such adjustment. Each Series B Right held of
record prior to such adjustment of the number of Series B Rights
shall become that number of Series B Rights (calculated to the
nearest one ten-thousandth) obtained by dividing the Purchase
Price attributable to the Series B Rights in effect immediately
prior to such adjustment of such Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase
Price. In each case, the Company shall make a public announcement
of its election to adjust the number of either Series of Rights,
indicating the record date for the adjustment, and, if known at
the time, the amount of the adjustment to be made. This record
date may be the date on which any Purchase Price is adjusted or
any day thereafter, but, if the Rights Certificates have been
issued, shall be at least ten (10) days later than the date of
the public announcement. If Rights Certificates have been issued,
upon each adjustment of the number of either Series of Rights
pursuant to this Section 11(i), the Company shall, as promptly as
practicable, cause to be distributed to holders of record of
Rights Certificates for such Series of Rights on such record date
Rights Certificates evidencing, subject to Section 14 of this
Agreement, the additional Rights to which such holders shall be
entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record
in substitution and replacement for the Rights Certificates held
by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights
Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights Certificates so
to be distributed shall be issued, executed and countersigned in
the manner provided for herein (and may bear, at the option of
the Company, the adjusted Purchase Price) and shall be registered
in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of shares of Class A Preferred Stock or the
number of one one-hundredths of a share of Junior Preferred Stock
issuable upon the exercise of Rights, the Rights Certificates
hereof and thereafter issued may continue to express the Purchase
Price per share of Class A Preferred Stock and the number of
shares of Class A Preferred Stock, or the Purchase Price per one
one-hundredth of a share of Junior Preferred Stock and the number
of one one-hundredths of a share of Junior Preferred Stock, which
were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then stated or par value,
if any, of the number of shares of Class A Preferred Stock or the
number of one one-hundredths of a share of Junior Preferred
Stock, issuable upon exercise of a Right, the Company shall take
any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue
such number of fully paid and nonassessable shares of Class A
Preferred Stock, or one one-hundredths of a share of Junior
Preferred Stock, at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price for any Series of Rights be
made effective as of a record date for a specified event, the
Company may elect to defer until the occurrence of such event the
issuance to the holder of any Right exercised after such record
date the number of shares of Class A Preferred Stock or the
number of one one-hundredths of a share of Junior Preferred Stock
and/or the other capital stock or securities of the Company, if
any, issuable upon exercise of such Series of Rights over and
above the number of shares of Class A Preferred Stock or the
number of one one-hundredths of a share of Junior Preferred Stock
and/or the other capital stock or securities of the Company, if
any, issuable upon such exercise on the basis of the Purchase
Price in effect prior to such adjustment; provided, however, that
the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive
such additional shares (fractional or otherwise) or securities
upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such
reductions in the Purchase Price for any Series of Rights, in
addition to those adjustments expressly required by this Section
11, as and to the extent that in their good faith judgment the
Board of Directors of the Company shall determine to be advisable
in order that any (i) consolidation or subdivision of the Class A
Preferred Stock or Junior Preferred Stock, (ii) issuance wholly
for cash of any shares of Class A Preferred Stock or Junior
Preferred Stock at less than the current market price, (iii)
issuance wholly for cash of shares of Class A Preferred Stock or
Junior Preferred Stock or securities which by their terms are
convertible into or exchangeable for shares of Class A Preferred
Stock or Junior Preferred Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Class
A Preferred Stock or Junior Preferred Stock, shall not be taxable
to such stockholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) of this Agreement),
(ii) merge with or into any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(o)
of this Agreement), or (iii) sell or transfer (or permit any
Subsidiary to sell or transfer), in one transaction, or a series
of related transactions, assets or earnings power aggregating
more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole) to any other Person or
Persons (other than the Company and/or any of its Subsidiaries in
one or more transactions each of which complies with Section
11(o) of this Agreement), if (x) at the time of or immediately
after such consolidation, merger or sale there are any rights,
warrants or other instruments or securities outstanding or
agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the
Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the stockholders of the
Person who constitutes, or would constitute, the "Principal
Party" for purposes of Section 13(a) of this Agreement shall have
received a distribution of Rights previously owned by such Person
or any of its Affiliates or Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23
or Section 26 of this Agreement, take (or permit any Subsidiary
of the Company to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) pay a dividend on the outstanding shares of
Class A Preferred Stock payable in shares of Class A Preferred
Stock, (ii) subdivide the outstanding shares of Class A Preferred
Stock, (iii) combine the outstanding shares of Class A Preferred
Stock into a smaller number of shares or (iv) issue any shares by
reclassification of its shares of Class A Preferred Stock, the
number of Series A Rights associated with each share of Class A
Preferred Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Series A Rights
thereafter associated with each share of Class A Preferred Stock
following the record or effective date for any such event shall
equal the result obtained by multiplying the number of Series A
Rights associated with each share of Class A Preferred Stock
immediately prior to such record date or effective date by a
fraction, the numerator of which shall be the total number of
shares of Class A Preferred Stock outstanding immediately prior
to such record date or effective date and the denominator of
which shall be the total number of shares of Class A Preferred
Stock outstanding immediately following such record date (giving
pro forma effect to the payment of the dividend) or such
effective date. Anything in this Agreement to the contrary
notwithstanding, in the event that the company shall at any time
after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) pay a dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding shares of Common Stock, (iii) combine the
outstanding shares of Common Stock into a smaller number of
shares or (iv) issue any shares by reclassification of its shares
of Common Stock, the number of Series B Rights associated with
each share of Common Stock then outstanding, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Series B Rights
thereafter associated with each share of Common Stock following
the record or effective date for any such event shall equal the
result obtained by multiplying the number of Series B Rights
associated with each share of Common Stock immediately prior to
such record date or effective date by a fraction, the numerator
of which shall be the total number of shares of Common Stock
outstanding immediately prior to such record date or effective
date, and the denominator of which shall be the total number of
shares of Common Stock outstanding immediately following such
record date (giving pro forma effect to the payment of the
dividend) or such effective date. The adjustments provided for in
this Section 11(p) shall be made successively whenever such a
dividend is declared or such a subdivision, combination or
reclassification is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Section 11 or Section 13
of this Agreement, the Company shall (a) promptly prepare a certificate setting
forth such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent, and with each transfer
agent for the Class A Preferred Stock, the Junior Preferred Stock and the Common
Stock, a copy of such certificate, and (c) mail a brief summary thereof to each
holder of a Rights Certificate (or, if prior to the Distribution Date, to each
holder of a certificate representing shares of Class A Preferred Stock or Common
Stock) in accordance with Section 25 of this Agreement. The Rights Agent shall
be fully protected in relying on any such certificate and on any adjustment
therein contained.
Section 13. Consolidation, Merger or Sale or Transfer of
Property, Assets or Earning Power.
(a) In the event that, on or following the Stock Acquisition
Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any other Person (other than a
Subsidiary of the Company in a transaction which complies with
Section 11(o) of this Agreement), and the Company shall not be
the continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the Company in
a transaction which complies with Section 11(o) of this
Agreement) shall consolidate with, or merge with or into, the
Company, and the Company shall be the continuing or surviving
corporation or such consolidation or merger and, in connection
with such consolidation or merger, all or part of the outstanding
shares of capital stock of the Company shall be changed
(including, without limitation, any conversion) into or exchanged
for stock or other securities of any other Person (or the
Company) or cash or any other property, or (z) the Company shall
directly or indirectly sell, lease, exchange, mortgage, pledge
(other than pledge in the ordinary course of the Company's
financing activities) or otherwise transfer or dispose of (or one
or more of its Subsidiaries shall sell or otherwise transfer), in
one transaction or a series of related transactions, property or
assets or earning power aggregating more than 50% of the property
assets or earning power of the Company and its Subsidiaries
(taken as a whole) to any Person or Persons (other than the
Company or any Subsidiary of the Company in one or more
transactions each of which complies with Section 11(o) of this
Agreement), then, and in each such case (except as may be
contemplated by Section 13(d) of this Agreement), proper
provision shall be made so that: (i) each holder of a Series A
Right, except as provided in Section 7(e) of this Agreement,
shall thereafter have the right to receive, upon the exercise
thereof at the then current Purchase Price in accordance with the
terms of this Agreement, such number of validly authorized and
issued, fully paid, nonassessable and freely tradeable shares of
Class A Preferred Stock of the Principal Party, not subject to
any liens, encumbrances, rights of first refusal or other adverse
claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of
shares of Class A Preferred Stock for which a Series A Right is
exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has occurred
prior to the first occurrence of a Section 13 Event, multiplying
the number of shares for which a Series A Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such
first occurrence), and dividing that product (which, following
the first occurrence of a Section 13 Event, shall be referred to
as the "Purchase Price" for each Series A Right for all purposes
of this Agreement) by (2) 50% of the current market price
(determined pursuant to Section 11(d) of this Agreement) per
share of the Class A Preferred Stock of such Principal Party on
the date of consummation of such Section 13 Event; (ii) each
holder of a Series B Right, except as provided in Section 7(e) of
this Agreement, shall thereafter have the right to receive, upon
the exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, such number of
validly authorized and issued, fully paid, nonassessable and
freely tradeable shares of Common Stock of the Principal Party,
not subject to any liens, encumbrances, rights of first refusal
or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number
of one one-hundredths of a share of Junior Preferred Stock for
which a Series B Right is exercisable immediately prior to the
first occurrence of a Section 13 Event (or, if a Section
11(a)(ii) Event has occurred prior to the first occurrence of a
Section 13 Event, multiplying the number of such one
one-hundredths of a share for which a Series B Right was
exercisable immediately prior to the first occurrence of a
Section 11(a)(ii) Event by the Purchase Price in effect
immediately prior to such first occurrence), and dividing that
product by (2) 50% of the current market price (determined
pursuant to Section 11(d) of this Agreement) per share of this
Common Stock of such Principal Party on the date of consummation
of such Section 13 Event; (iii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such
Section 13 Event, all the obligations and duties of the Company
pursuant to this Agreement; (iv) the term "Company" shall
thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 of this
Agreement shall apply only to such Principal Party following the
first occurrence of a Section 13 Event; (v) such Principal Party
shall take such steps (including, but not limited to, the
creation and reservation of an appropriate number of shares of
Class A Preferred Stock and reservation of a sufficient number of
shares of its Common Stock) in connection with the consummation
of any such transaction as may be necessary to assure that the
provisions of this Agreement shall thereafter be applicable, as
nearly as reasonably may be, in relation to its shares of Class A
Preferred Stock and Common Stock thereafter deliverable upon the
exercise of the Rights; and (vi) the provisions of Section
11(a)(ii) of this Agreement shall be of no effect following the
first occurrence of any Section 13 Event.
(b) The Company shall not consummate any such consolidation,
merger, sale or transfer (i) unless the Principal Party shall
have created and have available a sufficient number of shares of
Class A Preferred Stock, and shall have available a sufficient
number of authorized shares of its Common Stock, which in each
case have not been issued or reserved for issuance, to permit the
exercise in full of the Rights in accordance with this Section
13, and (ii) unless prior thereto the Company and such Principal
Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in
paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any consolidation,
merger or sale of assets mentioned in paragraph (a) of this
Section 13, the Principal Party
(i) will prepare and file a registration statement
under the Securities Act, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause
such registration statement to (A) become effective as soon
as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of
the Securities Act) until the Expiration Date; and
(ii) will deliver to holders of the Rights historical
financial statements for the Principal Party and each of its
Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that a Section 13 Event shall occur at any time
after the occurrence of a Section 11(a)(ii) Event, the Rights
which have not hereof been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
(c) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in Section 13(a) if (i) such transaction is consummated
with a Person or Persons who acquired shares of Stock pursuant to
(A) a tender offer or exchange offer for all outstanding shares
of Stock which complies with the provisions of Section
11(a)(ii)(B)(y) of this Agreement or (B) a tender offer for all
outstanding shares of Stock which complies with the provisions of
Section 11(a)(ii)(B)(z) of this Agreement (or, in each case, a
wholly owned Subsidiary of any such Person or Persons), (ii) the
price per share of each class of Stock offered in such
transaction is not less than the price per share paid to all
holders of shares of such class of Stock whose shares were
purchased pursuant to such tender offer or exchange offer and
(iii) the form of consideration being offered to the remaining
holders of shares of each class of Stock pursuant to such
transaction is the same as the form of consideration paid to the
holders of such class of Stock pursuant to such tender offer or
exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall
expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractional
rights, except prior to the Distribution Date, or to distribute
Rights Certificates which evidence fractional Rights. In lieu of
such fractional Rights, the Company may at its option pay to the
registered holders of the Rights Certificates with regard to
which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 14(a), the
current market value of a whole Right of either Series shall be
the closing price of the appropriate Series of Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The closing
price of either Series of Rights for any day shall be the last
sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange
on which such Rights are listed or admitted to trading, or if
such Rights are not listed or admitted to trading on any United
States national securities exchange, the last quoted sale price
or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or
such other system then in use; if on any such date such Rights
are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional
market maker making a market in such Rights selected by the Board
of Directors of the Company; if on any such date no such market
maker is making a market in such Rights, the fair value of such
Rights on such date as determined in good faith by the Board of
Directors of the Company.
(b) The Company shall not be required to issue fractions of
shares of Class A Preferred Stock or fractional shares of Junior
Preferred Stock (other than fractions which are integral
multiples of one one-hundredth of a share of Junior Preferred
Stock) upon exercise of the Rights or to distribute certificates
which evidence fractional shares of Class A Preferred Stock or
fractional shares of Junior Preferred Stock (other than fractions
which are integral multiples of one one-hundredth of a share of
Junior Preferred Stock). In lieu of fractional shares of Class A
Preferred Stock or fractional shares of Junior Preferred Stock
that are not integral multiples of one one-hundredth of a share
of Junior Preferred Stock, the Company may pay to the registered
holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same
fraction of the current market value a share of Class A Preferred
Stock or of one one-hundredth of a share of Junior Preferred
Stock, as the case may be. For purposes of this Section 14(b),
the current market value of a share of Class A Preferred Stock
shall be the closing price of a share of Class A Preferred Stock
(as determined pursuant to Section 11(d) of this Agreement) for
the Trading Day immediately prior to the date of such exercise,
and the current market value of one one-hundredth of a share of
Junior Preferred Stock shall be one one-hundredth of the closing
price of a share of Junior Preferred Stock (as determined
pursuant to Section 11(d) of this Agreement) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of shares of
Class A Preferred Stock or Common Stock upon exercise of the
Rights or to distribute certificates which evidence fractional
shares of Class A Preferred Stock or Common Stock. In lieu of
fractional shares of Class A Preferred Stock or Common Stock, the
Company may pay to the registered holders of Rights Certificates
at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market
value of one (1) share of Class A Preferred Stock or Common
Stock. For purposes of this Section 14(c), the current market
value of one share of Class A Preferred Stock or Common Stock
shall be the closing price of one share of Class A Preferred
Stock or Common Stock (as determined pursuant to Section 11(d) of
this Agreement) for the Trading Day immediately prior to the date
of such exercise.
(d) The holder of a Right, by the acceptance of the Rights,
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as
permitted by this Section 14.
Section 15. Rights of Action. All rights of action in respect of
this Agreement are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Stock); and any registered holder of any Rights Certificate (or, prior to the
Distribution Date, of the Stock), without the consent of the Rights Agent or of
the holder of any other Rights Certificate (or, prior to the Distribution Date,
of the Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company or any
Principal Party to enforce, or otherwise act in respect of, his rights pursuant
to this Agreement. Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders Concerning Transfer and
Ownership of Rights. Every holder of a Right by accepting the same consents and
agrees with the Company and the Rights Agent and with every other holder of a
Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Stock;
(b) after the Distribution Date, the Rights Certificates
will only be transferable on the registry books of the Rights
Agent if surrendered at the principal office or offices of the
Rights Agent designated for such purposes, duly endorsed or
accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) subject to Section 6(a) and Section 7(f) of this
Agreement, the Company and the Rights Agent may deem and treat
the Person in whose name a Rights Certificate (or, prior to the
Distribution Date, the associated Stock certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated Stock
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent, subject to the last sentence of Section 7(e) of
this Agreement, shall be required to be affected by any notice to
the contrary;
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of
its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, that the Company must use its
best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible; and
(e) notwithstanding anything in this Agreement to the
contrary, to the extent (i) any Excepted Person or member of an
Excepted Group shall be the holder of a Series A Right, (ii) a
Triggering Event shall have occurred and such Series A Right
shall have become exercisable hereunder for Class A Preferred
Stock or Class A Preferred Equivalents, and (iii) a majority of
the members of the Board of Directors who are not officers or
employees of the Company or any of its Subsidiaries and who are
not representatives, nominees, Affiliates or Associates of an
Acquiring Person shall have determined, after consultation with
legal counsel, that the exercise of such Series A Right for Class
A Preferred Stock would violate Rule 19c-4 of the General Rules
and Regulations under the Exchange Act, such Excepted Person or
member of an Excepted Group shall, immediately upon exercise of
such Series A Right, promptly convert the Class A Preferred Stock
or Class A Preferred Equivalents issued to him upon such exercise
to Common Stock in accordance with the terms of such Class A
Preferred Stock or Class A Preferred Equivalents; provided,
however, that no Excepted Person or member of an Excepted Group
shall be required hereunder to so convert any Class A Preferred
Stock or Class A Preferred Equivalent to the extent that (x) the
percentage of the total voting power of all outstanding voting
securities of the Company represented by the securities of the
Company beneficially owned by such Excepted Person or member of
an Excepted Group (after giving effect to such conversion) would
be less than (y) the percentage of the total voting power of all
voting securities of the Company outstanding as of immediately
prior to such Triggering Event represented by the securities of
the Company beneficially owned by such Excepted Person or member
of an Excepted Group as of immediately prior to such Triggering
Event.
Section 17. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or distributions or be deemed for any purpose the holder of the number
of shares of Class A Preferred Stock or the number of one one-hundredths of a
share of Junior Preferred Stock or any other securities, cash or other property
of the Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained in this Agreement or in any
Rights Certificate be construed to confer upon the holder of any Rights
Certificate, as such, any of the rights of a stockholder of the Company or
including, without limitation, any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to give
or withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 24 of this
Agreement), or to receive dividends, distributions or subscription rights, or
otherwise, until the Right or Rights evidenced by such Rights Certificate shall
have been exercised in accordance with the provisions of this Agreement.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and disbursements and other
disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties
hereunder.
(b) The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, or
expense, incurred without negligence, bad faith or willful
misconduct or breach of this Agreement on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in
connection with the acceptance and administration of this
Agreement, including the costs and expenses of defending against
any claim of liability in the premises. The Rights Agent agrees
to notify the Company of the written assertion of any claim
against the Rights Agent or of any action commenced against the
Rights Agent, with respect to which the Rights Agent intends to
seek indemnity under this Section 18(b), promptly after the
Rights Agent shall have received such written assertion of a
claim or shall have been served with the summons or other first
legal process giving information as to the nature and basis of
the claim. The Company will be entitled to participate at its own
expense in the defense, and, if the Company so elects at any time
after receipt of such notice, the Company may assume the defense,
of any suit brought to enforce any such claim. In the event that
the Company assumes the defense of any such suit, the Company
will not be liable for any counsel fees and expenses thereafter
incurred by the Rights Agent. The Company will not be liable for
any settlement of any such claim or action effected without its
written consent. This indemnification shall survive the
termination of this Agreement.
(c) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate
for Stock or for other securities of the Company, instrument of
assignment or transfer, power of attorney, endorsement,
affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document reasonably 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 20.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any
document or any further act on the part of any of the parties
hereto; provided, however, that such corporation would be
eligible for appointment as a successor Rights Agent under the
provisions of Section 21 of this Agreement. In case at the time
such successor Rights Agent shall succeed to the agency created
by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent
may adopt the countersignature of a predecessor Rights Agent and
deliver such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such
Rights Certificates either in the name of the predecessor or in
the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes
and agrees to perform the duties and obligations imposed by this Agreement upon
the following terms and conditions, by all of which the Company and the holders
of Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the
identity of any Acquiring Person (or any Affiliate or associate
of an Acquiring Person) and the determination of "current market
price") be proved or established by the Company prior to taking
or suffering any action hereunder, such fact or matter (unless
other evidence in respect thereof be specifically prescribed in
this Agreement) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman, any Vice
Chairman, the President, any Vice President thereunto duly
authorized, the Treasurer, any Assistant Treasurer, the Secretary
or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization to
the Rights Agent for any action taken or omitted by it in good
faith under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct or breach of this
Agreement by it or its attorneys or agents.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates or be required to verify
the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall
be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and
delivery of this Agreement (except the due execution and delivery
of this Agreement by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any
breach by the Company of any covenant or condition contained in
this Agreement or in any Rights Certificate; nor shall it be
responsible for any adjustment required under the provisions of
Section 11 or Section 13 of this Agreement or responsible for the
manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any
such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after actual notice of any such
adjustment); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or
reservation of any shares of Class A Preferred Stock, Common
Stock or Junior Preferred Stock to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares
of Class A Preferred Stock, Common Stock or Junior Preferred
Stock will, when so issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of its duties and obligations under this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from the Chairman, any Vice Chairman, the President,
any Vice President thereunto duly authorized, the Secretary, any
Assistant Secretary, the Treasurer or any Assistant Treasurer of
the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be
liable for any action taken or omitted to be taken by it in good
faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become
pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company
or otherwise act as fully and freely as though the Rights Agent
were not serving as such under this Agreement. Nothing in this
Agreement shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct; provided, however,
reasonable care was exercised in the selection and continued
employment of such attorneys or agents.
(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 hereunder if there
shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability
is not reasonably assured to the Rights Agent.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to
purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 and/or 2 thereof,
the Rights Agent shall not take any further action with respect
to such requested exercise or transfer without first consulting
with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Company, and to
each transfer agent of the Class A Preferred Stock, the Common Stock and the
Junior Preferred Stock, by registered or certified mail, and to the holders of
the Rights Certificates by first-class mail. The Company may remove the Rights
Agent or any successor Rights Agent upon not less than ten (10) days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Class A Preferred Stock, the Common Stock
and Junior Preferred Stock, by registered or certified mail, and to the holders
of the Rights Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. Notwithstanding any other provision of
this Agreement, in no event shall the resignation or removal of a Rights Agent
be effective until a successor Rights Agent shall have been appointed and have
accepted such appointment. If the Company shall fail to make such appointment
within a period of thirty (30) days after giving notice of such removal or after
it has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights Certificate
(who shall, with such notice, submit his Rights Certificate for inspection by
the Company), then any registered holder of any Rights Certificate may apply to
any court of competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or by such a court,
shall be (i) a corporation organized and doing business under the laws of the
United States or of any state of the United States, in good standing, which is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100,000,000 or (ii) an affiliate of a corporation described
in clause (i) of this sentence. After appointment, the successor Rights Agent
shall be vested with the same powers, rights, duties and responsibilities as if
it had been originally named as Rights Agent without further act or deed; but
the predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Stock and the Preferred Stock and mail a notice thereof in writing to the
registered holders of the Rights Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Purchase Price per share and the number or kind or class of
shares or other securities or property purchasable under the Rights Certificates
made in accordance with the provisions of this Agreement or which, in the
opinion of the Board of Directors, is otherwise necessary or appropriate to
reflect the occurrence of any of the events referred to in Section 11 or Section
13 of this Agreement. In addition, in connection with the issuance or sale of
shares of Stock following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to shares of Stock
so issued or sold pursuant to the exercise of stock options or under any
employee plan or arrangement, or upon the exercise, conversion or exchange of
securities, notes or debentures granted, awarded or issued prior to the
Distribution Date, and (b) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Rights Certificates
representing the appropriate number and Series of Rights in connection with such
issuance or sale; provided, however, that (i) no such Rights Certificate shall
be issued if, and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Rights Certificate would
be issued, and (ii) no such Rights Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the earlier of (i) the Close of
Business on the tenth day following the Stock Acquisition Date
(or, if the Stock Acquisition Date shall have occurred prior to
the Record Date, the Close of Business on the tenth day following
the Record Date), or (ii) the Expiration Date, redeem all but not
less than all the then outstanding Rights at a redemption price
of $.01 per Right, as such amount may be appropriately adjusted
to reflect any stock split, stock dividend or similar transaction
occurring after the date of this Agreement (such redemption price
being hereinafter referred to as the "Redemption Price").
Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first
occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired. The Company
may, at its option, pay the Redemption Price in cash, fractional
shares, shares of a Class A Preferred Stock (in the case of
Series A Rights), Common Stock (in the case of Series B Rights)
(in each case based on the "current market price," as defined in
Section 11(d) of this Agreement, of such shares at the time of
redemption) or any other form of consideration deemed appropriate
by the Board of Directors.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights, evidence of
which shall have been filed with the Rights Agent, and without
any further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for
each Right so held. Promptly after the action of the Board of
Directors ordering the redemption of the Rights, the Company
shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to
all such holders at each holder's last address as it appears upon
the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent
for the Stock. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be
made. In any case, failure to give such notice by mail, or any
defect in the notice, to any particular holder of Rights shall
not affect the sufficiency of the notice to other holders of
Rights. In the case of a redemption permitted under this Section
23, the Company may, at its option, discharge all of its
obligations with respect to the Rights by (i) issuing a press
release announcing the manner of redemption of the Rights and
(ii) mailing payment of the Redemption Price to the registered
holders of the Rights at their last addresses as they appear on
the registry books of the Rights Agent or, prior to the issuance
of the Rights Certificates, on the registry books of the transfer
agent for the Common Stock, and upon such action, all outstanding
Rights Certificates shall be null and void without any further
action by the Company. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase for
value any Rights at any time in any manner other than as
specifically set forth in this Section 23 and other than in
connection with the purchase of shares of Common Stock prior to
the earlier of the Distribution Date and the Expiration Date.
Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of
any class to the holders of Class A Preferred Stock or Junior
Preferred Stock or to make any other distribution to the holders
of Class A Preferred Stock or Junior Preferred Stock (other than
a regular quarterly cash dividend out of earnings or retained
earnings of the Company), or (ii) to offer to the holders of
Class A Preferred Stock or Junior Preferred Stock rights or
warrants to subscribe for or to purchase any additional shares of
Class A Preferred Stock or Junior Preferred Stock or shares of
stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Class A Preferred
Stock or Junior Preferred Stock (other than a reclassification
involving only the subdivision of outstanding shares of Class A
Preferred Stock or Junior Preferred Stock), or (iv) to effect any
consolidation or merger into or with any other Person (other than
a Subsidiary of the Company in a transaction which complies with
Section 11(o) of this Agreement), or to effect any sale, lease,
exchange or other transfer or disposition (or to permit one or
more of its Subsidiaries to effect any sale, lease, exchange or
other transfer or disposition), in one transaction or a series of
related transactions, of more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to
any other Person or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of which
complies with Section 11(o) of this Agreement), or (v) to effect
the liquidation, dissolution or winding up of the Company, then,
in each such case, the Company shall give to each holder of a
Rights Certificate, to the extent feasible and in accordance with
Section 25 of this Agreement, a notice of such proposed action,
which shall specify the record date for the purposes of such
stock dividend, distribution of rights or warrants, or the date
on which such reclassification, consolidation, merger, sale,
lease, exchange, transfer, disposition, liquidation, dissolution
or winding up is to take place and the date of participation
therein by the holders of the shares of Class A Preferred Stock
or Junior Preferred Stock, if any such date is to be fixed, and
such notice shall be so given in the case of any action covered
by clause (i) or (ii) above at least twenty (20) days prior to
the record date for determining holders of the shares of Class A
Preferred Stock or Junior Preferred Stock for purposes of such
action, and in the case of any such other action, at least twenty
(20) days prior to the date of participation therein by the
holders of the shares of Class A Preferred Stock or Junior
Preferred Stock, whichever shall be the earlier;
(b) In case any of the events set forth in Section 11(a)(ii)
or Section 13(a) of this Agreement shall occur, then, in any such
case, (i) the Company shall as soon as practicable thereafter
give to each holder of a Rights Certificate, to the extent
feasible and in accordance with Section 23 of this Agreement, a
notice of the occurrence of such event, which shall specify the
event and the consequences of the event to holders of Rights
under Section 11(a)(ii) or Section 13 of this Agreement, and (ii)
all references in the preceding paragraph to Junior Preferred
Stock shall be deemed thereafter to refer to Common Stock and/or,
if appropriate, other securities.
The failure to give notice as required by this Section 24 or any
defect therein shall not affect the legality or validity of the action taken by
the Company or the vote upon any such action. Section 25. Notices. Notices or
demands authorized by this Agreement to be given or made by the Rights Agent or
by the holder of any Rights Certificate to or on the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address if filed in writing with the Rights Agent) as
follows or delivered in person to the following address:
MAXXAM Inc.
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the Company or by
the holder of any Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the
Company) as follows or delivered in person to the following address:
American Stock Transfer & Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxxxx
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Rights Certificate
(or, if prior to the Distribution Date, to the holder of certificates
representing shares of Stock) shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed to such holder at
the address of such holder as shown on the registry books of the
Company or delivered in person to such address.
Section 26. Supplements and Amendments. Prior to the Distribution
Date, the Company and the Rights Agent shall, if the Company so directs,
supplement or amend any provision of this Agreement without the approval of any
holders of certificates representing shares of Stock, and without any further
action and without notice, such amendment or supplement should be deemed
effective. From and after the Distribution Date the Company may, and the Rights
Agent shall if the Company so directs, supplement or amend this Agreement
without the approval of any holder of Rights certificates in order (i) to cure
any ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provision contained
herein, (iii) to extend the Expiration Date or any other time period hereunder,
or (iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person); provided, this Agreement may not
be supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable, or (B) any other time period, unless
such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of, and/or the benefits to, the holders of Rights. Without limiting the
foregoing, the Company and the Rights Agent shall, if the Company so directs,
amend this Agreement to lower the thresholds set forth in Sections 1(a) and 3(a)
to not less than 10%; provided, however, that if any Person, at the time the
threshold with respect to the determination of a Person's becoming an Acquiring
Person is so lowered, beneficially owns shares of Common Stock in excess of such
lowered threshold and was not an Acquiring Person immediately prior to such
time, such Person shall not become an Acquiring Person by virtue of such
threshold having been lowered unless and until such Person shall thereafter
become, alone or together with its Affiliates and Associates, the Beneficial
Owner of any additional shares of Common Stock (other than (x) through the
exercise of any presently outstanding options, or the issuance hereafter by the
Company of any options, stock appreciation rights or other securities
convertible into or exercisable for stock (or the exercise of any such options,
rights or other securities), (y) as a result of a dividend by the Company
payable in stock or securities convertible into or exercisable for stock, or (z)
by reason of the acquisition by such Person of beneficial ownership of an
aggregate of no more than 10,000 shares of Common Stock (such number to be
appropriately adjusted to reflect stock dividends, splits, reclassifications and
combinations from and after the date of this Agreement) in any single calendar
year; provided, that none of such shares are owned directly by such Person or
nominees for such Person. Promptly following the adoption of any amendment or
supplement pursuant to this Section 26, an appropriate officer of the Company
shall deliver to the Rights Agent a copy of resolutions of the Company adopting
such amendment or supplement. Upon such delivery, the amendment or supplement
shall be administered by the Rights Agent as part of this Agreement in
accordance with the terms of this Agreement, as so amended or supplemented.
Prior to the Distribution Date, the interests of the holders of Rights shall be
deemed coincident with the interests of the holders of Stock.
Section 27. 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.
Section 28. Determinations and Actions by the Board of Directors,
etc. For all purposes of this Agreement, any calculation of the number of shares
of Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(1)(i) of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement. 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 of Directors of the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend or supplement the Agreement). All such actions,
calculations, interpretations and determinations (including, for purposes of
clause (y) below, all omissions with respect to the foregoing) which are done or
made by the Board of Directors of the Company in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other Persons, and (y) not subject the Board of Directors of the
Company to any liability to the holders of the Rights.
Section 29. Exchange.
(a) Subject to paragraph (c) of this Section 29, the Board
of Directors of the Company may, at its option, at any time after
any Person becomes an Acquiring Person, exchange all but not less
than all the then outstanding and exercisable Rights (which shall
not include Rights that have become void pursuant to the
provisions of Section 7(e) of this Agreement) for (i) in the case
of Series A Rights, for Class A Preferred Stock at an exchange
ratio of one share of Class A Preferred Stock per Series A Right,
and (ii) in the case of Series B Rights, for Common Stock at an
exchange ratio of one share of Common Stock per Series B Right,
in each case as appropriately adjusted to reflect any stock
splits, stock dividends or similar transactions occurring after
the date of this Agreement (such exchange being hereinafter
referred to as the "Exchange" and such exchange ratios being
hereinafter referred to as the "Exchange Ratios").
(b) Immediately upon the action of the Board of Directors of
the Company authorizing the Exchange and without any further
action and without any notice, the right to exercise the Rights
will terminate and the only right thereafter of the holders of
Rights included in the Exchange shall be to receive that number
of shares of Class A Preferred Stock or Common Stock, as the case
may be, equal to the number of Rights held by such holder
multiplied by the appropriate Exchange Ratio. The Company shall
promptly give public notice of the Exchange; provided, however,
that the failure to give notice or any defect in such notice
shall not affect the validity of the Exchange. Within 10 days
after such action of the Board of Directors ordering the
Exchange, the Company shall mail a notice to the Rights Agent and
the holders of such Rights at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given
whether or not the holder receives the notice. Each such notice
of Exchange will state the method by which the Exchange will be
effected.
(c) In the event that the number of shares of Class A
Preferred Stock or shares of Common Stock which are authorized by
the Company's Restated Certificate of Incorporation but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the Exchange,
or if the Board of Directors of the Company so elects in its
discretion, the Exchange Ratio as to the Series A Rights shall
instead equal one Class A Preferred Equivalent per Series A
Right, and/or the Exchange Ratio as to the Series B Rights shall
instead equal one Common Stock Equivalent per Series B Rights.
(d) The Company shall not be required to issue fractions of
shares of Class A Preferred Stock or fractions of shares of
Common Stock or to distribute certificates which evidence such
fractional shares. In lieu of such fractional shares, there may
be paid to the registered holders of the Rights Certificates with
regard to which such fractional shares would otherwise be
issuable, an amount in cash equal to the same fraction of the
current market value of one share of Class A Preferred Stock or
one share of Common Stock, as the case may be. For the purposes
of this paragraph (d), the current market value of one share of
Class A Preferred Stock shall be the closing price of a share of
Class A Preferred Stock (as determined pursuant to Section 11(d)
of this Agreement) for the Trading Day immediately prior to the
Exchange Date, and the current market value of the share of
Common Stock shall be the closing price of a share of Common
Stock (as determined pursuant to Section 11(d) of this Agreement)
for the Trading Day immediately prior to the Exchange Date.
Section 30. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Stock) any legal or equitable
right, remedy or claim under this Agreement; but this Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Stock).
Section 31. Severability. If any term, provision, covenant, or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 of
this Agreement shall be reinstated and shall not expire until the Close of
Business on the tenth Business Day following the date of such determination by
the Board of Directors. The Company and the Rights Agent may amend this
Agreement to modify, revise or delete such term, provision, covenant or
restriction to the extent necessary to comply with such law as so changed.
Section 32. Governing Law. This Agreement, each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the laws of such State applicable to contracts made
and to be performed entirely within such State.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. References. Unless the context otherwise clearly
requires, the terms "of this Agreement," "hereunder," "herein" and the like
refer to this entire Agreement and not to any particular Section.
Section 35. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions of
this Agreement.
Section 36. Grammatical Construction. Throughout this Agreement,
where such meanings would be appropriate, (a) any pronouns used herein shall
include the corresponding masculine, feminine or neuter forms (e.g., references
to "he" shall also include "she" and "it" and references to "who" and "whom"
shall also include "which"), (b) the plural form of nouns and pronouns shall
include the singular and vice-versa, (c) reference to a Section means a Section
of this Agreement, and (d) the word "including" means "including, without
limitation," whether expressly stated or not.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed, and their respective corporate seals thereto affixed and
attested, as of the day and year first above written.
MAXXAM INC.
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Secretary
American Stock Transfer & Trust Company
as Rights Agent
By: /s/ Xxxxxxx X. Xxxxxx
Name: Xxxxxxx X. Xxxxxx
Title: Vice President
