EXHIBIT 4.1
WYNDHAM INTERNATIONAL, INC.
and
AMERICAN STOCK TRANSFER AND TRUST COMPANY
Rights Agent
SHAREHOLDER RIGHTS AGREEMENT
Dated as of June 29, 1999
TABLE OF CONTENTS
Section 1. Certain Definitions.............................................1
Section 2. Appointment of Rights Agent.....................................9
Section 3. Issuance of Rights..............................................9
Section 4. Form of Rights Certificates....................................12
Section 5. Countersignature and Registration..............................13
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates...................................................14
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights..15
Section 8. Cancellation and Destruction of Rights Certificates............17
Section 9. Reservation and Availability of Capital Stock..................18
Section 10. Preferred Stock Record Date....................................20
Section 11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights. ...................................20
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.....30
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power...............................................31
Section 14. Fractional Rights and Fractional Shares........................34
Section 15. Rights of Action...............................................36
Section 16. Agreement of Rights Holders....................................37
Section 17. Rights Certificate Holder Not Deemed a Shareholder.............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............................43
Section 23. Redemption and Termination.....................................43
Section 24. Exchange ......................................................44
Section 25. Notice of Certain Events.......................................47
Section 26. Notices........................................................48
Section 27. Supplements and Amendments.....................................49
Section 28. Successors.....................................................50
Section 29. Determinations and Actions by the Board, etc...................50
Section 30. Benefits of this Agreement.....................................50
Section 31. Severability...................................................50
Section 32. Governing Law..................................................51
Section 33. Counterparts...................................................51
Section 34. Descriptive Headings...........................................51
i
Exhibit A Form of Certificate of Designation, Rights and Preferences.....A-1
Exhibit B Form of Rights Certificate.....................................B-1
ii
SHAREHOLDER RIGHTS AGREEMENT
SHAREHOLDER RIGHTS AGREEMENT (this "Agreement"), dated as of
June 29, 1999, between Wyndham International, Inc., a Delaware corporation (the
"COMPANY"), and American Stock Transfer and Trust Company, a New York
corporation (the "RIGHTS AGENT").
W I T N E S S E T H
WHEREAS, the Board of Directors of the Company (the "BOARD")
has determined it is desirable and in the best interests of the Company and its
shareholders for the Company to adopt a shareholder rights plan (the "RIGHTS
PLAN") and to implement the Rights Plan by executing this Agreement;
WHEREAS, on June 28, 1999, the Board authorized the issuance
and the distribution of: (i) one Right (as such number may hereafter be adjusted
pursuant to the provisions of Section 11(i) hereof) for, and deemed such Right
attached to, each share of Common Stock (as hereinafter defined) of the Company
outstanding at the Close of Business on July 9, 1999 (the "Record Date") and
(ii) a number of Rights equal to the Conversion Number (as hereinafter defined)
(as such number may hereafter be adjusted pursuant to the provisions of Section
11(i) hereof) for, and deemed such Rights attached to, each share of the
Convertible Preferred Stock outstanding at the Record Date, each Right initially
representing the right to purchase one one-thousandth of a share of Preferred
Stock (as hereinafter defined) having the rights, powers and preferences set
forth in the Certificate of Designation, Rights and Preferences, attached hereto
as Exhibit A, upon the terms and subject to the conditions hereinafter set forth
(each, a "RIGHT");
NOW, THEREFORE, in consideration of the premises and the
mutual agreements set forth herein, 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" shall mean any Person who or which,
together with all Associates and Affiliates of such Person, shall be the
Beneficial Owner of 10% or more of the shares of Common Stock of the Company
then outstanding, but shall not include an Exempt Person or a Grandfathered
Person. Notwithstanding the foregoing, any Person who, within 10 Business Days
of being requested by the Company to advise it regarding the same, certifies to
the Company
that such Person acquired shares of Common Stock in excess of 9.9% inadvertently
or without knowledge of the terms of the Rights and who, together with all
Affiliates and Associates, thereafter does not acquire additional shares of
Common Stock while the Beneficial Owner of 10% or more of the shares of Common
Stock then outstanding shall not become an Acquiring Person; PROVIDED, HOWEVER,
that if the Person requested to so certify fails to do so or fails to divest a
sufficient number of shares of the Common Stock of the Company so that such
Person shall be the Beneficial Owner of less than 10% of the shares of Common
Stock of the Company then outstanding within such 10 Business Day period, then
such Person shall be an Acquiring Person immediately after such 10 Business Day
period.
(b) "ACT" shall mean the Securities Act of 1933, as amended.
(c) "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act .
(d) "AGREEMENT" shall mean this Rights Agreement as
originally executed or as it may from time to time be supplemented, amended,
renewed, restated or extended pursuant to the applicable provisions hereof.
(e) 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 of such
Person's Associates or Affiliates, directly or indirectly, owns or has
the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants, options or
otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own" or have "Beneficial
Ownership" of,(A) securities tendered pursuant to a tender or exchange
offer made by or on behalf of such Person or any of such Person's
Associates or Affiliates until such tendered securities are accepted
for purchase or exchange, (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering Event or (C)
securities issuable upon exercise of Rights from and after the
occurrence of a Triggering Event which Rights are Original Rights or
securities issued pursuant to Section 11(i) hereof in
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connection with an adjustment made with respect to any Original
Rights;
(ii) which such Person or any of such
Person's Associates or Affiliates, directly or indirectly, has the
right to vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and Regulations
under the Exchange Act), including pursuant to any agreement,
arrangement or understanding, whether or not in writing; PROVIDED,
HOWEVER, that a Person shall not be deemed the "Beneficial Owner" of,
or to "beneficially own," or have "Beneficial Ownership" of, any
security under this subparagraph (ii) as a result of an agreement,
arrangement or understanding (whether or not in writing) to vote such
security if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy or consent 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
statement); or
(iii) which are beneficially owned, directly
or indirectly, by any other Person (or any Associate or Affiliate
thereof) with which such Person (or any of such Person's Associates or
Affiliates) 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 clause (A) of the proviso
to subparagraph (ii) of this paragraph (f)) or disposing of any voting
securities of the Company;
PROVIDED, HOWEVER, that (i) no Person engaged in business as an underwriter of
securities shall be deemed to be the "Beneficial Owner" of, or be deemed to
"beneficially own," or have "Beneficial Ownership" of, any securities acquired,
or which that Person has the right to acquire, through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of 40 days after the date of such acquisition and (ii) no Person who
is a director or an officer of the Company shall be deemed to be, solely as a
result of his or her position as a director or officer of the Company, the
Beneficial Owner of any securities of the Company that are owned beneficially by
any other director or officer of the Company. Notwithstanding anything in this
Section 1(e) to the contrary, the phrase "then
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outstanding," when used with reference to the percentage of the then outstanding
shares of Common Stock of the Company beneficially owned by a Person, shall mean
the number of securities then issued and outstanding together with the number of
such securities not then actually issued and outstanding which such Person would
be deemed to beneficially own hereunder.
(f) "BOARD" shall have the meaning set forth in the first
"WHEREAS" clause at the beginning of this Agreement.
(g) "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or day on which banking institutions in the City of New York are
authorized or obligated by law or executive order to close.
(h) "CHANGE IN CONTROL" shall mean the acquisition by any
individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act), other than the Company, any of its Subsidiaries or any of
the Grandfathered Persons, of Beneficial Ownership of 35% or more of the
combined voting power or economic interests of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors.
(i) "CLASS A AND C DIRECTOR MAJORITY" shall mean the
majority of Class A Directors and Class C Directors (as each such term is
defined in the Restated Certificate of Incorporation of the Company filed with
the Secretary of State of the State of Delaware on the date hereof, as it may be
amended from time to time).
(j) "CLASS A COMMON STOCK" shall mean the Class A Common
Stock, par value $0.01 per share, of the Company, and any other shares of
capital stock of the Company into which such stock shall be reclassified or
changed.
(k) "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.
(l) "COMMON STOCK" shall mean the Class A Common Stock, par
value $0.01 per share, of the Company, the Class B Common Stock, par value $0.01
per share, of the Company, and any other shares of capital stock of the Company
into which such stock shall be reclassified or changed. "Common Stock" when used
with reference to any Person other than the Company organized in corporate form
shall mean (i) the capital stock or other equity interest in such Person with
the greatest voting power, (ii) the equity securities or other equity interest
having power to
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control or direct the management of such Person or (iii) if such Person is a
Subsidiary of another Person, the capital stock, equity securities of, or other
equity interest in, the Person or Persons which ultimately control such
first-mentioned Person and which has issued any such outstanding capital stock,
equity securities or equity interest. "Common Stock" when used with reference to
any Person not organized in corporate form shall mean units of beneficial
interest which (x) represent the right to participate generally in the profits
and losses of such Person (including without limitation any flow-through tax
benefits resulting from an ownership interest in such Person) and (y) are
entitled to exercise the greatest voting power of such Person or, in the case of
a limited partnership, have the power to remove the general partner or partners.
(m) "COMMON STOCK EQUIVALENTS" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(n) "COMPANY" shall have the meaning set forth in the first
paragraph of this Agreement until a successor corporation or entity shall have
become such or until a Principal Party shall assume, and thereafter be liable
for, all obligations and duties of the Company hereunder pursuant to the
applicable provisions of this Agreement, and thereafter, "Company" shall mean
such successor or Principal Party, respectively.
(o) "CONVERSION NUMBER" shall mean such number of shares of
Common Stock of the Company as from time to time would be issuable upon the
conversion by the holder of one share of Convertible Preferred Stock.
(p) "CONVERTIBLE PREFERRED STOCK" shall mean Series A
Convertible Preferred Stock of the Company and Series B Convertible Preferred
Stock of the Company.
(q) "CURRENT MARKET PRICE" shall have the meaning set forth
in Section 11(d) hereof.
(r) "CURRENT VALUE" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(s) "DIRECTOR" shall mean a member of the Board.
(t) "DISTRIBUTION DATE" shall have the meaning set forth in
Section 3(a) hereof.
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(u) "EQUIVALENT PREFERENCE STOCK" shall have the meaning set
forth in Section 11(b) hereof.
(v) "EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended and in effect on the date of this Agreement.
(w) "EXEMPT PERSON" shall mean (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan or employee stock
plan of the Company or of any Subsidiary of the Company, (iv) any Person or
entity organized, appointed, established or holding Common Stock of the Company
by, for or pursuant to the terms of any employee benefit plan or employee stock
plan, or (v) a Person who, together with its Associates and Affiliates, becomes
the Beneficial Owner of 10% or more of the shares of Common Stock of the Company
then outstanding solely as a result of a reduction in the number of shares of
Common Stock of the Company outstanding due to the repurchase of shares of
Common Stock of the Company by the Company, unless and until such time as such
Person shall purchase or otherwise become (as a result of actions taken by such
Person or its Associates or Affiliates) the Beneficial Owner of additional
shares of Common Stock of the Company constituting 1% or more of the then
outstanding shares of Common Stock of the Company.
(x) "EXPIRATION DATE" shall have the meaning set forth in
Section 7(a) hereof.
(y) "FINAL EXPIRATION DATE" shall mean the Close of Business
on June 30, 2008.
(z) "GRANDFATHERED PERSON" shall mean each of the Investors
and their "Permitted Assignees" and "Permitted Third Party Transferees" under
Section 1.1(b) of the Purchase Agreement, and all of their successors by
operation of law; PROVIDED, HOWEVER, that an Investor shall no longer be a
"Grandfathered Person" when and if (i) such Investor no longer complies with the
provisions of Section 7.1 of the Purchase Agreement or (ii) there is no Series B
Convertible Preferred Stock outstanding and all of the Investors collectively
beneficially own less than 10% of the then outstanding shares of Common Stock.
(aa) "INVESTORS" shall mean Apollo Real Estate Investment
Fund III, L.P., Apollo Investment Fund IV, L.P., Xxxxxx X. Xxx Equity Fund IV,
L.P., Xxxxxx X. Xxx Foreign Fund IV, L.P., Xxxxxx X. Xxx Charitable Investment
L.P.,
6
THL-CCI Limited Partnership, Beacon Private Equity, Inc., Beacon Capital
Partners, L.P. and Strategic Real Estate Investments I, L.L.C.
(bb) "ORIGINAL RIGHTS" shall mean Rights acquired by a Person
or such Person's Associates or Affiliates prior to the Distribution Date or
issued pursuant to Section 3(a) or Section 22 hereof.
(cc) "PERSON" shall mean any individual, firm, corporation,
partnership, trust or other entity and includes without limitation an
unincorporated group of persons who, by formal or informal agreement or
arrangement (whether or not in writing), have embarked on a common purpose or
act, including, without limitation, a "group" as that term is used for purposes
of Section 13(d)(3) of the Exchange Act.
(dd) "PREFERRED STOCK" shall mean shares of Series C
Participating Preferred Stock, par value $.01 per share, of the Company.
(ee) "PRINCIPAL PARTY" shall have the meaning set forth in
Section 13(b) hereof.
(ff) "PURCHASE AGREEMENT" shall mean the Securities Purchase
Agreement, dated as of February 18, 1999, as amended on June 28, 1999, by and
among the Company, Patriot American Hospitality, Inc., Wyndham International
Operating Partnership, L.P., Patriot American Hospitality Partnership, L.P. and
and each of the Investors party thereto.
(gg) "PURCHASE PRICE" shall have the meaning set forth in
Section 4(a) hereof.
(hh) "RECORD DATE" shall have the meaning set forth in the
second "WHEREAS" clause at the beginning of this Agreement.
(ii) "REDEMPTION PRICE" shall have the meaning set forth in
Section 23(a) hereof.
(jj) "RIGHTS" shall have the meaning set forth in the second
"WHEREAS" clause at the beginning of this Agreement.
(kk) "RIGHTS AGENT" shall mean the Person named as the
"Rights Agent" in the first paragraph of this Agreement until a successor Rights
Agent shall
7
have become such pursuant to the applicable provisions hereof, and thereafter
"Rights Agent" shall mean such successor Rights Agent. If at any time there is
more than one Person appointed by the Company as Rights Agent pursuant to the
applicable provisions of this Agreement, "Rights Agent" shall mean and include
each such Person.
(ll) "RIGHTS CERTIFICATE" shall have the meaning set forth in
Section 3(a) hereof.
(mm) "RIGHTS PLAN" shall have the meaning set forth in the
first "WHEREAS" clause hereof.
(nn) "SECTION 11(a)(ii) EVENT" shall have the meaning set
forth in Section 11(a)(ii) hereof.
(oo) "SECTION 11(a)(ii) TRIGGER DATE" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(pp) "SECTION 13 EVENT" shall have the meaning set forth in
Section 13(a) hereof.
(qq) "SECTION 24(a)(i) EXCHANGE RATIO" shall have the meaning
set forth in Section 24(a)(i) hereof.
(rr) "SECTION 24(a)(ii) EXCHANGE RATIO" shall have the
meaning set forth in Section 24(a)(ii) hereof.
(ss) "SPREAD" shall have the meaning set forth in Section
11(a)(iii) hereof.
(tt) "STOCK ACQUISITION DATE" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed or amended pursuant to Section 13(d) under
the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person
has become such.
(uu) "SUBSIDIARY" shall mean, with reference to any Person,
any corporation or other entity of which securities or other ownership interest
having ordinary voting power sufficient, in the absence of contingencies, to
elect a majority of the board of directors or other persons performing similar
functions of such
8
corporation or other entity are at the time directly or indirectly beneficially
owned or otherwise controlled by such Person and any Associate or Affiliate of
such Person.
(vv) "SUBSTITUTION PERIOD" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(ww) "TRADING DAY" shall have the meaning set forth in
Section 11(d) hereof.
(xx) "TRIGGERING EVENT" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company has
appointed the Rights Agent to act as agent for the Company and the holders of
the Rights (who shall also be the holders of all shares of Common Stock of the
Company outstanding at the Record Date and all shares of Convertible Preferred
Stock outstanding at the Record Date) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable, upon ten days' prior written notice to the Rights Agent.
The Rights Agent shall have no duty to supervise, and in no event shall be
liable for, the acts or omissions of any such Co-Rights Agent. In the event that
the Company appoints one or more Co-Rights Agents, the respective duties of the
Rights Agent and any Co-Rights Agents shall be as the Company shall determine
and any actions which may be taken by the Rights Agent pursuant to the terms of
this Agreement may be taken by any such Co-Rights Agent.
Section 3. ISSUANCE OF RIGHTS.
(a) Until the earlier of (i) the Close of Business on the
tenth Business Day (or such specified or unspecified later date as may be
determined by the Board before the occurrence of a Distribution Date) after the
Stock Acquisition Date or (ii) the Close of Business on the tenth Business Day
(or such later date as the Board shall determine) after the date that a tender
or exchange offer by any Person (other than a tender or exchange offer by an
Exempt Person or a tender or exchange offer by a Grandfathered Person that
complies with Section 7.1 of the Purchase Agreement) is first published or sent
or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act if upon consummation thereof such Person
would become the Beneficial Owner of 10% or more of the shares of Common Stock
then outstanding (the earlier of (i) and (ii) being herein
9
referred to as the "DISTRIBUTION DATE"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for the Common Stock of the Company or the Convertible Preferred
Stock registered in the names of the holders thereof (which certificates for
Common Stock or the Convertible Preferred Stock shall be deemed also to be
certificates for Rights) and not by separate certificates and (y) the Rights
will be transferable only in connection with the transfer of the underlying
shares of Common Stock or Convertible Preferred 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 Common Stock of the Company and of the Convertible Preferred Stock
as of the Close of Business on the Distribution Date, at the address of such
holder shown on the records of the Company, one or more rights certificates,
substantially in the form attached hereto as Exhibit B (each, a "RIGHTS
CERTIFICATE"), evidencing one Right for each share of Common Stock so held
(subject to adjustment as provided herein) or a number of Rights equal to the
Conversion Number for each share of Convertible Preferred Stock so held. In the
event that an adjustment in the number of Rights per share of Common Stock or
Convertible Preferred Stock has been made pursuant to Section 11(i) hereof, at
the time of distribution of the Rights Certificates, the Company shall not be
required to issue Rights Certificates evidencing fractional Rights, but may, in
lieu thereof, make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) 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) Rights shall be issued and distributed in respect of all
shares of Common Stock of the Company and in respect of all shares of
Convertible Preferred Stock which are either (i) outstanding at the Record Date
or (ii) issued after the record date but, prior to the earlier of the
Distribution Date or the Expiration Date. In addition, to the extent provided in
Section 22 hereof, Rights shall be issued in respect of shares of Common Stock
of the Company or the Convertible Preferred Stock issued after the Distribution
Date and prior to the Expiration Date. Certificates representing such shares of
Common Stock of the Company or the Convertible Preferred Stock shall also be
deemed to be certificates for Rights, and shall, as promptly as practicable
following the date of this Agreement, bear the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in the Rights
Agreement between Wyndham International,
10
Inc. (the "Company") and American Stock Transfer and Trust
Company, a New York corporation , (the "Rights Agent") dated
as of June 29, 1999, as the same may be amended, restated,
renewed or extended from time to time (the "Rights
Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal
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 set
forth in the Rights Agreement, Rights beneficially owned (as
such term is defined in the Rights Agreement) by any Person
who is, was or becomes an Acquiring Person or any Associate or
Affiliate of an Acquiring Person (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. The Rights shall not be exercisable, and shall be
void so long as held, by a holder in any jurisdiction where
the requisite qualification to the issuance to such holder, or
the exercise by such holder, of the Rights in such
jurisdiction shall not have been obtained or be obtainable.
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 Common Stock or the Convertible Preferred Stock represented
by such certificates shall be evidenced by such certificates alone and
registered holders of Common Stock or the Convertible Preferred Stock shall also
be the registered holders of the associated Rights, and the transfer (including
the conversion) of any of such certificates shall also constitute the transfer
of the Rights associated with the Common Stock or the Convertible Preferred
Stock represented by such certificates.
(c) Notwithstanding anything in this Agreement to the
contrary, in the event that prior to the earlier of the Distribution Date or the
redemption,
11
expiration or termination of the Rights, any shares of Convertible Preferred
Stock are retired and canceled in connection with the conversion of such shares
into Common Stock of the Company, then the associated Rights shall be deemed to
be similarly retired and cancelled.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to
purchase, assignment and certificate contained therein to be printed on the
reverse thereof) shall each be substantially in the form attached hereto as
Exhibit B and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this 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 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the date of this
Agreement and on their face shall entitle the holders thereof to purchase such
number of shares of Preferred Stock as shall be set forth therein at the
exercise price set forth therein (such exercise price per share of Preferred
Stock, as adjusted from time to time hereunder, the "PURCHASE PRICE"), but the
amount and type of securities purchasable upon the exercise of each Right and
the Purchase Price thereof shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person; (ii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee after the Acquiring Person becomes such; or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming
such and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests in
such Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding (whether or not in writing)
regarding the transferred Rights, the shares of Common Stock of the Company or
the shares of Convertible Preferred Stock, or (B) a transfer which the Board, in
its sole discretion, has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance of the
provisions of Section 7(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange,
12
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 is, was or became an
Acquiring Person or an Associate or Affiliate of an Acquiring
Person (as such terms are defined in the Rights Agreement).
Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed under seal on
behalf of the Company by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signature, and by the Secretary or
any Assistant Secretary of the Company, either manually or by facsimile
signature. The Rights Certificates shall be manually countersigned by an
authorized signatory of 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 an authorized signatory of the Rights Agent
and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by an authorized signatory of 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 Certificate 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 Rights evidenced on its face
by each of the Rights Certificates and the date of each of the Rights
Certificates.
13
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 hereof, 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 Rights Certificates may be transferred, split
up, combined or exchanged for another Rights Certificate or Rights Certificates
entitling the registered holder to purchase a like number of shares of Common
Stock (or, following the occurrence of a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Rights Certificates surrendered then entitled such holder (or former holder
in the case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or Rights
Certificates shall make such request in writing delivered to the Rights Agent,
and shall surrender the Rights Certificate or Rights Certificates to be
transferred, split up, combined or exchanged, with the forms of assignment and
certificate contained therein duly executed, 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 or Rights Certificates 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 or
Rights Certificates and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Associates or
Affiliates thereof as the Company shall reasonably request. Thereupon, the
Rights Agent shall, subject to Section 4(b), Section 7(e) and Section 14 hereof,
countersign and deliver to the Person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment from the holder of a Rights Certificate 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 valid Rights Certificate and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the Rights Certificate if mutilated, the Company will execute and deliver a new
Rights Certificate of like tenor to the Rights Agent for
14
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) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions on
exercisability set forth in Section 9(c), Section 11(a)(iii), Section 23(a) and
Section 24 hereof) 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 contained therein 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 one one-thousandth of a share of Preferred Stock (or,
following the occurrence of a Triggering Event, Class A Common Stock, other
securities, cash or other assets, as the case may be) as to which such
surrendered Rights are then exercisable, at or prior to the earliest of (i) the
Final Expiration Date, (ii) the time at which the Rights are redeemed as
provided in Section 23 hereof or (iii) the time at which the Rights are
exchanged as provided in Section 24 hereof (the earliest of (i), (ii) and (iii)
being herein referred to as the "EXPIRATION DATE").
(b) The Purchase Price for each one one-thousandth of a
share of Preferred Stock pursuant to the exercise of a Right shall initially be
$35.00, shall be subject to adjustment from time to time as provided in Sections
11 and 13(a) hereof and shall be payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the certificate
contained therein duly executed, accompanied by payment, with respect to each
Right so exercised, of the Purchase Price, as such amount may be reduced
pursuant to Section 11(a)(iii) hereof, per one one-thousandth of a share of
Preferred Stock (or, following the occurrence of a Triggering Event, for Class A
Common Stock, other securities, cash or other assets, as the case may be) to be
purchased (as set forth below) and an amount equal to any applicable transfer
tax, the Rights Agent shall, subject to Sections 7(f) and 20(k) hereof,
thereupon promptly (i)(A) requisition from any transfer agent of the shares of
Preferred Stock (or make available, if the Rights Agent is the transfer agent
for such shares) certificates for the total number of one one-thousandths of a
share of Preferred Stock to be purchased, and the Company hereby
15
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
Preferred Stock issuable upon exercise of the Rights hereunder with a depositary
agent, requisition from the depositary agent depositary receipts representing
such number of one one-thousandths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with the
depositary agent to comply with such request), (ii) 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 Certificates, registered in
such name or names as may be designated by such holder, (iii) requisition from
the Company the amount of cash, if any, to be paid in lieu of fractional shares
in accordance with Section 14 hereof, and (iv) after receipt thereof, deliver
such cash, if any, 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. The payment of the Purchase Price (as such amount may be reduced
pursuant to Section 11(a)(iii) hereof) shall be made in cash or by certified
check, cashier's check or bank draft payable to the order of the Company. In the
event that the Company is obligated to issue other securities, pay cash or
distribute other property pursuant to this Section 7(c) or Section 11(a) hereof,
the Company will make all arrangements necessary so that such other securities,
cash 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 Preferred Stock would be
issued.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all of 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
hereof.
(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 which the Board, in its sole discretion,
determines is or was involved in or caused or facilitated, directly or
indirectly (including through any change in the Board), such Section 11(a)(ii)
Event, (ii) a transferee of any such Acquiring Person (or of any such Associate
or Affiliate) who becomes a transferee after such Acquiring Person becomes such
or (iii) a transferee of any such Acquiring
16
Person (or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with such Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
such Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding (whether or not in writing) regarding the
transferred Rights or (B) a transfer which the Board 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) hereof are complied with, but
shall have no liability to any holder of Rights Certificates or other Person as
a result of its failure to make any determinations with respect to an Acquiring
Person or any of their Associates, Affiliates 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 of any Rights
Certificate upon the occurrence of any purported assignment or 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 assignment or election to
purchase set forth on the reverse side of the Rights Certificate surrendered for
such assignment or exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Associates or
Affiliates 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, split up, combination or exchange shall, if surrendered to the Company
or any of its agents, be delivered to the Rights Agent for cancellation or in
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 Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Rights Certificate purchased
or acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Rights Certificates to the Company, or shall,
at the written request of the Company, destroy such cancelled Rights
Certificates and, in such case, shall deliver a certificate of destruction
thereof to the Company.
17
Section 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) Subject to its rights under Section 11(a)(iii) hereof,
the Company covenants and agrees that, from and after the Distribution Date, it
will cause to be reserved and kept available out of its authorized and unissued
shares of Preferred Stock (and, following the occurrence of a Triggering Event,
out of its authorized and issued shares of Common Stock and/or other securities
or out of its authorized and issued shares held in its treasury), the number of
shares of Preferred Stock of the Company (and, following the occurrence of a
Triggering Event, the amount of Class A Common Stock and/or other securities)
that, as provided in this Agreement (including Section 11(a)(iii) hereof) will
be sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following
the occurrence of a Triggering Event, Class A Common Stock and/or other
securities) issuable and deliverable upon the exercise of the Rights may be
listed on any national securities exchange, the Company shall use all reasonable
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 upon official
notice of issuance upon such exercise.
(c) The Company shall use all reasonable efforts to (i)
file, as soon as practicable following the earliest date after the first
occurrence of a Triggering Event in which the consideration to be delivered by
the Company upon exercise of the Rights has been determined in accordance with
this Agreement, or as soon as required by law following the Distribution Date,
as the case may be, a registration statement under the Act on an appropriate
form with respect to the Class A Common Stock of the Company or other securities
purchasable upon exercise of the Rights, (ii) cause such registration statement
to become effective as soon as practicable after such filing and (iii) cause
such registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act) until the earlier of (A) the date as of
which the Rights are no longer exercisable for such securities and (B) the
Expiration Date. 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 and other jurisdictions in connection with the exercisability of
the Rights. The Company may, acting by resolution of the Board, temporarily
suspend, for a period of time not to exceed 90 days after the date set forth in
clause (i) of the first sentence of this Section 9(c), the exercisability of the
Rights in order to prepare and file such registration statement and permit it to
become effective. In the
18
event of any such suspension, the Company shall issue a public announcement
stating that the exercisability of the Rights has been temporarily suspended and
shall issue 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 in other circumstances following the Distribution Date,
the Company may similarly temporarily suspend the exercisability of the Rights
until such time as a registration statement has been declared effective.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained or the exercise thereof shall not
otherwise be permitted under applicable law or a 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 one one-thousandths of a
share of Preferred Stock (and, following the occurrence of a Triggering Event,
Class A 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, except as
set forth in Section 6(a) hereof and this Section 9(e), it will pay when due and
payable any and all federal and state transfer taxes and charges which may be
payable in respect of the issuance or delivery of the Rights Certificates and of
any certificates for a number of one one-thousandths of a share of Preferred
Stock (or Class A Common Stock and/or other securities, as the case may be) upon
the exercise of Rights. The Company shall not, however, be required to pay any
transfer tax which may be payable in respect of any transfer or delivery of
Rights Certificates to a Person other than, or the issuance or delivery of a
number of one one-thousandths of a share of Preferred Stock (or Class A 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, nor shall the Company be required to issue or deliver
any certificates for a number of one one-thousandths of a share of Preferred
Stock (or Class A 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.
19
Section 10. PREFERRED STOCK RECORD DATE. Each Person in whose
name any certificate for a number of one one-thousandths of a share of Preferred
Stock (or Class A Common Stock and/or other securities, as the case may be) is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such fractional shares of Preferred Stock (or
Class A 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 of such surrender and payment is a date upon which the transfer
books for the Preferred Stock (or Class A Common Stock and/or other securities,
as the case may be) 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 transfer books for
the Preferred Stock (or Class A Common Stock and/or other securities, as the
case may be) are open. Prior to the exercise of the Rights evidenced thereby,
the holder of a Rights Certificate, as such, shall not be entitled to any rights
of a shareholder of the Company (or the Principal Party) 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 (or the Principal Party), 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,
or fractions thereof, purchasable upon exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a) (i) In the event the Company shall at any time
after the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B) subdivide or
split the outstanding Preferred Stock, (C) combine or consolidate the
outstanding Preferred Stock into a smaller number of shares or (D)
issue any shares of its capital stock in a reclassification of the
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) and Section 7(e) hereof, the Purchase Price in effect at the time
of the record date for such dividend or of the effective date of such
subdivision, split, combination, consolidation or reclassification, and
the number and kind of shares of Preferred Stock
20
(or Class A Common Stock and/or other securities, as the case may be)
issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to
receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of shares of Preferred Stock or capital
stock, as the case may be, which, if such Right had been exercised
immediately prior to such date, whether or not such Right was then
exercisable, and at a time when the transfer books for the Preferred
Stock (or other capital stock, as the case may be) of the Company were
open, such holder would have owned upon such exercise and been entitled
to receive by virtue of such dividend, subdivision, split, combination,
consolidation or reclassification. If an event occurs which would
require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) In the event (a "SECTION 11(a)(ii)
EVENT") that any Person (other than an Exempt Person or a Grandfathered
Person), alone or together with its Associates and Affiliates, 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 also is a Section 13 Event, then proper provision
shall be made so that promptly after the date of occurrence of an
Section 11(a)(ii) Event, each holder of a Right (except as provided
below and in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase Price in
accordance with the terms of this Agreement, in lieu of a number of one
one-thousandths of a share of Preferred Stock, such number of shares of
Class A Common Stock of the Company as shall equal the result obtained
by (x) multiplying the then current Purchase Price by the then number
of one one-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event (whether or not such Right was then exercisable) and
(y) dividing that product (which following such first occurrence shall
thereafter be referred to as the "Purchase Price" for each Right and
for all purposes of this Agreement) by 50% of the Current Market Price
per share of Class A Common Stock of the Company on the date of such
first occurrence (such number of shares being referred to as the
"ADJUSTMENT SHARES").
21
(iii) In the event that the number of shares
of Class A Common Stock which are authorized by the Company's
certificate of incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance
with the foregoing subparagraph (ii) of this Section 11(a), the
Company, acting by resolution of the Board, shall: (A) determine the
excess of (1) the value of the Adjustment Shares issuable upon the
exercise of a Right (the "CURRENT VALUE") over (2) the Purchase Price
attributable to each Right (such excess being referred to as the
"SPREAD") and (B) with respect to all or a portion of each Right
(subject to Section 7(e) hereof), make adequate provision to substitute
for the Adjustment Shares, upon payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Class A
Common Stock or equity securities, if any, of the Company other than
Class A Common Stock (including without limitation shares, or units of
shares, of Preferred Stock which the Board has deemed to have the same
value as shares of Class A 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 based upon
the advice of a nationally recognized investment banking firm selected
by the Board; PROVIDED, HOWEVER, that if the Company shall not have
made adequate provision to deliver value pursuant to clause (B) above
within 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) hereof expires (the later of
(x) and (y) being referred to herein as the "SECTION 11(a)(ii) TRIGGER
DATE"), then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the
Purchase Price, shares of Class A Common Stock (to the extent
available) and then, if necessary, cash, which shares and/or cash have
an aggregate value equal to the Spread. If the Board shall determine in
good faith that it is likely that sufficient additional shares of Class
A Common Stock of the Company could be authorized for issuance upon
exercise in full of the Rights, the 30-day period set forth above may
be extended to the extent necessary, but not more than 90 days after
the Section 11(a)(ii) Trigger Date, in order
22
that the Company may seek shareholder 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 or second sentences of this Section 11(a)(iii), the Company (x)
shall provide, subject to Section 7(e) hereof, that such action shall
apply uniformly to all outstanding Rights and (y) may suspend the
exercisability of the Rights until the expiration of the Substitution
Period in order to seek any authorization of additional shares or to
decide the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended
and 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
Class A Common Stock of the Company shall be the Current Market Price
per share of the Class A Common Stock on the Section 11(a)(ii) Trigger
Date, and the value of any Common Stock Equivalent shall be deemed to
be equal to the value of the Class A Common Stock on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within 45
calendar days after such record date) Preferred Stock (or shares having the same
rights, privileges and preferences as the shares of Preferred Stock (such shares
being referred to herein as the "Equivalent Preference Stock")) or securities
convertible into Preferred Stock or Equivalent Preference Stock at a price per
share of Preferred Stock or per share of Equivalent Preference Stock (or having
a conversion price per share, if a security convertible into Preferred Stock or
Equivalent Preference Stock) less than the Current Market Price per share of
Class A Common Stock on such record date, except as otherwise provided in
Section 11(a) and Section 7(e) hereof, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which
shall be the sum of (i) the number of shares of Preferred Stock outstanding on
such record date and (ii) the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred Stock and/or
Equivalent Preference Stock so to be offered (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 sum of
(i) the
23
number of shares of Preferred Stock outstanding on such record date and (ii) the
number of additional shares of Preferred Stock and/or Equivalent Preference
Stock to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid by delivery of consideration part or all of which
may be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board, which determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes. Shares of 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 adjustment shall be made successively whenever such a record date is fixed,
and in the event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any such distribution
made in connection with a consolidation or merger in which the Company is the
continuing or surviving corporation) of evidences of indebtedness, cash (other
than a regular periodic cash dividend out of the earnings or retained earnings
of the Company), assets (other than a dividend payable in Preferred Stock, but
including any dividend payable in stock other than Preferred Stock) or
subscription rights or warrants (excluding those referred to in Section 11(b)
hereof), except as otherwise provided in Section 11(a) and Section 7(e) hereof,
the Purchase Price to be in effect after such record date shall be determined by
multiplying the Purchase Price in effect immediately prior to such record date
by a fraction, the numerator of which shall be the Current Market Price per
share of Preferred Stock on such record date, less the fair market value (as
determined in good faith by the Board, which determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all
purposes) 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 Preferred Stock and the denominator of which shall be such Current Market
Price per share of 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 shall be adjusted to be the Purchase Price which
would have been in effect if such record date had not been fixed.
(d) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "CURRENT MARKET
PRICE" per share of Class A Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Class A Common Stock for
the
24
30 consecutive Trading Days immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Class A Common Stock on any date shall be deemed to be the
average of the daily closing prices per share of such Class A Common Stock for
the 10 consecutive Trading Days immediately following such date; PROVIDED,
HOWEVER, that in the event that the Current Market Price per share of the Class
A Common Stock is determined during a period following the announcement by the
issuer of such Class A Common Stock of (A) a dividend or distribution on such
Class A Common Stock payable in shares of such Class A Common Stock or
securities convertible into shares of such Class A Common Stock (other than the
Rights) or (B) any subdivision, combination, consolidation, reverse stock split
or reclassification of such Class A Common Stock, and prior to the expiration of
the requisite 30-Trading Day or 10-Trading Day period, as set forth above, after
the ex-dividend date for such dividend or distribution, or the record date for
such subdivision, combination, consolidation, reverse stock split, or
reclassification, then, and in each such case, the Current Market Price shall be
properly adjusted to take into account ex-dividend trading. The closing price
for each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or admitted to
trading on the New York Stock Exchange or, if the shares of Class A Common Stock
are not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system or as quoted
by the Nasdaq National Market with respect to securities listed or admitted to
trading on another national securities exchange or quoted by the Nasdaq National
Market, respectively, or, if the shares of Class A Common Stock are not listed
or admitted to trading on any national securities exchange or quoted by the
Nasdaq National Market, 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 Nasdaq Stock Market or such other quotation system then in use or, if on
any such date the shares of Class A 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 Class A Common Stock selected
by the Board. If on any such date the Class A Common Stock is not publicly held
or not so listed, admitted to trading or quoted, and no market maker is making a
market in such Class A Common Stock, Current Market Price shall mean the fair
value of such shares on such date as determined in good faith by the Board,
which determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. The term "TRADING DAY" shall
mean a day on which the principal national securities exchange on which the
shares of Class A Common Stock are listed or admitted to trading is open for the
25
transaction of business or, if the shares of Class A Common Stock are not listed
or admitted to trading on any national securities exchange, a Business Day.
(i) For the purpose of any computation
hereunder, the "CURRENT MARKET PRICE" per share of Preferred Stock
shall be determined in the same manner as set forth above for the Class
A Common Stock in Paragraph (i) of this Section 11(d) (other than the
last sentence thereof). If the current market price per share of
Preferred Stock cannot be determined in the manner provided above or if
the Preferred Stock is not publicly held or listed or traded in a
manner described in Paragraph (i) of this Section 11(d), the Current
Market Price per share of Preferred Stock shall be conclusively deemed
to be an amount equal to 1,000 (as such number may be appropriately
adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Class A Common Stock occurring
after the date of this Agreement) multiplied by the Current Market
Price per share of the Class A Common Stock. If neither the Class A
Common Stock nor the Preferred Stock is publicly held or so listed or
traded, Current Market Price per share of the Preferred Stock shall
mean the fair value per share as determined in good faith by the Board,
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-thousandth of a
share of Preferred Stock shall be equal to the Current Market Price of
one share of Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent in the Purchase Price;
PROVIDED, HOWEVER, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share of Class A
Common Stock or other share or ten-millionth of a share of 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 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) hereof, the holder of any Right thereafter exercised
shall
26
become entitled to receive any shares of capital stock other than Preferred
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof (or the number of Rights) 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 Preferred Stock
contained in Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k), (l) and (m)
hereof, and the provisions of Sections 7, 9, 10, 13 and 14 hereof with respect
to the Preferred Stock of the Company shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of one one-thousandths
of a share of Preferred Stock purchasable from time to time hereunder upon
exercise of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-thousandths of a share of Preferred Stock (calculated to the nearest
one-millionth of a share) as the Board of Directors of the Company determines is
appropriate to preserve the economic value of the Rights, including, by way of
example, that number obtained by (i) multiplying (x) the number of one
one-thousandths of a share of Preferred Stock for which a Right may be
exercisable immediately prior to this adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price, and (ii)
dividing the product so obtained by the Purchase Price in effect immediately
after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one one-thousandths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
the adjustment in the number of Rights shall be exercisable for the number of
one one-thousandths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one-thousandth of a Right) obtained by
dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement
27
of its election to adjust the number of Rights, indicating the record date for
the adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is adjusted
or any day thereafter, but, if the Rights Certificates have been issued, shall
be at least 10 days later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number of Rights
pursuant to this Section 11(i), the Company shall, as promptly as practicable,
cause to be distributed to holders of record of Rights Certificates on such
record date Rights Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a result of such
adjustment or, at the option of the Company, shall cause to be distributed to
such holders of record in substitution and replacement for the 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 one one-thousandths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Rights Certificates theretofore
and thereafter issued may continue to express the Purchase Price per one
one-thousandth of a share of Preferred Stock and the number of one
one-thousandths of a share of 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 par value, if any, of the number of one
one-thousandths of a share of Preferred Stock issuable upon exercise of the
Rights, the Company shall use all reasonable efforts to take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue, fully paid and nonassessable, such number
of one one-thousandths of a share of 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 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
of the number of one one-thousandths of a share of Preferred Stock or other
capital stock or securities of the Company, if any, issuable upon such exercise
over and above the number of
28
one one-thousandths of a share of Preferred Stock or 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 adjustments in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in its good faith judgment the Board shall
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred
Stock at less than the Current Market Price, (iii) issuance wholly for cash of
shares of Preferred Stock or securities which by their terms are convertible
into or exchangeable for shares of 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 Preferred Stock shall not be
taxable to such shareholders.
(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) hereof), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof) or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company or any of its Subsidiaries in one or more transactions
each of which complies with Section 11(o) hereof), if (x) at the time of or
immediately after such consolidation, merger, sale or transfer there are any
rights, warrants or other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate the benefits
intended to be afforded by the Rights or (y) prior to, simultaneously with or
immediately after such consolidation, merger, sale or transfer, the shareholders
of the Person who constitutes, or would constitute, the "Principal Party" for
purposes of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Associates and Affiliates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section 27
hereof, take (or
29
permit any Subsidiary to take) any action if at the time such action is taken it
is reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the date
of this Agreement but prior to the Distribution Date (i) declare a dividend on
the outstanding shares of Common Stock payable in shares of Common Stock or on
the outstanding shares of the Convertible Preferred Stock payable in shares of
Convertible Preferred Stock, (ii) subdivide the outstanding shares of Common
Stock or Convertible Preferred Stock, or (iii) combine the outstanding shares of
Common Stock or Convertible Preferred Stock into a smaller number of shares, the
number of Rights associated with each share of Common Stock or Convertible
Preferred Stock then outstanding, whichever is applicable, or issued or
delivered thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter associated with
each share of Common Stock or Convertible Preferred Stock, as applicable,
following any such event shall equal the result obtained by multiplying the
number of Rights associated with each share of Common Stock or Convertible
Preferred Stock immediately prior to such event by a fraction, the numerator of
which shall be the total number of shares of Common Stock or Convertible
Preferred Stock, whichever is applicable, outstanding immediately prior the
occurrence of the event and the denominator of which shall be the total number
of shares of Common Stock or Convertible Preferred Stock, whichever is
applicable, outstanding immediately following the occurrence of such event.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES. Whenever an adjustment is made as provided in Section 11 or Section
13 hereof, the Company shall (a) promptly prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) promptly file with the Rights Agent, and with each transfer
agent for the Preferred Stock, a copy of such certificate and (c) mail a brief
summary thereof to each record holder of a Rights Certificate (or, if prior to
the Distribution Date, to each record holder of a certificate representing
shares of Common Stock or Convertible Preferred Stock) in accordance with
Section 24 hereof. Notwithstanding the foregoing sentence, the failure of the
Company to prepare such certificate or statement or make such filings or
mailings shall not affect the validity of, or the force or effect of, the
requirement for such adjustment. The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment therein contained and
shall not be deemed to have knowledge of any such adjustment unless and until it
shall have received such certificate.
30
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF
ASSETS OR EARNING POWER.
(a) In the event (a "SECTION 13 EVENT") that, on or after
the Stock Acquisition Date, directly or indirectly, (x) the Company shall
consolidate or otherwise combine with, or merge with or into, any other Person
or Persons (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) and the Company shall not be the continuing
or surviving corporation of such consolidation, combination or merger, (y) any
Person or Persons (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate or otherwise combine with,
or merge with or into, the Company and the Company shall be the continuing or
surviving corporation of such consolidation, combination or merger and, in
connection with such consolidation, combination or merger, all or part of the
outstanding shares of Common Stock of the Company shall be changed into or
exchanged for stock or other securities of any other Person or Persons or cash
or any other property or (z) the Company shall sell or otherwise transfer (or
one or more of its Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets, earning power or cash
flow aggregating more than 50% of the assets, earning power or cash flow of the
Company and its Subsidiaries (taken as a whole and calculated on the basis of
the Company's most recent regularly prepared financial statements) 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) hereof); PROVIDED,
HOWEVER, that this clause (z) of Section 13(a) hereof shall not apply to the PRO
RATA distribution by the Company of assets (including securities) of the Company
or any of its Subsidiaries to all holders of Common Stock of the Company; then,
and in each such case, proper provision shall be made so that: (i) each holder
of a Right, except as provided in Section 7(e) hereof, shall, on or after the
later of (A) the date of the first occurrence of any such Section 13 Event or
(B) the date of the expiration of the period within which the Rights may be
redeemed pursuant to Section 23 hereof (as the same may be extended pursuant to
Section 23(a) hereof or amended pursuant to Section 27 hereof), 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-thousandths of a share of Preferred Stock for which a Right is exercisable
immediately prior to the first occurrence of a Section 13 Event (or, if a
Section
31
11(a)(ii) Event has occurred prior to the first occurrence of a Section 13
Event, multiplying the number of one one-thousandths of a share of Preferred
Stock for which 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 (2) dividing that product
(which, following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price per share of the Common Stock of
such Principal Party on the date of consummation of such Section 13 Event; (ii)
the shares of Common Stock of such Principal Party received by each holder of a
Right upon exercise of that Right shall be fully paid and nonassessable; (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 hereof 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 without limitation the reservation of a sufficient number of shares
of its Common Stock) in connection with the consummation of any such transaction
as may be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares of Common
Stock thereafter deliverable upon the exercise of the Rights; and (vi) the
provisions of Section 11(a)(ii) hereof shall be of no effect following the first
occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described
in clause (x) or (y) of the first sentence of Section 13(a) hereof, (A)
the Person that is the issuer of any securities into which shares of
Common Stock of the Company are converted, changed or exchanged in such
merger, consolidation or combination (or, if there is more than one
such issuer, the issuer the Common Stock of which has the greatest
market value) or (B) if no securities are so issued, the Person that is
the other party to such merger (and survives the merger), consolidation
or combination (or, if there is more than one such Person, the Person
the Common Stock of which has the greatest market value), or if the
other party to the merger does not survive the merger, the Person that
does survive the merger (including the Company, if it survives); and
32
(ii) in the case of any transaction described
in clause (z) of the first sentence of Section 13(a) hereof, the Person
that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or transactions
or, if each Person that is a party to such transaction or transactions
receives the same portion of the assets or earning power so transferred
or if the Person receiving the greatest portion of the assets or
earning power cannot be determined, whichever of such Persons is the
issuer of Common Stock having the greatest market value;
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 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; (2)
if the Common Stock of such Person is not and has not been so registered and
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; and (3) if the Common
Stock of such Person is not and has not been so registered and such Person is
owned, directly or indirectly, by a joint venture formed by two or more Persons
that are not owned, directly or indirectly, by the same Person, the rules set
forth in (1) and (2) above shall apply to each of the chains of ownership having
an interest in such joint venture as if such party were a Subsidiary of both or
all of such joint venturers, and the Principal Parties in each such chain shall
bear the obligations set forth in this Section 13 in the same ratio as their
direct or indirect interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of authorized shares
of its Common Stock which have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement confirming that the
requirements of Section 13(a) and Section 13(b) hereof shall promptly be
performed in accordance with their terms and that such Section 13 Event shall
not result in a default by the Principal Party under this Agreement as the same
shall have been assumed by the Principal Party pursuant to Section 13(a),
Section 13(b) hereof and further providing that, as soon as practicable after
the date of any such Section 13 Event, the Principal Party will:
33
(i) prepare and file a registration
statement under the Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, and
shall cause such registration statement to (A) become effective as soon
as practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date and to similarly comply with applicable state
securities laws;
(ii) list or obtain quotation of (or continue
the listing or quotation of) the Rights and the securities purchasable
upon exercise of the Rights on a national securities exchange or by an
automated quotation service;
(iii) 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 (or any successor form) under the Exchange Act;
and
(iv) obtain waivers of any rights of first
refusal or preemptive rights in respect of the shares of Common Stock
of the Principal Party subject to purchase upon exercise of outstanding
Rights.
The provisions of this Section 13 shall similarly apply to successive mergers,
consolidations, combinations 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 theretofore been exercised shall
thereafter become exercisable in the manner described in Section 13(a) hereof.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Sections 11(i) and
(p) hereof, or to distribute Rights Certificates which evidence fractional
Rights. In lieu of any such fractional Rights, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right. For purposes of this
Section 14(a), the current market value of a
34
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any Trading Day shall be
the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular way, in either
case as reported in the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange or, if the Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction reporting
system or the Nasdaq National Market with respect to securities listed on
another principal national securities exchange or quoted by the Nasdaq National
Market, respectively, or if the Rights are not listed or admitted to trading on
any national securities exchange or quoted by the Nasdaq National Market, 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 Nasdaq Stock
Market or such other quotation system then in use or, if on any such date the
Rights are not quoted by any such organization, the average of the closing bid
and asked prices as furnished by a professional market maker making a market in
the Rights selected by the Board. If on any such date no such market maker is
making a market in the Rights, the fair value of the Rights on such date as
determined in good faith by the Board, shall be used.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are integral multiples of
one one-thousandths of a share of Preferred Stock, unless, at the Company's
option, the Company issues depositary receipts therefor) upon exercise of the
Rights or to distribute certificates which evidence fractional shares of
Preferred Stock, unless, at the Company's option, the Company issues depositary
receipts therefor. In lieu of issuing fractional shares of Preferred Stock, the
Company may, at its election, issue depositary receipts evidencing fractions of
shares pursuant to an appropriate agreement between the Company and a depositary
selected by it; provided, that the holders of such depositary receipts shall
have all of the rights, privileges and preferences to which they would be
entitled as beneficial owners of Preferred Stock. With respect to fractional
shares that are not integral multiples of one-thousandth of a share of Preferred
Stock, if the Company does not issue such fractional shares or depositary
receipts in lieu thereof, there shall be paid 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
one-thousandth of a share of Preferred Stock. For purposes of this Section
14(b), the current market value of one one-thousandth of a share of Preferred
Stock shall be one one-thousandth of the closing price of a share of Preferred
Stock (as determined
35
pursuant to Section 11(d)(ii) hereof) 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 Common
Stock upon exercise of the Rights or to distribute certificates which evidence
fractional shares of Class A Common Stock. In lieu of fractional shares of Class
A Common Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one share of
Class A Common Stock. For purposes of this Section 14(c), the current market
value of one share of Class A Common Stock shall be the closing price of one
share of Class A Common Stock, or if unavailable, the appropriate alternative
price (in each case, as determined pursuant to Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of that Right
expressly waives such holder's 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, other than rights of action vested in the Rights Agent in
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock or the Convertible Preferred Stock); and any registered holder of
any Rights Certificate (or, prior to the Distribution Date, of the Common Stock
or the Convertible Preferred Stock), without the consent of the Rights Agent or
of the holder of any other Rights Certificate (or, prior to the Distribution
Date, of the Common Stock or the Convertible Preferred Stock), may, in the
holder's own behalf and for the holder's own benefit, enforce, and may institute
and maintain, any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, the holder's right to exercise the Rights evidenced
by such Rights Certificate in the manner provided in such Rights Certificate and
in this Agreement. Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and shall be entitled to specific performance of the obligations hereunder and
injunctive relief against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
36
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a
Right, by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of shares of Common Stock of
the Company or of Convertible Preferred Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only 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 contained therein duly executed;
(c) subject to Section 6(a) and Section 7(f) hereof, 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
certificate for Common Stock or Convertible Preferred Stock) is registered as
the absolute owner thereof and of the Rights evidenced thereby (notwithstanding
any notations of ownership or writing on the Rights Certificate or the
associated certificate for Common Stock or Convertible Preferred Stock 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) hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or by reason of any statute, rule, regulation or executive order
promulgated or enacted by any governmental authority, prohibiting or otherwise
restraining performance of such obligation; PROVIDED, HOWEVER, that the Company
must use its reasonable best efforts to have any such order, decree or ruling
lifted or otherwise overturned as soon as possible.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A
SHAREHOLDER. No holder, as such, of any Rights Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of the number of
one one-
37
thousandths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable upon the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a shareholder of the Company or any right to vote for
the election of directors or upon any matter submitted to shareholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders (except as
provided in Section 24 hereof), or to receive dividends or subscription rights,
or otherwise, until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions hereof.
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, reimbursement for 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. 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 on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
good faith in connection with its administration of this Agreement in reliance
upon any Rights Certificate or certificate for Common Stock, Convertible
Preferred Stock or for other securities of the Company or upon any 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.
38
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 paper or any further act
on the part of any of the parties hereto; PROVIDED, HOWEVER, that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. If 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 if 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) If 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 if 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 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.
39
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter (including without limitation the identity of any Acquiring Person and
the determination of Current Market Price) be proved or established by the
Company prior to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically prescribed) may
be deemed to be conclusively proved and established by a certificate signed by
the Chairman of the Board, the President, any Vice President, the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
to the Rights Agent for any action taken or suffered in good faith by it under
the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates, nor shall it be required to verify the same (except as to
its countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Rights Certificate (except its countersignature
thereon); 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 hereof or responsible for the manner, method or amount
of any such adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of Rights
evidenced by Rights Certificates after receipt of a certificate describing any
such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Common Stock or Preferred Stock of the Company to be issued pursuant to this
Agreement or any Rights Certificate or as to whether any shares of Common Stock
or Preferred Stock of the Company will, when so issued, be validly authorized
and issued, fully paid and nonassessable.
40
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President, any Vice President, 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 suffered to be taken
by it in good faith in accordance with instructions of any such officer.
(h) The Rights Agent and any shareholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company, become pecuniarily interested in any
transaction in which the Company may be interested, contract with or lend money
to the Company or otherwise act as fully and freely as though the Rights Agent
were not Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other
legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct; PROVIDED, HOWEVER, reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial liability
in the performance of any of its duties hereunder (other than internal costs
incurred by the Rights Agent in providing services to the Company in the
ordinary course of its business as Rights Agent) or in the exercise of its
rights if there shall be reasonable grounds for believing that repayment of such
funds or adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate contained in the
form of
41
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 or clause 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 30 days' notice in writing mailed to the Company and to each
transfer agent of the Common Stock of the Company, the Convertible Preferred
Stock and the Preferred Stock, by registered or certified mail and to the
holders of the Rights Certificates, if any, by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent upon 30 days' notice in
writing mailed to the Rights Agent or successor Rights Agent, as the case may
be, and to each transfer agent of the Common Stock and Preferred Stock of the
Company, by registered or certified mail and to the holders of the Rights
Certificates, if any, by first-class mail. If the Rights Agent shall resign or
be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 days after giving notice of such removal or
after it has 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.
If no successor Rights Agent shall have been appointed within 30 days from the
effectiveness of such removal, resignation or incapacity and no registered
holder of any Rights Certificate has applied pursuant to this Agreement for the
appointment of a new Rights Agent, the Company automatically shall be designated
as successor Rights Agent. Any successor Rights Agent appointed by the Company
or by such a court shall be (a) a corporation organized and doing business under
the laws of the United States or of the state of New York (or of any other state
of the United States so long as such corporation is authorized to do business as
a banking institution in the state of New York), in good standing, having a
principal office in the state of New York, which is authorized to do business as
a banking institution in such state, is authorized under such laws to exercise
corporate trust powers, is subject to supervision or examination by federal or
state authority and has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $100,000,000 or (b) an Affiliate of a
corporation described in clause (a) 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
42
transfer to the successor Rights Agent any property at the time held by it
hereunder and shall execute and deliver, if applicable, any further assurance,
conveyance, act or deed necessary for that purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock of
the Company and the Convertible Preferred Stock and shall mail a notice thereof
in writing to the registered holders of the Rights Certificates, if any. 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
Certificates to the contrary, the Company may, at its option, issue new Rights
Certificates evidencing Rights in such form as may be approved by the Board to
reflect any adjustment or change in the Purchase Price and the number or kind or
class of shares or other securities or property purchasable under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of shares of Common Stock of
the Company or of Convertible Preferred Stock following the Distribution Date
and prior to the redemption or expiration of the Rights, the Company (a) shall,
with respect to shares of Common Stock of the Company so issued or sold pursuant
to the exercise of stock options or under any employee plan or arrangement, and
(b) may, in any other case, if deemed necessary or appropriate by the Board,
issue Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale; PROVIDED, HOWEVER, that (i) no such
Rights Certificate shall be issued with respect to shares of Common Stock of the
Company issued upon conversion of Convertible Preferred Stock following the
Distribution Date, (ii) 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 (iii) 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 may, at its option (which, in the event of a
Change in Control or a possible Change in Control, must include approval by the
Class A and C Director Majority), at any time prior to the earlier of (i) the
occurrence of a Triggering Event or (ii) the Final Expiration Date, direct the
Company to, and if
43
directed, the Company shall, redeem all but not less than all of 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 hereof in respect of the Common Stock of
the Company or the Convertible Preferred Stock, as applicable (such redemption
price being hereinafter referred to as the "REDEMPTION PRICE"). The Company may,
at its option, pay the Redemption Price in shares of Class A Common Stock of the
Company (based on the Current Market Price of the Class A Common Stock of the
Company at the time of redemption), cash or any other form of consideration
deemed appropriate by the Board.
(b) Immediately upon the action of the Board directing the
Company to make 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 directing the Company
to make 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 each record holder of the Common Stock of the Company and
each record holder of Convertible Preferred Stock at the address of such holder
shown on the records of the Company. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made, unless notice is mailed together
with such payment.
Section 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option
(which, in the event of a Change in Control or a possible Change in Control,
must include approval by the Class A and C Director Majority), at any time after
any Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have
become void pursuant to the provisions of Section 7(e) hereof) for shares of
Common Stock of the Company at an exchange ratio of one share of Class A Common
Stock of the Company per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the "SECTION 24(a)(i)
EXCHANGE RATIO"). Notwithstanding the foregoing, the Board of Directors of the
Company shall not be empowered to effect such exchange at any time after any
Person (other than an Exempt Person),
44
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of 50% or more of the Common Stock of the Company.
(i) Notwithstanding the foregoing, the Board
of Directors of the Company may, at its option (which, in the event of
a Change in Control or a possible Change in Control, must include
approval by the Class A and C Director Majority), at any time after any
Person becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof) for
shares of Class A Common Stock of the Company at an exchange ratio
specified in the following sentence, as appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date of this Agreement. Subject to the adjustment
described in the foregoing sentence, each Right may be exchanged for
that number of shares of Class A Common Stock of the Company obtained
by dividing the Spread by the then Fair Market Value per one
one-thousandth of a share of Preferred Stock on the earlier of (x) the
date on which any person becomes an Acquiring Person or (y) the date on
which a tender or exchange offer by any Person (other than an Exempt
Person) is first published or sent or given within the meaning of Rule
14d-4(a) of the Exchange Act or any successor rule, if upon
consummation thereof such Person could become an Acquiring Person (such
exchange ratio being referred to herein as the "SECTION 24(a)(ii)
EXCHANGE RATIO"). Notwithstanding the foregoing, the Board of Directors
of the Company shall not be empowered to effect such exchange at any
time after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the Common Stock of the Company.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of shares of Class A
Common Stock of the Company equal to the number of such Rights held by such
holder multiplied by the Section 24(a)(i) Exchange Ratio or the Section
24(a)(ii) Exchange Ratio, as applicable. The Company shall promptly give notice
of any such exchange in accordance with Section 26 hereof and shall mail a
notice of any such exchange to all
45
of the holders of such Rights at their last addresses as they appear upon the
registry books of the Rights Agent; provided, however, that the failure to give,
or any defect in, such notice shall not affect the validity of such exchange.
Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the shares of Class A Common Stock of
the Company for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(e) hereof) held
by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Preferred Stock (or Equivalent Preference
Stock) for shares of Class A Common Stock of the Company exchangeable for
Rights, at the initial rate of one one-thousandth of a share of Preferred Stock
(or Equivalent Preference Stock) for each share of Class A Common Stock of the
Company, as appropriately adjusted to reflect adjustments in the voting rights
of the Preferred Stock pursuant to the terms thereof, so that the fraction of a
share of Preferred Stock delivered in lieu of each share of Class A Common Stock
of the Company shall have the same voting rights as one share of Class A Common
Stock of the Company.
(d) In the event that there shall not be sufficient shares
of Class A Common Stock of the Company or shares of Preferred Stock (or
Equivalent Preference Stock) issued but not outstanding or authorized but
unissued to permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Class A Common Stock of the Company or shares of
Preferred Stock (or Equivalent Preference Stock) for issuance upon exchange of
the Rights.
(e) The Company shall not be required to issue fractional
shares of Class A Common Stock of the Company or to distribute certificates
which evidence fractional shares of Class A Common Stock of the Company. If the
Company elects not to issue such fractional shares of Class A Common Stock of
the Company, the Company shall pay, in lieu of such fractional shares of Class A
Common Stock of the Company, to the registered holders of the Right Certificates
with regard to which such fractional shares of Class A Common Stock of the
Company would otherwise be issuable, an amount in cash equal to the same
fraction of the Fair Market Value of one whole share of Class A Common Stock of
the Company. For the purposes of this paragraph (e), the Fair Market Value of a
whole share of Class A Common Stock of the Company shall be the closing price of
a share
46
of Class A Common Stock of the Company (as determined pursuant to the second
sentence of Section 11(d)(i) hereof), for the Trading Day immediately prior to
the date of exchange pursuant to this Section 24.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular periodic cash dividend out of earnings or
retained earnings of the Company), (ii) to offer to the holders of Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of the Preferred Stock
(other than a reclassification involving only the subdivision or split of
outstanding shares of Preferred Stock), (iv) to effect any consolidation,
combination or merger into or with any other Person or Persons (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), or to effect any sale or other transfer (or to permit one or more of
its Subsidiaries to effect any sale or other transfer), in one transaction or a
series of related transactions, of more than 50% of the assets, earning power or
cash flow of the Company and its Subsidiaries (taken as a whole) to any other
Person or Persons (other than the Company or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o) hereof) or (v) to
effect the liquidation, dissolution or winding up of the Company, then, in each
such case, the Company shall give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 26 hereof, 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, combination, merger, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of the shares of Common Stock of the
Company or the holders of the shares of Convertible 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 20 days prior to the record date
for determining holders of the shares of Common Stock of the Company or the
holders of the shares of Convertible Preferred Stock for purposes of such
action, and in the case of any such other action, at least 20 days prior to the
date of the taking of such proposed action or the date of participation therein
by the holders of the shares of Common Stock of the Company or the holders of
the shares of Convertible Preferred Stock, whichever shall be the earlier.
47
(b) In case a Section 11(a)(ii) Event shall occur, then (i)
the Company shall as soon as practicable thereafter give to each holder of a
Rights Certificate, to the extent feasible in accordance with Section 26 hereof,
a notice of the occurrence of such event which notice shall specify the event
and the consequences of the event to holders of Rights under Section 11(a)(ii)
hereof, and (ii) all references in the preceding paragraph to Preferred Stock of
the Company shall be deemed thereafter to refer to Class A Common Stock and/or,
if appropriate, to other securities.
(c) The failure of the Company to give any notice provided
for in this Section 25, or any defect therein, shall not (i) relieve the Company
of any of its other obligations under this Agreement or (ii) affect the legality
or validity of the action for which notice was hereby required.
Section 26. NOTICES. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Wyndham International, Inc.
0000 Xxxxxxxx Xxxxxxx
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attention: Secretary
with copies to
Xxxxxxx, Procter & Xxxx XXX
Xxxxxxxx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx, P.C.
Subject to the provisions of Section 21 hereof, 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:
48
American Stock Transfer and Trust Company
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Administration
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 any certificate
representing shares of Common Stock of the Company or the Convertible Preferred
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.
Section 27. SUPPLEMENTS AND AMENDMENTS. Prior to the
occurrence of a Triggering Event, the Company and the Rights Agent shall, if the
Company so directs (which, in the event of a Change in Control or a possible
Change in Control, must include approval by the Class A and C Director
Majority), supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of Common Stock.
From and after the occurrence of a Triggering Event, the Company and the Rights
Agent shall, if the Company so directs (which, in the event of a Change in
Control or a possible Change in Control, must include approval by the Class A
and C Director Majority), supplement or amend this Agreement without the
approval of any holders 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 provisions herein, (iii) to
shorten or lengthen any time period hereunder, or (iv) to change or supplement
the provisions hereunder in any manner which the Company (which, in the event of
a Change in Control or a possible Change in Control, must include approval by
the Class A and C Director Majority) may deem necessary or desirable and which
shall not adversely affect the interests of the holders of Rights Certificates
(other than an Acquiring Person or an Affiliate or Associate of an Acquiring
Person). Upon the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 27, the Rights Agent shall execute such
supplement or amendment. Prior to the occurrence of a Triggering Event, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of Common Stock or the Convertible Preferred Stock, as the case
may be.
49
Section 28. SUCCESSORS. All the covenants and provisions of
this Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD, ETC. The
Board shall have the exclusive power and authority to administer this Agreement
and to exercise all rights and powers specifically granted to the Board or to
the Company, or as may be necessary or advisable in the administration of this
Agreement, including without limitation the right and power to (a) interpret the
provisions of this Agreement and (b) make all determinations deemed necessary or
advisable for the administration of this Agreement (including without limitation
a determination to redeem or not redeem the Rights or to amend this Agreement).
All such actions, calculations, interpretations and determinations (including
without limitation for purposes of clause (y) below, all omissions with respect
to the foregoing) which are done or made by the Board, the Class A and C
Director Majority or the Company in good faith, shall (x) be final, conclusive
and binding on the Company, the Rights Agent, the holders of the Rights and all
other parties and (y) not subject the Board to any liability to the holders of
the Rights or otherwise.
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 Common Stock of the Company
and of the Convertible Preferred Stock) any legal or equitable right, remedy or
claim under this Agreement, but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date, registered holders
of the Common Stock of the Company or of the Convertible Preferred 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 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 hereof shall be reinstated and shall
not expire until the Close of Business on the tenth
50
Business Day following the date of such determination by the Board. Without
limiting the foregoing, if any provision of this Agreement requiring that a
determination be made by less than the entire Board (or at a time or with the
concurrence of a group of directors consisting of less than the entire Board) is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable, such determination shall then be made by the entire Board in
accordance with applicable law and the certificate of incorporation and bylaws
of the Company, each as then in effect.
Section 32. GOVERNING LAW. THE VALIDITY, ENFORCEABILITY,
INTERPRETATION AND PERFORMANCE OF THIS AGREEMENT, EACH RIGHT AND EACH RIGHTS
CERTIFICATE ISSUED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF DELAWARE, APPLICABLE TO CONTRACTS MADE AND TO BE
PERFORMED ENTIRELY WITHIN SUCH STATE. THE COURTS OF THE STATE OF DELAWARE AND OF
THE UNITED STATES OF AMERICA LOCATED IN THE STATE OF DELAWARE (THE "DELAWARE
COURTS") SHALL HAVE EXCLUSIVE JURISDICTION OVER ANY LITIGATION ARISING OUT OF OR
RELATING TO THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED HEREBY, AND ANY
PERSON COMMENCING OR OTHERWISE INVOLVED IN ANY SUCH LITIGATION SHALL WAIVE ANY
OBJECTION TO THE LAYING OF VENUE OF SUCH LITIGATION IN THE DELAWARE COURTS AND
SHALL NOT PLEAD OR CLAIM IN ANY DELAWARE COURT THAT SUCH LITIGATION BROUGHT
THEREIN HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
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. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
[Remainder of Page Intentionally Left Blank]
51
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
Attest: WYNDHAM INTERNATIONAL, INC.
By: /s/ XXXX X. XXXXXX By: /s/ XXXXX X. XXXXXXXX
---------------------------- -----------------------------------
Name: Xxxx X. Xxxxxx Name: Xxxxx X. Xxxxxxxx
Title: General Counsel and Secretary
AMERICAN STOCK TRANSFER
AND TRUST COMPANY,
as Rights Agent
Attest:
By: /s/ XXXXX XXXXXX By: /s/ XXXXXXX X. XXXXXX
---------------------------- -----------------------------------
Name: Xxxxx Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Vice President
EXHIBIT A
FORM OF
CERTIFICATE OF DESIGNATION, RIGHTS AND
PREFERENCES OF THE SERIES OF THE PREFERRED STOCK
OF
WYNDHAM INTERNATIONAL, INC.
TO BE DESIGNATED
SERIES C PARTICIPATING PREFERRED STOCK
Wyndham International, Inc., a Delaware company (the
"Company"), pursuant to the authority conferred on the Board of Directors of the
Company by its Certificate of Incorporation, and in accordance with the
provisions of Section 151 of the Delaware General Corporation Law ("GCL"),
certifies that the Board of Directors of the Company, at a meeting duly called
and held pursuant to Section 141 of the GCL, duly adopted the following
resolution providing for the establishment and issuance of a series of Preferred
Stock, par value $.01 per share, to be designated "Series C Participating
Preferred Stock" and to consist of 5,000,000 shares as follows:
RESOLVED, that, pursuant to the authority expressly granted
and vested in the Board of Directors of this Company in accordance with the
provisions of its Certificate of Incorporation, a series of Preferred Stock of
the Company be and hereby is established, consisting of 5,000,000 shares, to be
designated "Series C Participating Preferred Stock" (the "Series C Participating
Preferred Stock"); the Board of Directors be and hereby is authorized to issue
such shares of Series C Participating Preferred Stock from time to time and for
such consideration and on such terms as the Board of Directors shall determine;
and subject to the limitations provided by law and by the Certificate of
Incorporation, the powers, designations, preferences and relative,
participating, option or other special rights of, and the qualifications,
limitations or restrictions upon, the Series C Participating Preferred Stock
shall be as follows:
Section 1. DESIGNATION AND AMOUNT; RANK. The shares of such
series shall be designated as "Series C Participating Preferred Stock" and the
number
of shares constituting such series shall be 5,000,000. The Series C
Participating Preferred Stock shall rank junior to all series of the
Corporation's preferred stock, including Series A Convertible Preferred Stock,
par value $0.01 per share, and Series B Convertible Preferred Stock, par value
$0.01 per share, with respect to both the payment of dividends and the
distribution of assets upon liquidation, dissolution or winding up.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) The holders of shares of Series C Participating
Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for that purpose, quarterly
dividends payable in cash on the first day of March, June, September and
December in each year (each such date being referred to herein as a "Quarterly
Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date
after the first issuance of a share or fraction of a share of Series C
Participating Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to the greater of (a) $1.00 or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per share amount of
all cash dividends, and 1,000 times the aggregate per share amount (payable in
kind) of all non-cash dividends or other distributions other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock,
par value $0.01 per share, of the Company (the "Common Stock") since the
immediately preceding Quarterly Dividend Payment Date, or, with respect to the
first Quarterly Dividend Payment Date, since the first issuance of any share or
fraction of a share of Series C Participating Preferred Stock. In the event the
Company shall at any time after June 29, 1999 (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common
Stock, or (iii) combine the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which holders of shares of Series C
Participating Preferred Stock were entitled immediately prior to such event
under clause (b) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
The Company shall declare a dividend or distribution on the
Series C Participating Preferred Stock as provided in Paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock); provided that, in the
event no
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dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series C
Participating Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
Dividends shall accrue and be deemed to accrue from day to
day whether or not earned or declared and shall begin to accrue and be
cumulative on outstanding shares of Series C Participating Preferred Stock from
the Quarterly Dividend Payment Date next preceding the date of issue of such
shares of Series C Participating Preferred Stock, unless the date of issue of
such shares is prior to the record date for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to accrue from the date
of issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of holders
of shares of Series C Participating Preferred Stock entitled to receive a
quarterly dividend and before such Quarterly Dividend Payment Date, in either of
which events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series C Participating Preferred Stock
in an amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series C Participating
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 45 days prior to the
date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series C
Participating Preferred Stock shall have the following voting rights:
Subject to the provision for adjustment hereinafter set
forth, each holder of outstanding shares of Series C Participating Preferred
Stock shall be entitled to 1,000 votes at each meeting of shareholders of the
Company (and written actions of shareholders in lieu of meetings) with respect
to any and all matters presented to the shareholders of the Company for their
action or consideration. In the event the Corporation shall at any time after
June 29, 1999 (i) declare any dividend on Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in each such case
the number of votes per share to which holders of shares of Series C
Participating Preferred Stock were entitled
A-3
immediately prior to such event shall be adjusted by multiplying such number by
a fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Except as otherwise provided herein, by law or by the
provisions of its Certificate of Incorporation, as amended from time to time,
the holders of shares of Series C Participating Preferred Stock shall vote
together with the holders of Common Stock as a single class within the meaning
of the GCL.
At any time when any shares of Series C Participating
Preferred Stock are outstanding, the Company shall not materially amend or alter
or repeal the preferences, special rights or other powers of the Series C
Participating Preferred Stock so as to affect adversely the Series C
Participating Preferred Stock by amending, altering or modifying its Certificate
of Incorporation or this Certificate of Designation without the written consent
or affirmative vote of the holders of a majority of the then outstanding shares
of the Series C Participating Preferred Stock in writing or by vote at a
meeting, consenting or voting (as the case may be) separately as a class.
Except as set forth herein or by law, holders of Series C
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are entitled to vote
with holders of Common Stock as set forth herein) for taking any corporate
action.
Section 4. CERTAIN RESTRICTIONS.
Whenever quarterly dividends or other dividends or
distributions payable on the Series C Participating Preferred Stock as provided
in Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not earned or declared, on shares of
Series C Participating Preferred Stock outstanding shall have been paid in full,
the Company shall not
(a) declare or pay dividends on, make any
other distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series
C Participating Preferred Stock;
(b) declare or pay dividends on or make any
other distributions on any shares of stock ranking on a parity (either
as
A-4
to dividends or upon liquidation, dissolution or winding up) with the
Series C Participating Preferred Stock, except dividends paid ratably
on the Series C Participating Preferred Stock and all such parity stock
on which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(c) redeem or purchase or otherwise acquire
for consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series C Participating Preferred Stock, provided that the Company may
at any time redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the Company ranking
junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series C Participating Preferred Stock; or
(d) purchase or otherwise acquire for
consideration any shares of Series C Participating Preferred Stock, or
any shares of stock ranking on a parity with the Series C Participating
Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to
all holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Company shall not permit any subsidiary of the
Company to purchase or otherwise acquire for consideration any shares of stock
of the Company unless the Company could, under Paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in such manner.
Section 5. REACQUIRED SHARES. Any shares of Series C
Participating Preferred Stock purchased or otherwise acquired by the Company in
any manner whatsoever shall be retired and cancelled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions on issuance
set forth herein.
A-5
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
In the event of any voluntary or involuntary liquidation,
dissolution or winding up of the Company, the holders of shares of Series C
Participating Preferred Stock then outstanding shall be entitled to be paid out
of the assets of the Company available for distribution to its shareholders,
after and subject to the payment in full of all amounts required to be
distributed to the holders of any class or series of stock of the Company
ranking on liquidation prior and in preference to the Series C Participating
Preferred Stock, but before any payment shall be made to the holders of any
other shares of capital stock of the Company ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the Series C
Participating Preferred Stock by reason of their ownership thereof, an amount
equal to $1,000 per share of Series C Participating Preferred Stock, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not earned or declared, to the date of such payment (the "Series C
Liquidation Preference"). Following the payment of the full amount of the Series
C Liquidation Preference, no additional distributions shall be made to the
holders of shares of Series C Participating Preferred Stock unless, prior
thereto, the holders of shares of Common Stock shall have received an amount per
share (the "Common Adjustment") equal to the quotient obtained by dividing (i)
the Series C Liquidation Preference by (ii) 1,000 (as appropriately adjusted as
set forth in subparagraph (C) below to reflect such events as stock splits,
stock dividends and recapitalizations with respect to the Common Stock) (such
number in clause (ii), the "Adjustment Number"). Following the payment of the
full amount of the Series E Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series C Participating Preferred Stock and
Common Stock, respectively, holders of Series C Participating Preferred Stock
and holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to 1 with respect to such Preferred Stock and Common
Stock, on a per share basis, respectively.
In the event, however, that upon any such liquidation,
dissolution or winding up of the Company, the remaining assets of the Company
available for distribution to its shareholders and any other series of preferred
stock, if any, ranking on liquidation on a parity with the Series C
Participating Preferred Stock shall be insufficient to pay the holders of shares
of Series C Participating Preferred Stock the full amount to which they shall be
entitled, the holders of shares of Series C Participating Preferred Stock and
any other series of preferred stock ranking on liquidation on a parity with the
Series C Participating Preferred Stock shall share ratably in any distribution
of the remaining assets and funds of the Company in proportion to the respective
amounts which would otherwise be payable in respect of the shares held by them
upon such distribution if all amounts payable on or with respect to such shares
were paid in full. In the event, however, that there are not
A-6
sufficient assets available to permit payment in full of the Common Adjustment,
then such remaining assets shall be distributed ratably to the holders of Common
Stock.
In the event the Company shall at any time after June 29,
1999 (i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case the
Adjustment Number in effect immediately prior to such event shall be adjusted by
multiplying such Adjustment Number by a fraction the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Company
shall enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed into other stock
or securities, cash and/or any other property, then in any such case the shares
of Series C Participating Preferred Stock shall at the same time be similarly
exchanged or changed in an amount per share (subject to the provision for
adjustment hereinafter set forth) equal to 1,000 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Company shall at any time after June 29, 1999 (i)
declare any dividend on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the outstanding Common
Stock into a smaller number of shares, then in each such case the amount set
forth in the preceding sentence with respect to the exchange or change of shares
of Series C Participating Preferred Stock shall be adjusted by multiplying such
amount by a fraction the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. REDEMPTION. The shares of Series C Participating
Preferred Stock shall not be redeemable.
Section 9. FRACTIONAL SHARES. Series C Participating
Preferred Stock may be issued in fractions of a share which shall entitle the
holder, in proportion to such holder's fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series C Participating Preferred Stock.
A-7
EXHIBIT B
[Form of Rights Certificate]
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER JUNE 30, 2008, SUBJECT TO EARLIER REDEMPTION OR EXPIRATION
PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. THE RIGHTS EVIDENCED BY THIS CERTIFICATE SHALL NOT BE EXERCISABLE,
AND SHALL BE VOID SO LONG AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE
REQUISITE QUALIFICATION FOR THE ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH
HOLDER, OF THE RIGHTS IN SUCH JURISDICTION SHALL NOT HAVE BEEN OBTAINED OR BE
OBTAINABLE. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO IS, WAS OR BECAME AN
ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(E) OF SUCH AGREEMENT.]*
---------------------------
*The portion of the legend in brackets shall be inserted only if
applicable, shall be modified to apply to an Acquiring Person, as applicable,
and shall replace the preceding sentence.
RIGHTS CERTIFICATE
WYNDHAM INTERNATIONAL, INC.
This certifies that , or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of June 29, 1999, as amended, restated, renewed or extended
from time to time (the "Rights Agreement"), between Wyndham International, Inc.,
a Delaware corporation (the "Company"), and American Stock Transfer and Trust
Company, a New York corporation (the "Rights Agent"), to purchase from the
Company at any time prior to 5:00 P.M., New York time, on June 30, 2008, at the
office or offices of the Rights Agent, or its successors as Rights Agent,
designated for such purpose, one one-thousandth of a fully paid, nonassessable
share of Series C Participating Preferred Stock of the Company (the "Preferred
Stock"), at a purchase price of $_____ per share (the "Purchase Price"), upon
presentation and surrender of this Rights Certificate with the Form of Election
to Purchase and included Certificate duly completed and executed. The number of
Rights evidenced by this Rights Certificate (and the number of shares which may
be purchased upon exercise thereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of _________, ______, based on
the Preferred Stock as constituted at such date. The Company reserves the right
to require prior to the occurrence of a Triggering Event (as such term is
defined in the Rights Agreement) that a number of
B-2
Rights be exercised so that only whole shares of Preferred Stock will be issued.
The holder of the Right evidenced hereby consents and agrees that, subject to
the terms of the Rights Agreement, the Company and the Rights Agent may deem and
treat the person in whose name this Rights Certificate is registered as the
absolute owner hereof and of the Rights evidenced hereby (notwithstanding any
notations of ownership or writing on this Rights Certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be required to be affected by any
notice to the contrary.
As more fully set forth in the Rights Agreement, from and
after the first occurrence of a Section 11(a)(ii) Event (as such term is defined
in the Rights Agreement), if the Rights evidenced by this Rights Certificate are
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person (as such terms are defined in the Rights Agreement), which is
determined to have been involved in or caused or facilitated, directly or
indirectly, such Section 11(a)(ii) Event, (ii) a transferee of such Acquiring
Person (or of any such Associate or Affiliate), or (iii) under certain
circumstances specified in the Rights Agreement, a transferee of such Acquiring
Person (or of any such Associate or Affiliate) who becomes a transferee prior to
or concurrently with such Acquiring Person becoming such, such Rights shall
become null and void without any further action, and no holder hereof shall have
any right with respect to such Rights whether under the Rights Agreement or
otherwise.
B-3
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other securities, which may
be purchased upon the exercise of the Rights evidenced by this Rights
Certificate are subject to modification and adjustment upon the happening of
certain events, including Triggering Events (as defined in the Rights
Agreement).
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part hereof
and to which Rights Agreement reference is hereby made for a full description of
the rights, limitations of rights, obligations, duties and immunities hereunder
of the Rights Agent, the Company and the holders of the Rights Certificates,
which limitations of rights include the temporary suspension of the
exercisability of such Rights under the specific circumstances set forth in the
Rights Agreement. Reference is also made to the Rights Agreement for definitions
of capitalized terms used and not defined herein. Copies of the Rights Agreement
are on file at the principal office of the Rights Agent and are also available
upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the Rights Agent
designated for such purpose, may be exchanged for another Rights Certificate or
Rights Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of shares of Preferred Stock as the
Rights evidenced by the Rights Certificate
B-4
or Rights Certificates surrendered shall have entitled such holder to purchase.
If this Rights Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at its option at a
redemption price of $.01 per Right at any time prior to the earlier of (i) the
Close of Business on the tenth Business Day following the Stock Acquisition Date
(as such time period may be extended pursuant to the Rights Agreement) and (ii)
the Final Expiration Date (as defined in the Rights Agreement).
If the Company so determines, no fractional shares of
Preferred Stock will be issued upon the exercise of any Right or Rights
evidenced hereby, (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof, a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder of
shares of Common Stock or of any other securities of the Company which may at
any time be issuable on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder hereof, as
such, any of the rights of a
B-5
shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting shareholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights Agent.
B-6
WITNESS the facsimile signature of the proper officers of the
Company.
Dated as of [ ], 1999.
ATTEST: WYNDHAM INTERNATIONAL, INC.
By
-------------------------------------
Secretary
Name:
Title:
Countersigned:
AMERICAN STOCK TRANSFER AND
TRUST COMPANY, as Rights Agent
By
-----------------------------
Authorized Signature
B-7
[Form of Reverse Side of Rights Certificate]
ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED______________________________________________
hereby sells, assigns and transfers unto ____________________________________
--------------------------------------------------------------------------------
(Please print name and address of transferee)
--------------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest herein, and
does hereby irrevocably constitute and appoint ____ Attorney, to transfer the
within Rights Certificate on the books of the within-named Company, with full
power of substitution.
Dated: __________, ________ ---------------------------------------
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an Acquiring
Person, or an
B-8
Associate or Affiliate of any such Acquiring Person (as such terms are defined
in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Associate or Affiliate of an Acquiring Person.
Dated: __________, ________ ---------------------------------------
Signature
Signature Guaranteed:
NOTICE
The signatures to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this Rights Certificate
in every particular, without alteration or enlargement or any change whatsoever.
B-9
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Rights Certificate.)
To: Wyndham International, Inc.
The undersigned hereby irrevocably elects to exercise Rights
represented by this Rights Certificate to purchase the shares of Preferred Stock
issuable upon the exercise of the Rights (or such other securities of the
Company or of any other Person which may be issuable or such other assets which
may be deliverable upon the exercise of the Rights) and requests that
certificates for any such shares or securities be issued in the name of and
delivered to:
Please insert social security
or other identifying number __________________________
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced
by this Rights Certificate, a new Rights Certificate for the balance of such
Rights shall be registered in the name of and delivered to:
B-10
Please insert social security
or other identifying number ___________________
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated: _______________, __________
---------------------------
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are
[] are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Associate or Affiliate of any such Acquiring Person (as
such terms are defined in the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the Rights evidenced by
this Rights Certificate from any Person who is, was or became an Acquiring
Person or an Associate or Affiliate of an Acquiring Person.
Dated: __________, ________ ---------------------------------------
Signature
Signature Guaranteed:
B-11
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face of this Rights
Certificate in every particular, without alteration or enlargement or any change
whatsoever.
B-12
