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EXHIBIT 4.2
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RIGHTS AGREEMENT
by and between
DELPHI AUTOMOTIVE SYSTEMS CORPORATION
and
BANKBOSTON, N.A.,
as Rights Agent
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Dated as of
February 1, 1999
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TABLE OF CONTENTS
Section Page
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1. Certain Definitions..................................................... 1
2. Appointment of Rights Agent............................................. 8
3. Issuance of Right Certificates.......................................... 8
4. Form of Right Certificates.............................................. 11
5. Countersignature and Registration....................................... 11
6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates.................................... 12
7. Exercise of Rights; Exercise Price; Expiration Date
of Rights.................................................... 13
8. Cancellation and Destruction of Right Certificates...................... 16
9. Reservation and Availability of Shares of Preferred
Stock........................................................ 16
10. Preferred Stock Record Date............................................ 18
11. Adjustment of Exercise Price or Number of Shares....................... 18
12. Certification of Adjusted Exercise Price or Number
of Shares.................................................... 25
13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power............................................. 26
14. Fractional Rights and Fractional Shares................................ 31
15. Rights of Action....................................................... 31
16. Agreement of Right Holders............................................. 32
17. Right Certificate Holder Not Deemed a Stockholder...................... 33
18. Concerning the Rights Agent............................................ 33
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Section Page
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19. Merger or Consolidation of, or Change in Name of,
the Rights Agent............................................. 34
20. Duties of Rights Agent................................................. 35
21. Change of Rights Agent................................................. 37
22. Issuance of New Right Certificates..................................... 38
23. Redemption............................................................. 39
24. Notice of Proposed Actions............................................. 40
25. Notices ............................................................. 41
26. Supplements and Amendments............................................. 42
27. Exchange ............................................................. 42
28. Successors............................................................. 44
29. Benefits of this Agreement............................................. 44
30. Delaware Contract...................................................... 44
31. Counterparts........................................................... 44
32. Descriptive Headings................................................... 45
33. Severability........................................................... 45
34. Determinations and Actions by the Board of Directors .................. 45
Exhibit A - Summary of Rights
Exhibit B - Form of Right Certificate
Exhibit C - Form of Certificate of Designations of Series A
Junior Preferred Stock
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RIGHTS AGREEMENT
Rights Agreement (this "AGREEMENT"), dated as of February 1,
1999, by and between Delphi Automotive Systems Corporation, a Delaware
corporation (the "CORPORATION"), and BankBoston, N.A., a national banking
association (the "RIGHTS AGENT").
W I T N E S S E T H :
WHEREAS, on February __, 1999, the IPO Committee of the
Board of Directors (the "IPO COMMITTEE"), as specifically authorized by the
Board of Directors of the Corporation, authorized the issuance, as a dividend,
of one right (a "RIGHT") for each share of Common Stock, $0.01 par value per
share, of the Corporation outstanding as of the time and date determined by the
IPO Committee to be the record date of such distribution (the "RECORD DATE"),
each such Right representing the right to purchase one one-hundredth of a share
of Series A Junior Preferred Stock of the Corporation ("PREFERRED STOCK") having
the rights and preferences set forth in the form of Certificate of Designations
attached hereto as Exhibit C, which was authorized by the IPO Committee of the
Board of Directors on February ___, 1999, upon the terms and subject to the
conditions hereinafter set forth; and
WHEREAS, the Board of Directors of the Corporation further
authorized the issuance of one Right (subject to adjustment) with respect to
each share of Common Stock which may be issued between the Record Date and the
earlier to occur of the Distribution Date, the Expiration Date or the Final
Expiration Date (as such terms are hereinafter defined), including any shares of
Common Stock of the Corporation issued in connection with the initial public
offering of the Common Stock; provided, however, that Rights may be issued with
respect to shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the Expiration Date in accordance with Section 22
hereof;
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this
Agreement, the following terms shall have the meanings provided by this Section
1, any capitalized term defined in this Section 1 and used in the following
definitions having the meaning provided by this Section 1:
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(a) "ACQUIRING PERSON" shall mean any Person who or
which, together with all Affiliates and Associates of such
Person, shall be the Beneficial Owner of 15% or more of the
Voting Stock of the Corporation then outstanding; provided,
however, that an Acquiring Person shall not include (i) an
Exempt Person or any Affiliate or Associate of an Exempt
Person or (ii) any Person who or which, together with all
Affiliates and Associates of such Person, would be an
Acquiring Person solely by reason of (A) being the
Beneficial Owner of shares of Voting Stock of the
Corporation, the Beneficial Ownership of which was acquired
by such Person (together with all Affiliates and Associates
of such Person) pursuant to any action or transaction or
series of related actions or transactions approved by the
Board of Directors before such Person (together with all
Affiliates and Associates of such Person) otherwise became
an Acquiring Person or (B) a reduction in the number of
issued and outstanding shares of Voting Stock of the
Corporation pursuant to a transaction or a series of related
transactions approved by the Board of Directors of the
Corporation; provided, further, that in the event a Person
described in this clause (ii) does not become an Acquiring
Person by reason of subclause (A) or (B) of this clause
(ii), such Person nonetheless shall become an Acquiring
Person in the event such Person (together with all
Affiliates and Associates of such Person) thereafter
acquires Beneficial Ownership of an additional 1% of the
Voting Stock of the Corporation, unless the acquisition of
such additional Voting Stock results from one or more
actions or transactions approved by the Board of Directors
of the Corporation. Notwithstanding the foregoing, if the
Board of Directors of the Corporation determines in good
faith that a Person who would otherwise be an "Acquiring
Person" as defined pursuant to the foregoing provisions of
this paragraph (a) has become such inadvertently, and such
Person divests as promptly as practicable (as determined in
good faith by the Board of Directors) a sufficient number of
shares of Common Stock so that such Person would no longer
be an "Acquiring Person" as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person
shall not be deemed an "Acquiring Person" for any purposes
of this Agreement.
(b) "AFFILIATE" shall have the meaning ascribed to such
term in Rule 12b-2 of the General Rules and
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Regulations under the Securities Exchange Act of 1934, as
amended ("EXCHANGE ACT"), as in effect on the date of this
Agreement.
(c) "ASSOCIATE" of a Person shall mean (i) with respect
to a corporation, any officer or director thereof or any
Associate of any Subsidiary thereof, or any Beneficial Owner
of 10% or more of any class of equity security thereof, (ii)
with respect to an association, any officer or director
thereof or any Associate of a Subsidiary thereof, (iii) with
respect to a partnership, any general partner thereof or any
limited partner thereof who is, directly or indirectly, the
Beneficial Owner of a 10% ownership interest therein, and
any Associate of any Subsidiary thereof, (iv) with respect
to a limited liability company, any manager or managing
member thereof and any Beneficial Owner of 10% or more or
any class of membership interest therein or other equity
security thereof, and any Associate of any Subsidiary
thereof, (v) with respect to a business trust, any officer
or trustee thereof or any Associate of any Subsidiary
thereof, (vi) with respect to any other trust or an estate,
any trustee, executor or similar fiduciary and any Person
who has a 15% or greater interest as a beneficiary in the
income from or principal of such trust or estate, (vii) with
respect to a natural person, the parents and children
thereof and any spouse or relative thereof, or any relative
of such spouse, who has the same home as such person, and
(viii) any Affiliate of such Person.
(d) A person shall be deemed the "BENEFICIAL OWNER" of,
or to "BENEFICIALLY OWN", any securities (and correlative
terms shall have correlative meanings):
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly, for purposes of Section 13(d) of the
Exchange Act and Regulations 13D and 13G thereunder (or
any comparable or successor law or regulation), in each
case as in effect on the date hereof; or
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire
(whether such right is exercisable immediately or only
after the passage of time
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or the fulfillment of a condition or both) pursuant to
any agreement, arrangement or understanding, or upon
the exercise of conversion rights, exchange rights,
other rights (other than the Rights), warrants or
options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of,
or to "Beneficially Own", securities tendered pursuant
to a tender or exchange offer made by such Person or
any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or
exchange or (B) the right to vote, alone or in concert
with others, pursuant to any agreement, arrangement or
understanding (whether or not in writing); provided,
however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "Beneficially Own", any
securities if the agreement, arrangement or
understanding to vote such security (1) arises solely
from a revocable proxy or consent given in response to
a proxy or consent solicitation made pursuant to, and
in accordance with, the applicable rules and
regulations under the Exchange Act and (2) is not at
the time reportable by such Person on a Schedule 13D
report under the Exchange Act (or any comparable or
successor report), other than by reference to a proxy
or consent solicitation being conducted by such Person;
or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person
or any of such Person's Affiliates or Associates has
any agreement, arrangement or understanding (whether or
not in writing) for the purpose of acquiring, holding,
voting (except as described in clause (B) of
subparagraph (ii) of this paragraph (d)) or disposing
of any securities of the Corporation; provided,
however, that for purposes of determining Beneficial
Ownership of securities under this Agreement, officers
and directors of the Corporation solely by reason of
their status as such shall not constitute a group
(notwithstanding that they may be Associates of one
another or may be deemed to constitute a group for
purposes of Section 13(d) the Exchange Act) and shall
not be deemed to own shares owned by another officer or
director of the Corporation.
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Notwithstanding anything in this paragraph (d) to the
contrary, (1) a Person engaged in the business of
underwriting securities shall not be deemed the "Beneficial
Owner" of, or to "Beneficially Own," any securities acquired
or otherwise beneficially owned in good faith in a firm
commitment underwriting until the expiration of forty days
after the date of the sale of securities to the public
pursuant to such firm commitment underwriting, and (2) no
Person (and no Affiliate or Associate of any Person) shall
at any time prior to the Divestiture Date be deemed the
"Beneficial Owner" of, or to "Beneficially Own," any
securities if such Person is the "Beneficial Owner" of, or
"Beneficially Owns," such securities as a result of one or
more agreements, arrangements or understandings with any GM
Entity (whether or not the Corporation or any other Person
is a party thereto) and if such Person would not be the
"Beneficial Owner" of, or "Beneficially Own", such
securities if such agreements, arrangements or
understandings were not then in effect.
(e) "BUSINESS DAY" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in
the State of New York or the Commonwealth of Massachusetts
are authorized or obligated by law or executive order to
close.
(f) "CLOSE OF BUSINESS" on any given date shall mean
5:00 P.M., Eastern time, on such date; provided, however,
that if such date is not a Business Day it shall mean 5:00
P.M., Eastern time, on the next succeeding Business Day.
(g) "COMMON STOCK" when used with reference to the
Corporation shall collectively mean the Common Stock, $0.01
par value, of the Corporation and any other common stock of
the Corporation into or for which it is changed, converted
or exchanged. "COMMON STOCK" when used with reference to any
Person other than the Corporation which shall be organized
in corporate form shall mean the capital stock or other
equity security having of all classes of capital stock or
equity securities of such corporation the greatest aggregate
voting power in the election of directors. "COMMON STOCK"
when used with reference to any Person other than the
Corporation which shall not be organized in corporate form
shall mean units of beneficial interest in the profits or
losses of such Person or other equity
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security of such Person having of all classes of equity
securities of such Person the greatest aggregate voting
power in the election of the directors, trustees, managers
or other Persons performing like governance functions for
such Person.
(h) "CORPORATION" shall have the meaning provided at
the beginning hereof; provided, however, that "Corporation"
shall also include any successors to the Corporation as
provided by Section 28 hereof and shall mean a Principal
Party as provided by Section 13(a) hereof.
(i) "DISTRIBUTION DATE" shall have the meaning set
forth in Section 3(b) hereof.
(j) "DIVESTITURE DATE" shall mean the time at which GM
shall first cease to Beneficially Own fifteen (15%) or more
of the Voting Stock of the Corporation then outstanding.
(k) "EXCHANGE ACT" shall have the meaning set forth in
Section 1(b) hereof.
(l) "EXEMPT PERSON" shall mean (i) the Corporation,
(ii) any Subsidiary of the Corporation, (iii) any employee
benefit plan or employee stock plan of the Corporation or
any Subsidiary of the Corporation, or any trust or other
entity organized, appointed, established or holding Voting
Stock for or pursuant to the terms of any such plan, or (iv)
prior to the Divestiture Date, any GM Entity.
(m) "EXERCISE PRICE" shall have the meaning set forth
in Section 4 hereof.
(n) "EXPIRATION DATE" shall have the meaning set forth
in Section 7(a) hereof.
(o) "FAIR MARKET VALUE" of any property shall mean the
fair market value of such property as determined in
accordance with Section 11(b) hereof.
(p) "FINAL EXPIRATION DATE" shall have the meaning set
forth in Section 7(a) hereof.
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(q) "GM" shall mean General Motors Corporation, a
Delaware corporation, and any successor company thereto by
merger, consolidation or a like transaction.
(r) "GM ENTITY" shall mean GM or any Affiliate or
Associate of GM.
(s) "PERSON" shall mean any individual, company, firm,
corporation or other entity.
(t) "PRINCIPAL PARTY" shall have the meaning set forth
in Section 13(b) hereof.
(u) "REDEMPTION PRICE" shall have the meaning set forth
in Section 23(a) hereof.
(v) "RIGHT CERTIFICATE" shall have the meaning set
forth in Section 3(d) hereof.
(w) "STOCK ACQUISITION DATE" shall mean the first date
on which there shall be a public announcement by the
Corporation or an Acquiring Person that an Acquiring Person
has become such (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant
to Section 13(d) of the Exchange Act) or such earlier date
as a majority of the Board of Directors of the Corporation
shall become aware of the existence of an Acquiring Person.
(x) "SUBSIDIARY" of a Person shall mean any corporation
or other entity of which securities or other ownership
interests having voting power sufficient to elect a
majority of the board of directors or other persons
performing similar functions are beneficially owned,
directly or indirectly, by such Person or by any corporation
or other entity that is otherwise controlled by such Person.
(y) "SUMMARY OF RIGHTS" shall have the meaning set
forth in Section 3(a) hereof.
(z) "TRADING DAY" shall have the meaning set forth in
Section 11(b) hereof.
(aa) "TRANSFER TAX" shall mean any tax or charge,
including any documentary stamp tax, imposed or collected
by any governmental or regulatory authority in respect of
any transfer of any security, instrument or
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right, including the Rights, shares of the Common Stock
and shares of the Preferred Stock.
(bb) "VOTING STOCK" shall mean (i) the Common Stock of
the Corporation and (ii) any other shares of capital stock
of the Corporation entitled to vote generally in the
election of directors or entitled generally to vote together
with the Common Stock in respect of a merger, consolidation,
sale of all or substantially all of the Corporation's
assets, liquidation, dissolution or winding up which holders
of Common Stock are entitled to vote on. For purposes of
this Agreement, a stated percentage of the Voting Stock
shall mean a number of shares of the Voting Stock as shall
equal in voting power that stated percentage of the total
voting power of the then outstanding shares of Voting Stock
in the election of a majority of the Board of Directors of
the Corporation or in respect of a merger, consolidation,
sale of all or substantially all of the Corporation's
assets, liquidation, dissolution or winding up.
Any determination required to be made by the Board of Directors of the
Corporation for purposes of applying the definitions contained in this Section 1
shall be made by a majority of the Board of Directors in its good faith
judgment, which determination shall be binding on the Rights Agent and the
holders of the Rights.
Section 2. Appointment of Rights Agent. The Corporation
hereby appoints the Rights Agent to act as agent for the Corporation and the
holders of the Rights (who, in accordance with Section 3 hereof, shall prior to
the Distribution Date be the holders of Common Stock) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts such
appointment. The Corporation may from time to time appoint such Co-Rights Agents
as it may deem necessary or desirable, upon ten (10) days prior written notice
to the Rights Agent. The Rights Agent shall have no duty to supervise, and shall
in no event be liable for, the acts or omissions of any such co-Rights Agent.
Section 3. Issuance of Right Certificates.
(a) On the Record Date (or as soon as practicable
thereafter), the Corporation or the Rights Agent shall send a copy of a Summary
of Rights, in substantially the form attached hereto as Exhibit A (the "SUMMARY
OF RIGHTS"), by first class mail, postage prepaid, to each record holder of the
Common Stock
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as of the Record Date, at the address of such holder shown on the
records of the Corporation.
(b) Until the close of business on the day which is the
earlier of (i) the tenth day after the Stock Acquisition Date or (ii) the tenth
Business Day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than an Exempt Person) of, or
the first public announcement of the intent of any Person (other than an Exempt
Person) to commence, a tender or exchange offer upon the successful consummation
of which such Person would be the Beneficial Owner of 15% or more of the then
outstanding shares of Voting Stock of the Corporation (including any such date
which is after the date of this Agreement and prior to the issuance of the
Rights; the earlier of such dates being herein referred to as the "DISTRIBUTION
DATE"), (x) the Rights shall be evidenced by the certificates for Common Stock
(or in the case of uncertificated shares of Common Stock, by the book-entry
account that evidences record ownership of such shares) registered in the names
of the holders of Common Stock (together with, in the case of certificates for
Common Stock outstanding as of the Record Date, the Summary of Rights) and not
by separate Right certificates and the record holders of such certificates (or
such book-entry accounts) for Common Stock shall be the record holders of the
Rights represented thereby and (y) each Right shall be transferable only
simultaneously and together with the transfer of a share of Common Stock
(subject to adjustment as hereinafter provided). Until the Distribution Date
(or, if earlier, the Expiration Date or Final Expiration Date), the surrender
for transfer of any certificate for Common Stock (or the effectuation of a book
entry transfer of shares of Common Stock) shall constitute the surrender for
transfer of the Right or Rights associated with the Common Stock evidenced
thereby, whether or not accompanied by a copy of the Summary of Rights.
(c) Rights shall be issued in respect of all shares of
Common Stock that become outstanding after the Record Date but prior to the
earliest of the Distribution Date, the Expiration Date or the Final Expiration
Date. Certificates for Common Stock (including, without limitation, certificates
issued upon original issuance, disposition from the Corporation's treasury or
transfer or exchange of Common Stock) after the Record Date but prior to the
earliest of the Distribution Date, the Expiration Date, or the Final Expiration
Date shall have impressed, printed, written or stamped thereon or otherwise
affixed thereto the following legend:
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This certificate also evidences and entitles the holder
hereof to the same number of Rights (subject to adjustment) as
the number of shares of Common Stock represented by this
certificate, such Rights being on the terms provided under the
Rights Agreement between Delphi Automotive Systems Corporation
and BankBoston, N.A. (the "Rights Agent"), dated as of February
1, 1999, as it may be amended from time to time (the
"Agreement"), the terms of which are incorporated herein by
reference and a copy of which is on file at the principal
executive offices of Delphi Automotive Systems Corporation. Under
certain circumstances, as set forth in the Agreement, such Rights
shall be evidenced by separate certificates and shall no longer
be evidenced by this certificate. Delphi Automotive Systems
Corporation shall mail to the registered holder of this
certificate a copy of the Agreement without charge within five
days after receipt of a written request therefor. As provided in
Section 7(e) of the Agreement, Rights issued to or Beneficially
Owned by Acquiring Persons or their Affiliates or Associates (as
such terms are defined in the Agreement) or any subsequent holder
of such Rights shall be null and void and may not be exercised by
or transferred to any Person.
With respect to such certificates containing the foregoing legend, until the
Distribution Date the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby. In the event that the Corporation purchases or
otherwise acquires any Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock shall be deemed
canceled and retired so that the Corporation shall not be entitled to exercise
any Rights associated with the Common Stock which are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend shall not affect
the enforceability of any part of this Agreement or the rights of any holder of
the Rights.
(d) As soon as practicable after the Distribution Date, the
Corporation will prepare and execute, the Rights Agent will countersign, and the
Corporation will send or cause to be sent (and the Rights Agent will, if
requested, send), by first class mail, postage prepaid, to each record holder of
the Common
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Stock as of the close of business on the Distribution Date, as shown by the
records of the Corporation, at the address of such holder shown on such records,
a certificate in the form provided by Section 4 hereof (a "RIGHT CERTIFICATE"),
evidencing one Right (subject to adjustment as provided herein) for each share
of Common Stock so held. As of and after the Distribution Date, the Rights shall
be evidenced solely by Right Certificates and may be transferred by the transfer
of the Right Certificate as permitted hereby, separately and apart from any
transfer of one or more shares of Common Stock.
Section 4. Form of Right Certificates. The Right
Certificates (and the forms of election to purchase shares, certificate and
assignment to be printed on the reverse thereof), when, as and if issued, shall
be substantially in the form set forth in Exhibit B hereto and may have such
marks of identification or designation and such legends, summaries or
endorsements printed thereon as may be required to comply with any law or with
any rule or regulation made pursuant thereto or with any rule or regulation of
any stock exchange on which the Common Stock or the Rights may from time to time
be listed or as the Corporation may deem appropriate to conform to usage or
otherwise and as are not inconsistent with the provisions of this Agreement.
Subject to the provisions of Section 22 hereof, Right Certificates evidencing
Rights whenever issued, (i) shall be dated as of the date of issuance of the
Rights they represent and (ii) subject to adjustment from time to time as
provided herein, on their face shall entitle the holders thereof to purchase
such number of one one-hundredths of a share (including fractional shares which
are integral multiples of one-hundredth of a share) of Preferred Stock as shall
be set forth thereon at the price per one one-hundredth of a share of Preferred
Stock payable upon exercise of a Right provided by Section 7(b) hereof, as the
same may from time to time be adjusted as provided herein (the "EXERCISE
PRICE").
Section 5. Countersignature and Registration.
(a) Each Right Certificate shall be executed on behalf of
the Corporation by its Chairman of the Board, President or any Vice President,
either manually or by facsimile signature, and have affixed thereto the
Corporation's seal or a facsimile thereof which shall be attested by the
Secretary or an Assistant Secretary of the Corporation, either manually or by
facsimile signature. Each Right Certificate shall be countersigned by the Rights
Agent either manually or by facsimile signature and shall not be valid for any
purpose unless so countersigned. In case any officer of the Corporation who
shall have signed any Right
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Certificate shall cease to be such officer of the Corporation before
countersignature by the Rights Agent and issuance and delivery of the
certificate by the Corporation, such Right Certificate, nevertheless, may be
countersigned by the Rights Agent and issued and delivered with the same force
and effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Corporation. Any Right Certificate may be
signed on behalf of the Corporation by any person who, on the date of the
execution of such Right Certificate, shall be a proper officer of the
Corporation to sign such Right 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 one or more offices
designated as the appropriate place for surrender of Right Certificates upon
exercise or transfer, and in such other locations as may be required by law,
books for registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of the
Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 7(e), 7(f) and 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 earlier of the Expiration Date or the
Final Expiration Date, any Right Certificate, may be (i) transferred or (ii)
split up, combined or exchanged for one or more other Right Certificates,
entitling the registered holder to purchase a like number of one one-hundredths
of a share of Preferred Stock as the Right Certificate or Rights Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer, split up, combine or exchange any Right Certificate shall
surrender the Right Certificate at the office of the Rights Agent designated for
the surrender of Right Certificates with the form of certificate and assignment
on the reverse side thereof duly endorsed (or enclose with such Right
Certificate a written instrument of transfer in form satisfactory to the
Corporation and the Rights Agent), duly executed by the registered holder
thereof or his attorney duly authorized in writing, and with such signature duly
guaranteed. Any registered holder desiring to split up, combine or exchange any
Right Certificate shall make
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such request in writing delivered to the Rights Agent, and shall surrender the
Right Certificate to be split up, combined or exchanged at the office of the
Rights Agent designated therefor. Thereupon, the Rights Agent shall countersign
and deliver to the person entitled thereto a Right Certificate or Right
Certificates, as the case may be, as so requested. The Corporation may require
payment of a sum sufficient to cover any Transfer Tax that may be imposed in
connection with any transfer, split up, combination or exchange of any Right
Certificates.
(b) Subject to the provisions of Section 7(e), 7(f) and 14
hereof, at any time after the Distribution Date and prior to the Expiration
Date, upon receipt by the Corporation and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them and, if requested by the Corporation,
reimbursement to the Corporation and the Rights Agent of all reasonable expenses
incidental thereto, or upon surrender to the Rights Agent and cancellation of
the Right Certificate if mutilated, the Corporation shall cause a new Right
Certificate of like tenor to be issued and delivered to the registered owner in
lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Exercise Price; Expira-
tion Date of Rights.
(a) The Rights shall not be exercisable until, and shall
become exercisable on, the Distribution Date (unless otherwise provided herein,
including, without limitation, the restrictions on exercisability set forth in
Section 7(e) and 27(b) hereof). Except as otherwise provided herein, the Rights
may be exercised, in whole or in part, at any time commencing with the
Distribution Date upon surrender of the Right Certificate, with the form of
election to purchase and certificate on the reverse side thereof duly executed
(with signatures duly guaranteed), to the Rights Agent at the principal office
of the Rights Agent at 000 Xxxxxx Xxxxxx, Mail Stop 45-02-62, Xxxxxx,
Xxxxxxxxxxxxx 00000 (as such address may from time to time be changed), together
with payment of the Exercise Price for each Right exercised (as the same may
have been adjusted as hereinafter provided), at or prior to the Close of
Business on the earlier of (i) January 31, 2009 (the "FINAL EXPIRATION DATE") or
(ii) the date on which the Rights are redeemed as provided in Section 23 hereof
or the date on which the Rights are exchanged as provided in Section 27 hereof
(such earlier date being herein referred to as the "EXPIRATION DATE").
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(b) The Exercise Price shall initially be $65 for each one
one-hundredth (1/100) of a share of Preferred Stock issued pursuant to the
exercise of a Right. The Exercise Price and the number of one one-hundredths of
a share of Preferred Stock or other securities or property to be acquired upon
exercise of a Right shall be subject to adjustment from time to time as provided
in Sections 11 and 13 hereof. The Exercise Price shall be payable in lawful
money of the United States of America, in accordance with paragraph (c) below.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights with the form of election to
purchase and certificate duly executed, accompanied by payment by certified
check, cashier's check, bank draft or money order payable to the Corporation or
the Rights Agent of the Exercise Price for the shares of Preferred Stock to be
purchased and an amount equal to any applicable Transfer Tax required to be paid
by the holder of the Right Certificate in accordance with Section 9(e) hereof,
the Rights Agent shall thereupon promptly (i) requisition from any transfer
agent of the Preferred Stock of the Corporation one or more certificates
representing the number of shares of Preferred Stock to be so purchased, and the
Corporation hereby authorizes and directs such transfer agent to comply with all
such requests, (ii) as provided in Section 14(b), at the election of the
Corporation, cause depositary receipts to be issued in lieu of fractional shares
of Preferred Stock, (iii) if the election provided for in the immediately
preceding clause (ii) has not been made, requisition from the Corporation the
amount of cash to be paid in lieu of the issuance of fractional shares (other
than fractions that are integral multiples of one one-hundredth of a share) in
accordance with Section 14(b) hereof, (iv) after receipt of such Preferred Stock
certificates and, if applicable, depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (v) when appropriate, after receipt, promptly deliver such cash to or
upon the order of the registered holder of such Right Certificate; provided,
however, that in the case of a purchase of securities other than Preferred
Stock, pursuant to Section 13 hereof, the Rights Agent shall promptly take the
appropriate actions corresponding in such case to that referred to in the
foregoing clauses (i) through (v) of this Section 7(c). Notwithstanding the
foregoing provisions of this Section 7(c), the Corporation may suspend the
issuance of shares of Preferred Stock and other securities upon exercise of a
Right for a reasonable period, not in excess of 90 days, during which the
Corporation seeks to register under the Securities Act of 1933, as amended (the
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"ACT"), and any applicable securities law of any other jurisdiction, the shares
of Preferred Stock or other securities to be issued pursuant to the Rights;
provided, however, that nothing contained in this Section 7(c) shall relieve the
Corporation of its obligations under Section 9(d) hereof. Upon any such
suspension, the Corporation shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Right
Certificate or his assign, subject to the provisions of Section 14(b) hereof.
(e) Notwithstanding any provision of this Agreement to the
contrary, from and after the time (the "INVALIDATION TIME") when any Person
first becomes an Acquiring Person, any Rights that are Beneficially Owned by (x)
such Acquiring Person (or any Associate or Affiliate of such Acquiring Person),
(y) a transferee of such Acquiring Person (or any such Associate or Affiliate)
who becomes a transferee after the invalidation time or (z) a transferee of such
Acquiring Person (or any such Associate or Affiliate) who becomes a transferee
prior to or concurrently with the invalidation time pursuant to either (I) a
transfer from the Acquiring Person (or any such Associate or Affiliate) to
holders of its equity securities or to any Person with whom it has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (II) a transfer which the Board of Directors has determined is part of
a plan, arrangement or understanding which has the purpose or effect of avoiding
the provisions of this Section 7(e), and subsequent transferees of such Persons
referred to in clause (y) and (z) above, shall be null and void without any
further action and any holder of such Rights shall thereafter have no rights
whatsoever with respect to such Rights under any provision of this Agreement.
The Corporation shall use all reasonable efforts to ensure that the provisions
of this Section 7(e) are complied with, but shall have no liability to any
holder of Right Certificates or any other Person as a result of its failure to
make any determination with respect to an Acquiring Person or its Affiliates,
Associates or transferees hereunder. No Right Certificate shall be issued
pursuant to Section 3 hereof that represents Rights beneficially owned by an
Acquiring Person or any Affiliate or Associate thereof whose Rights would be
null and void pursuant to the provisions of this Section 7(e); no Right
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Certificate shall be issued at any time upon the transfer of any Rights to an
Acquiring Person (or an Affiliate or Associate of such Acquiring Person) whose
Rights would be null and void pursuant to the provisions of this Section 7(e) or
any Associate or Affiliate thereof or to any nominee of such Acquiring Person,
Associate or Affiliate; and any Right Certificate delivered to the Rights Agent
for transfer to an Acquiring Person (or an Associate or Affiliate of such
Acquiring Person) whose Rights would be void pursuant to the provisions of this
Section 7(e) shall be cancelled.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Corporation shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) completed and signed the certificate following the form of
election to purchase set forth on the reverse side of the Right Certificate
surrendered for such exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Corporation shall reasonably request.
Section 8. Cancellation and Destruction of Right
Certificates. All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Corporation or to 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 Right Certificates shall be issued in lieu thereof
except as expressly permitted by any of the provisions of this Agreement. The
Corporation shall deliver to the Rights Agent for cancellation and retirement,
and the Rights Agent shall cancel and retire, any Right Certificate purchased or
acquired by the Corporation otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Right Certificates to the Corporation, or
shall, at the written request of the Corporation, destroy such cancelled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Corporation.
Section 9. Reservation and Availability of Shares of
Preferred Stock.
(a) The Corporation covenants and agrees that it will cause
to be reserved and kept available out of the authorized and unissued shares of
preferred stock, $0.10 par value per share, of the Corporation or out of
authorized and issued shares of Preferred Stock held in its treasury, such
number of shares of
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Preferred Stock as will from time to time be sufficient to permit the exercise
in full of all outstanding Rights.
(b) The Corporation shall use its best efforts to cause,
from and after such time as the Rights become exercisable, all shares of
Preferred Stock issued or reserved for issuance in accordance with this
Agreement to be listed, upon official notice of issuance, upon the principal
national securities exchange, if any, upon which the Common Stock is listed or,
if the principal market for the Common Stock is not on any national securities
exchange, to be eligible for quotation in the National Association of Securities
Dealers' Automated Quotation System or any successor thereto or other comparable
quotation system.
(c) The Corporation covenants and agrees that it will take
all such action as may be necessary to ensure that all shares of Preferred Stock
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Exercise Price in
respect thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(d) The Corporation shall use its best efforts to (i) file,
as soon as practicable following the occurrence of the event described in
Section 11(a)(ii), or as soon as is required by law following the Distribution
Date, as the case may be, a registration statement under the Act, with respect
to the shares of Preferred Stock purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as
soon as practicable after such filing, and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (a) the date as of which the
Rights are no longer exercisable for Preferred Stock and (b) the earlier of the
Expiration Date and the Final Expiration Date. The Corporation may temporarily
suspend, for a period of time not to exceed ninety days, the issuance of shares
of Preferred Stock upon exercise of a Right in order to prepare and file a
registration statement under the Act and permit it to become effective. The
Corporation will also take such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. Notwithstanding any provision
of this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained and until a registration statement under the Act (if required)
shall have been declared effective.
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(e) The Corporation covenants and agrees that it will pay
when due and payable any and all federal and state Transfer Taxes which may be
payable in respect of the issuance or delivery of the Right Certificates or of
any shares of Preferred Stock issued or delivered upon the exercise of Rights.
The Corporation shall not, however, be required to pay any Transfer Tax which
may be payable in respect of any transfer or delivery of a Right Certificate to
a Person other than, or the issuance or delivery of certificates for Preferred
Stock upon exercise of Rights in a name other than that of, the registered
holder of the Right Certificate, and the Corporation shall not be required to
issue or deliver a Right Certificate or certificate for Preferred Stock to a
Person other than such registered holder until any such Transfer Tax shall have
been paid (any such Transfer Tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Corporation's satisfaction that no such Transfer Tax is due.
(f) The requirements of this Section 9 shall apply to shares
of Common Stock of the Corporation if the Corporation has elected in accordance
with Section 11(a)(iii) hereof to substitute shares of Common Stock for shares
of Preferred Stock that otherwise may be purchased upon the exercise of Rights.
Section 10. Preferred Stock Record Date. Each Person in
whose name any certificate for shares of Preferred Stock is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of the Preferred Stock represented thereby on, and such certificate shall
be dated as of, the date upon which the Right Certificate evidencing such Rights
was duly surrendered and payment of the Exercise Price (and any applicable
Transfer Taxes) was made; provided, however, that, if the date of such surrender
and payment is a date upon which the Preferred Stock transfer books of the
Corporation are closed, such Person shall be deemed to have become the record
holder of such shares on, and such certificate shall be dated as of, the next
succeeding Business Day on which the Preferred Stock transfer books of the
Corporation are open.
Section 11. Adjustment of Exercise Price or Number of
Shares. The Exercise Price and the number of shares of Preferred Stock which may
be purchased upon exercise of a Right are subject to adjustment from time to
time as provided in this Section 11.
(a) (i) In the event the Corporation shall at any time after
the date of this Agreement (A) declare or pay any dividend
on Common Stock payable in shares of Common Stock, (B)
subdivide or split the outstanding
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shares of Common Stock into a greater number of shares or
(C) combine or consolidate the outstanding shares of Common
Stock into a smaller number of shares or effect a reverse
split of the outstanding shares of Common Stock, then and in
each such event the number of one one-hundredths of a share
of Preferred Stock issuable upon the Exercise of a Right
after the record date for such event (if one shall have been
established or, if not, after the date of such event) shall
be the number of one one-hundredths of a share of Preferred
Stock issuable immediately prior to such event multiplied by
a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately prior to such event
and the denominator of which is the number of shares of
Common Stock outstanding immediately after such event and
the Exercise Price to be in effect after the record date for
such event (if one shall have been established or, if not,
after the date of such event) shall be determined by
multiplying the Exercise Price in effect immediately prior
to such event by such fraction. 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).
(ii) Subject to Section 27 of this Agreement, in the
event that any Person shall become an Acquiring Person,
then, except as otherwise provided in this Section 11, each
holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive upon
exercise of such Right in accordance with the terms of this
Agreement and payment of the Exercise Price, such number of
one one-hundredths of a share of Preferred Stock as shall
equal the result obtained by (1) multiplying the then
current Exercise Price by the number of one one-hundredths
of a share of Preferred Stock for which a Right is then
exercisable and dividing the product by (2) 50% of the per
share Fair Market Value of the Preferred Stock (determined
pursuant to Section 11(b) hereof) on the date of such
occurrence.
(iii) In the event that the Corporation does not have
available sufficient authorized but unissued Preferred Stock
to permit the exercise in full of the Rights in accordance
with the foregoing subparagraph
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(ii), the Corporation shall take all such action as may be
necessary to authorize and reserve for issuance such number
of additional shares of Preferred Stock as may from time to
time be required to be issued upon the exercise in full of
all Rights from time to time outstanding and, if necessary,
shall use its best efforts to obtain stockholder approval
thereof. In lieu of issuing shares of Preferred Stock in
accordance with the foregoing subparagraph (ii), the
Corporation may, if the Board of Directors determines that
such action is necessary or appropriate and not contrary to
the interests of holders of Rights, elect to issue or pay,
upon the exercise of the Rights, cash, property, shares of
Preferred or Common Stock, or any combination thereof,
having an aggregate Fair Market Value equal to the Fair
Market Value of the shares of Preferred Stock which
otherwise would have been issuable pursuant to Section
11(a)(ii), which Fair Market Value shall be determined by an
investment banking firm selected by the Board of Directors.
For purposes of the preceding sentence, the Fair Market
Value of the Preferred Stock shall be as determined pursuant
to Section 11(b). Subject to Section 23 hereof, any such
election by the Board of Directors of the Corporation must
be made and publicly announced within thirty (30) days after
the date on which the event described in Section 11(a)(ii)
occurs.
(b) For the purpose of this Agreement, the "FAIR MARKET
VALUE" of any share of Preferred Stock, Common Stock or any other stock or any
Right or other security or any other property on any date shall be determined as
provided in this Section 11(b). In the case of a publicly traded stock or other
security, the Fair Market Value on any date shall be deemed to be the average of
the daily closing prices per share of such stock or per unit of such other
security for the 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to such date; provided, however, that in the event
that the Fair Market Value per share of any share of Common Stock is determined
during a period which includes any date that is within 30 Trading Days after (i)
the ex-dividend date for a dividend or distribution on such stock payable in
shares of Common Stock or securities convertible into shares of Common Stock,
or (ii) the effective date of any subdivision, split, combination,
consolidation, reverse stock split or reclassification of such stock, then, and
in each such case, the Fair Market Value shall be appropriately adjusted by the
Board of Directors of the Corporation to take into account ex-dividend or
post-effective date trading. The
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closing price for any day shall be the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and asked
prices, regular way (in either case, as reported in the applicable transaction
reporting system with respect to securities listed or admitted to trading on the
New York Stock Exchange), or, if the securities are not listed or admitted to
trading on the New York Stock Exchange, as reported in the applicable
transaction reporting system with respect to securities listed on the principal
national securities exchange on which such security is listed or admitted to
trading; or, if not listed or admitted to trading on any national securities
exchange, the last quoted price (or, if not so quoted, the average of the high
bid and low asked prices) in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System
("NASDAQ") or such other system then in use; or, if no bids for such security
are quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in such
security selected by the Board of Directors of the Corporation. The term
"TRADING DAY" shall mean a day on which the principal national securities
exchange on which such security is listed or admitted to trading is open for the
transaction of business or, if such security is not listed or admitted to
trading on any national securities exchange, a Business Day. If a security is
not publicly held or not so listed or traded, "Fair Market Value" shall mean the
fair value per share of stock or per other unit of such other security, as
determined by an independent investment banking firm experienced in the
valuation of securities selected in good faith by the Board of Directors of the
Corporation, or, if no such investment banking firm is, in the good faith
judgment of the Board of Directors, available to make such determination, in
good faith by the Board of Directors of the Corporation; provided, however, that
for purposes of making the adjustment provided for by Section 11(a)(ii) hereof,
the Fair Market Value of a share of Preferred Stock shall not be less than 100%
of the product of the Fair Market Value of a share of Common Stock multiplied by
the higher of the then Dividend Multiple or Vote Multiple applicable to the
Preferred Stock (as defined in the Certificate of Designations relating to the
Preferred Stock) and shall not exceed 105% of the product of the then Fair
Market Value of a share of Common Stock multiplied by the higher of the then
Dividend Multiple or Vote Multiple applicable to the Preferred Stock. In the
case of property other than securities, the "Fair Market Value" thereof shall be
determined in good faith by the Board of Directors of the Corporation based upon
such appraisals or valuation reports of such independent experts as the Board of
Directors of the Corporation shall in good faith determine to be
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appropriate in accordance with good business practices and the interests of the
holders of Rights. Any such determination of Fair Market Value shall be
described in a statement filed with the Rights Agent and shall be binding upon
the Rights Agent.
(c) In case the Corporation shall fix a record date for the
issuance of rights, options or warrants to all holders of Common Stock entitling
them (for a period expiring within 45 calendar days after such record date) to
subscribe for or purchase Common Stock or securities convertible into Common
Stock at a price per share (or having a conversion price per share, if a
security convertible into Common Stock) less than the then current per share
Fair Market Value of the Common Stock on such record date, the Exercise Price to
be in effect after such record date shall be determined by multiplying the
Exercise Price in effect immediately prior to such record date by a fraction,
the numerator of which shall be the number of shares of Common Stock outstanding
on such record date plus the number of shares of Common Stock which the
aggregate offering price of the total number of shares of Common Stock so to be
offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current Fair Market Value
and the denominator of which shall be the number of shares of Common Stock
outstanding on such record date plus the number of additional shares of Common
Stock 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 in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Corporation, whose
determination shall be described in a statement filed with the Rights Agent.
Shares of Common Stock owned by or held for the account of the Corporation 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
Exercise Price shall be adjusted to be the Exercise Price which would then be in
effect if such record date had not been fixed.
(d) In case the Corporation shall fix a record date which is
subsequent to the 270th day after the initial issuance of Rights for the making
of a distribution to all holders of the Common Stock (including any such
distribution made in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend not in excess
of 150% of the previous regular quarterly cash
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dividend out of the earnings or retained earnings of the Corporation), assets
(other than a dividend payable in shares of Common Stock) or subscription rights
or warrants (excluding those referred to in Section 11(c) hereof), the Exercise
Price to be in effect after such record date shall be determined by multiplying
the Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Fair Market Value of the shares of
Common Stock on such record date, less the fair market value (as determined in
good faith by the Board of Directors of the Corporation, whose determination
shall be described in a statement filed with the Rights Agent) of the portion of
the assets or evidences of indebtedness so to be distributed or of such
subscription rights or warrants applicable to one share of Common Stock and the
denominator of which shall be such current Fair Market Value of the shares of
Common Stock. Such adjustment shall be made successively whenever such a record
date is fixed and in the event that such distribution is not so made, the
Exercise Price shall again be adjusted to be the Exercise Price which would then
be in effect if such record date had not been fixed.
(e) Unless the Corporation shall have exercised its election
as provided in Section 11(f), upon each adjustment of the Exercise Price as a
result of the calculations made in Section 11(c) and (d), each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Exercise Price, that number of one
one-hundredths of a share of Preferred Stock obtained by (i) multiplying (x) the
number of one one-hundredths of a share of Preferred Stock that could be
purchased upon exercise of a Right immediately prior to the adjustment pursuant
to this Section 11(e) by (y) the Exercise Price in effect immediately prior to
such adjustment of the Exercise Price and (ii) dividing the product so obtained
by the Exercise Price in effect immediately after such adjustment of the
Exercise Price.
(f) The Corporation may elect on or after the date of any
adjustment of the Exercise Price pursuant to Section 11(c) and 11(d) to adjust
the number of Rights in substitution for any adjustment pursuant to Section
11(e) in the number of one one-hundredths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-hundredths 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 obtained by dividing the Exercise Price in effect immediately
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prior to adjustment of the Exercise Price by the Exercise Price in effect
immediately after adjustment of the Exercise Price. The Corporation shall make a
public announcement 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 Exercise
Price is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the public
announcement. If the Right Certificates have been issued, upon each adjustment
of the number of Rights pursuant to this Section 11(e), the Corporation shall,
as promptly as practicable, cause to be distributed to holders of record of
Right Certificates on such record date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights, if any, to which such holders shall be
entitled as a result of such adjustment, or, at the option of the Corporation,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Corporation, new
Right Certificates evidencing all the Rights to which such holders shall be
entitled after such adjustment. Right Certificates so to be distributed shall be
issued, executed and countersigned in the manner provided for herein and shall
be registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
(g) All calculations under this Section 11 shall be made to
the nearest cent or to the nearest one one-hundredth of a share, as the case may
be.
(h) Irrespective of any adjustment or change in the Exercise
Price or the number of shares of Preferred Stock issuable upon the exercise of
the Rights, the Right Certificates theretofore and thereafter issued may
continue to express the Exercise Price and the number of shares to be issued
upon exercise of the Rights as in the initial Right Certificates issued
hereunder but, nevertheless, shall represent the Rights as so adjusted.
(i) Before taking any action that would cause an adjustment
reducing the purchase price per whole share of Preferred Stock upon exercise of
the Rights below the then par value, if any, of the shares of Preferred Stock,
the Corporation shall use its best efforts to take any corporate action which
may, in the opinion of its counsel, be necessary in order that the Corporation
may validly and legally issue fully paid and non-
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assessable shares of such Preferred Stock at such adjusted purchase price per
share.
(j) Anything in this Section 11 to the contrary
notwithstanding, in the event of any reclassification of stock of the
Corporation or any recapitalization, reorganization or partial liquidation of
the Corporation or similar transaction, the Corporation shall be entitled to
make such further adjustments in the number of shares of Preferred Stock which
may be acquired upon exercise of the Rights, and such adjustments in the
Exercise Price therefor, in addition to those adjustments expressly required by
the other paragraphs of this Section 11, as the Board of Directors of the
Corporation shall determine to be necessary or appropriate in order for the
holders of the Rights in such event to be treated equitably and in accordance
with the purpose and intent of this Agreement or in order that any such event
shall not, but for such adjustment, in the opinion of counsel to the
Corporation, result in the stockholders of the Corporation being subject to any
United States federal income tax liability by reason thereof.
(k) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become entitled
to receive any shares of capital stock of the Corporation other than the
Preferred Stock, thereafter the Exercise Price and the number of such other
shares so receivable upon exercise of a Right 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), 11(c), 11(e), 11(f) and 11(j) hereof, as applicable, and the provisions
of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock shall
apply on like terms to any such other shares.
Section 12. Certification of Adjusted Exercise Price or
Number of Shares. Whenever an adjustment is made as provided in Section 11, 13,
23 or 27, the Corporation shall (a) promptly prepare a certificate setting forth
such adjustment, and a brief statement of the facts giving rise to 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 holder of a Right Certificate in accordance with Section 25.
Notwithstanding the foregoing sentence, the failure of the Corporation to make
such certification or give such notice shall not affect the validity of or the
force or effect of the requirement for such adjustment. Any adjustment to be
made pursuant to Section 11, 13 or 23(c) of this Agreement shall be effective as
of the date of the event
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giving rise to 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 adjustment unless and until it
shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer
of Assets or Earning Power.
(a) In the event that, at any time after the time
that any Person becomes an Acquiring Person, (x) the Corporation shall, directly
or indirectly, consolidate with, or merge with and into, any other Person or
Persons (other than an Exempt Person) and the Corporation shall not be the
surviving or continuing corporation of such consolidation or merger, or (y) any
Person or Persons (other than an Exempt Person) shall, directly or indirectly,
consolidate with, or merge with and into, the Corporation, and the Corporation
shall be the continuing or surviving corporation of such consolidation or merger
and, in connection with such consolidation or merger, all or part of the
outstanding shares of Common Stock shall be changed or converted into or
exchanged for stock or other securities of any other Person (other than an
Exempt Person) or of the Corporation or cash or any other property, or (z) the
Corporation or one or more of its Subsidiaries shall, directly or indirectly,
sell or otherwise transfer to any other Person (other than an Exempt Person), in
one or more transactions, assets or earning power aggregating more than 50% of
the assets or earning power of the Corporation and its Subsidiaries (taken as a
whole), then, on the first occurrence of any such event, proper provision shall
be made so that (i) each holder of record of a Right, except as provided in
Section 7(e) hereof, shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Exercise Price multiplied
by the number of one one-hundredths of a share of Preferred Stock for which a
Right is then exercisable, in accordance with the terms of this Agreement and in
lieu of shares of Preferred Stock, such number of shares of validly issued,
fully paid, non-assessable and freely tradeable Common Stock of the Principal
Party (as defined in Section 13(b) hereof), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as shall equal
the result obtained by (1) multiplying the then current Exercise Price by the
number of one one-hundredths of a share of Preferred Stock for which a Right is
then exercisable and dividing that product by (2) 50% of the then per share Fair
Market Value of the Common Stock of the Principal Party on the date of the
consummation, merger, sale or transfer; provided, however, that the Exercise
Price (as adjusted) and the number of shares of
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Common Stock of such Principal Party so receivable upon exercise of a Right
shall be subject to further adjustment as appropriate in accordance with Section
11 hereof to reflect any events occurring in respect of the Common Stock of such
Principal Party after the occurrence of such consolidation, merger, sale or
transfer; (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Corporation pursuant to this Agreement; (iii) the
term "Corporation" for all purposes of this Agreement shall thereafter be deemed
to refer to such Principal Party; (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock in accordance with the provisions of Section 9 hereof
applicable to the reservation of Preferred Stock) in connection with such
consummation as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
shares of Common Stock thereafter deliverable upon the exercise of the Rights;
provided, however, that, upon the subsequent occurrence of any merger,
consolidation, sale of all or substantially all of the assets, recapitalization,
reclassification of shares, reorganization or other extraordinary transaction in
respect of such Principal Party, each holder of a Right shall thereupon be
entitled to receive, upon exercise of a Right and payment of the Exercise Price,
such cash, shares, rights, warrants and other property which such holder would
have been entitled to receive had it, at the time of such transaction, owned the
shares of Common Stock of the Principal Party purchasable upon the exercise of a
Right, and such Principal Party shall take such steps (including, but not
limited to, reservation of shares of stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms hereof for such
cash, shares, rights, warrants and other property; and (v) the provisions of
Section 11(a)(ii) hereof shall be of no effect following the occurrence of any
event described in clause (x), (y) or (z) above of this Section 13(a).
(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 the securities into
which shares of Common Stock of the Corporation are changed
or otherwise exchanged or converted in such merger or
consolidation, or, if there is more than one such issuer,
the issuer of the Common Stock of which has the greatest
market value or (B) if
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no securities are so issued, (I) the Person that is the
other party to the merger or consolidation and that survives
such merger or consolidation, or, if there is more than one
such Person, the Person the Common Stock of which has the
greatest market value or (II) if the Person that is the
other party to the merger or consolidation does not survive
the merger or consolidation, the Person that does survive
the merger or consolidation (including the Corporation if it
survives); and
(ii) in the case of any transaction described in clause
(z) of the first sentence in Section 13(a), the Person that
is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the
assets or earning power so transferred or if the Person
receiving the greatest portion of the assets or earning
power cannot be determined, whichever of such Persons as is
the issuer of Common Stock having the greatest market value
of shares outstanding;
provided, however, that in any such case, 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, then (1) if such Person
is a direct or indirect Subsidiary of another Person the Common Stock of which
is and has been so registered, the term "Principal Party" shall refer to such
other Person, or (2) if such Person is a Subsidiary, directly or indirectly, of
more than one Person, the Common Stocks of all of which are and have been so
registered, the term "Principal Party" shall refer to whichever of such Persons
is the issuer of the Common Stock having the greatest market value of shares
outstanding, or (3) if 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 clauses (1) and (2) above
shall apply to each of the owners having an interest in the venture as if the
Person owned by the joint venture was a Subsidiary of both or all of such joint
venturers, and the Principal Party in each such case shall bear the obligations
set forth in this Section 13 in the same ratio as its interest in such Person
bears to the total of such interests.
(c) The Corporation shall not consummate any consolidation,
merger or sale or transfer of assets or earning power
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referred to in Section 13(a) unless the Principal Party shall have a sufficient
number of authorized shares of its Common Stock that have not been issued or
reserved for issuance to permit exercise in full of all Rights in accordance
with this Section 13 and unless prior thereto the Corporation and the Principal
Party involved therein shall have executed and delivered to the Rights Agent an
agreement confirming that the Principal Party shall, upon consummation of such
consolidation, merger or sale or transfer of assets or earning power, assume
this Agreement in accordance with Section 13(a) hereof and that all rights of
first refusal or preemptive rights in respect of the issuance of shares of
Common Stock of the Principal Party upon exercise of outstanding Rights have
been waived and that such transaction shall not result in a default by the
Principal Party under this Agreement, and further providing that, as soon as
practicable after the date of any consolidation, merger or sale or transfer of
assets or earning power referred to in Section 13(a) hereof, the Principal Party
will:
(i) prepare and file a registration statement under the
Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate
form, use its best efforts to cause such registration
statement to become effective as soon as practicable after
such filing and use its best efforts to cause such
registration statement to remain effective (with a
prospectus at all times meeting the requirements of the Act)
until the date of expiration of the Rights, and similarly
comply with applicable state securities laws;
(ii) use its best efforts to list (or continue the
listing of) the Rights and the securities purchasable upon
exercise of the Rights on a national securities exchange or
to meet the eligibility requirements for quotation on
NASDAQ;
(iii) deliver to holders of the Rights historical
financial statements for the Principal Party which comply
in all respects with the requirements for registration on
Form 10 (or any successor form) under the Exchange Act. In
the event that any of the transactions described in Section
13(a) hereof shall occur at any time after the occurrence of
a transaction described in Section 11(a)(ii) hereof, the
Rights which have not theretofore been exercised shall,
subject to the provisions of Section 7(e) hereof, thereafter
be
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exercisable in the manner described in Section 13(a);
and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the
Principal Party subject to purchase upon exercise of
outstanding Rights.
(d) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its Certificate of Incorporation or By-laws or other
instrument governing its affairs, which provision would have the effect of (i)
causing such Principal Party to issue, in connection with, or as a consequence
of, the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then Fair Market Value per
share (determined pursuant to Section 11(b) hereof) or securities exercisable
for, or convertible into, Common Stock of such Principal Party at less than such
then Fair Market Value (other than to holders of Rights pursuant to this Section
13) or (ii) providing for any special tax or similar payment in connection with
the issuance to any holder of a Right of Common Stock of such Principal Party
pursuant to the provisions of this Section 13, then, in such event, the
Corporation shall not consummate any such transaction unless prior thereto the
Corporation and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in question
of such Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The Corporation covenants and agrees that it shall not,
at any time after any Person becomes an Acquiring Person, enter into any
transaction of the type described in clauses (x) through (z) of the first
sentence of Section 13(a) hereof if (i) at the time of or immediately after such
consolidation, merger, sale, transfer or other transaction there are any rights,
warrants or other instruments or securities outstanding or agreements in effect
which would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights, (ii) prior to, simultaneously with or immediately
after such consolidation, merger, sale, transfer or other transaction, the
stockholders of the Person who constitutes, or would constitute, the Principal
Party for purposes of Section 13(a) hereof shall have received a distribution of
Rights previously
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owned by such Person or any of its Affiliates or Associates or (iii) the form or
nature of organization of the Principal Party would preclude or limit the
exercisability of the Rights.
Section 14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue fractions
of Rights or to distribute Right Certificates which evidence fractional Rights
(i.e., Rights to acquire less than one one-hundredth of a share of Preferred
Stock), unless such fractional Rights result from a transaction referred to in
Section 11(a)(i) or 11(f) hereof. If the Corporation shall determine not to
issue such fractional Rights, then, in lieu of such fractional Rights, there
shall be paid to the holders of record of the Right Certificates with regard to
which such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the Fair Market Value of a whole Right.
(b) The Corporation shall not be required to issue fractions
of shares of Preferred Stock (other than fractions that are integral multiples
of one one-hundredth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions that are
integral multiples of one one-hundredth of a share). In lieu of issuing
fractions of shares of Preferred Stock, the Corporation may, at its election,
issue depositary receipts evidencing fractions of shares pursuant to an
appropriate agreement between the Corporation and a depositary selected by it,
provided that such agreement shall provide that the holders of such depositary
receipts shall have all of the rights, privileges and preferences to which they
would be entitled as owners of the Preferred Stock. With respect to fractional
shares that are not integral multiples of one one-hundredth of a share, if the
Corporation does not issue such fractional shares or depositary receipts in lieu
thereof, there shall be paid to the holders of record of Right Certificates at
the time such Right Certificates are exercised as herein provided an amount in
cash equal to the same fraction of the Fair Market Value of a share of Preferred
Stock.
(c) The holder of a Right by the acceptance of a Right
expressly waives his right to receive any fractional Right or any fractional
shares of Preferred Stock (other than fractions which are integral multiples of
one one-hundredth of a share) upon exercise of a Right.
Section 15. Rights of Action. All rights of action in
respect of this Agreement, except the rights of action given to
the Rights Agent in Section 18 hereof, are vested in the
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respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the holders of record of the Common Stock); and any holder of
record of any Right Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Rights Agent or of the holder of any
other Right Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Corporation to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate in the manner provided in such Right
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 will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Each holder of a
Right, by accepting the same, consents and agrees with the Corporation and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be
evidenced by the certificates for Common Stock (or in the case of
uncertificated shares of Common Stock, by the book-entry account
that evidences record ownership of such shares) registered in the
name of the holders of Common Stock (together, as applicable,
with the Summary of Rights), which certificates for Common Stock
(or book-entry account) shall also constitute certificates for
Rights, and not by separate Right Certificates, and each Right
shall be transferable only simultaneously and together with the
transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office of the Rights Agent designated for such
purpose, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Corporation and the Rights Agent may deem and treat
the Person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate or, in
the case of uncertificated shares of Common Stock, the book-entry
account evidencing record
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ownership of such shares) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any
notations of ownership or writing on the Right Certificates or
the associated Common Stock certificate made by anyone other than
the Corporation or the Rights Agent) for all purposes whatsoever,
and neither the Corporation nor the Rights Agent shall be
affected by any notice to the contrary.
Section 17. Right Certificate Holder Not Deemed a
Stockholder. No holder, as such, of any Right Certificate shall be entitled to
vote, receive dividends or be deemed for any purpose the holder of Preferred
Stock or any other securities which may at any time be issuable on the exercise
of the Rights represented thereby, nor shall anything contained herein or in
any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder or other securityholder
of the Corporation or of a securityholder of any other Person or any right to
vote for the election of directors or upon any matter submitted to stockholders
at any meeting thereof, or to give or withhold consent to any corporate action
or securityholder action, or to receive notice of meetings or other actions
affecting stockholders or securityholders (except as provided in Section 24
hereof), or to receive dividends or subscription rights, or otherwise, except in
any such case the rights, if any, in respect thereof provided by this Agreement,
until the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof for such stock or other
security.
Section 18. Concerning the Rights Agent.
(a) The Corporation agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Corporation also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
anything done or omitted to be done by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the cost and expenses
of defending against any claim of liability relating to the Rights or this
Agreement.
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(b) The Rights Agent shall be protected against, and shall
incur no liability for or in respect of, any action taken, suffered or omitted
by it in connection with its administration of this Agreement in reliance upon
any Right Certificate or certificate for Preferred Stock or for other securities
of the Corporation, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement or other paper or document believed by it to be genuine and to be
signed, executed and, where necessary, verified or acknowledged, by the proper
person or persons.
Section 19. Merger or Consolidation of, or Change in Name
of, the 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 that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement any of the Rights
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; in case at
that time any of the Right Certificates shall not have been countersigned, the
Rights Agent may countersign such Right Certificates either in its prior name or
in its changed name; in all such cases such
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Right Certificates shall have the full force provided in the Right 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 Corporation and the holders
of Right Certificates by their acceptance thereof shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Corporation), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Corporation 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 or any Vice President and by the Treasurer, Secretary or any Assistant
Secretary of the Corporation and delivered to the Rights Agent. Any such
certificate shall be full authorization to the Rights Agent for any action taken
or suffered in good faith by it under the provisions of this Agreement in
reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith or willful misconduct. Anything to the contrary
notwithstanding, in no event shall the Rights Agent be liable for special,
indirect, consequential or incidental loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent has been
advised of the likelihood of such loss or damage.
(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
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Corporation 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
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any Right Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Corporation of any covenant or condition
contained in this Agreement or in any Right Certificate; nor shall it be
responsible for any adjustment required under the provisions of Section 11 or 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 Right
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 Preferred Stock to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
shares of Preferred Stock will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Corporation 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 the 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 or any Vice President or the Secretary
or the Treasurer of the Corporation, 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 or for any delay in acting while waiting for
those instructions. Any application by the Rights Agent for written instructions
from the Corporation may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the Rights Agent under
this Agreement and the date on and/or after which such action shall be taken or
such omission shall be effective. The Rights Agent shall not be liable for any
action taken by, or omission of, the Rights Agent in accordance with a proposal
included in any such application on or after the date specified in such
application (which date shall not be less than five Business Days after the date
any officer of the Corporation actually receives such application unless any
such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written
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instructions in response to such application specifying the action to be taken
or omitted.
(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 Corporation or become pecuniarily interested in any
transaction in which the Corporation may be interested, or contract with or lend
money to the Corporation or otherwise act as fully and freely as though it were
not the Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Corporation 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 Corporation resulting from any
such act, default, neglect or misconduct, provided reasonable care was exercised
in the selection and continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate contained in the
form of assignment or the form of election to purchase set forth on the reverse
thereof, as the case may be, has not been completed to certify the holder is not
an Acquiring Person (or an Affiliate or Associate thereof), a Rights Agent shall
not take any further action with respect to such requested exercise or transfer
without first consulting with the Corporation.
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 Corporation and to each
transfer agent of the Common Stock and the Preferred Stock by registered or
certified mail. The Corporation may remove the Rights Agent or any successor
Rights Agent (with or without cause) 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 the Preferred Stock by registered or
certified mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Corporation shall appoint a successor
to the Rights Agent. Notwithstanding the foregoing provisions of this Section
21, in no event shall the resignation or removal of a Rights Agent be effective
until a successor Rights Agent shall have been appointed and have
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accepted such appointment. If the Corporation shall fail to make such
appointment within a period of 30 days after such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right Certificate (who shall,
with such notice, submit his Right Certificate for inspection by the
Corporation), then the incumbent Rights Agent or the holder of record of any
Right Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Corporation or by such a court, shall be (a) a corporation organized and
doing business under the laws of the United States or of any state thereof, in
good standing, which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or examination in the
conduct of its corporate trust or stock transfer business by federal or state
authorities and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $5,000,000 or (b) an Affiliate
controlled by 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 transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Corporation shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Stock and
Preferred Stock, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 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. Notwithstanding the foregoing
provisions, in the event of resignation, removal or incapacity of the Rights
Agent, the Corporation shall have the authority to act as the Rights Agent until
a successor Rights Agent shall have assumed the duties of the Rights Agent
hereunder.
Section 22. Issuance of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to the
contrary, the Corporation may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors to
reflect any adjustment or change in the Exercise Price per share and the number
or kind or class of shares of stock or other securities or property
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purchasable under the Right Certificates made in accordance with the provisions
of this Agreement. In addition, in connection with the issuance or sale of
Voting Stock following the Distribution Date and prior to the Expiration Date,
the Corporation may with respect to shares of Voting Stock so issued or sold
pursuant to (i) the exercise of stock options, (ii) under any employee plan or
arrangement, (iii) upon the exercise, conversion or exchange of securities,
notes or debentures issued by the Corporation or (iv) a contractual obligation
of the Corporation, in each case existing prior to the Distribution Date, issue
Rights Certificates representing the appropriate number of Rights in connection
with such issuance or sale.
Section 23. Redemption.
(a) The Corporation may, at its option, but only by the vote
of a majority of the Board of Directors (determined as if there were no
vacancies), redeem all but not less than all of the then outstanding Rights at
any time prior to the Close of Business on the tenth day following the Stock
Acquisition Date at a redemption price of $.01 per Right, subject to adjustments
as provided in Section 23(c) (the "REDEMPTION PRICE"). The redemption of the
Rights by the Board of Directors may be made effective at such time after the
Board's action to redeem the Rights on such basis and subject to such
conditions, as the Board of Directors in its absolute discretion may establish.
(b) Without any further action and without any notice, the
right to exercise the Rights will terminate effective at the time so designated
by action of the Board of Directors ordering the redemption of the Rights and
the only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Within 10 days after the effective time of the action of the
Board of Directors ordering the redemption of the Rights, the Corporation shall
give notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the transfer agent for the Common Stock. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each notice of redemption will state the
method by which the payment of the Redemption Price will be made. At the option
of the Board of Directors, the Redemption Price may be paid in cash to each
Rights holder or by the issuance of shares (and, at the Corporation's election
pursuant to Section 14(b) hereof, cash or depositary receipts in lieu of
fractions of shares other than fractions which are integral multiples of one
one-hundredth of a
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share) of Preferred Stock or Common Stock having a Fair Market Value equal to
such cash payment.
(c) In the event the Corporation shall at any time after the
date of this Agreement but before the Distribution Date (A) pay any dividend on
Common Stock in shares of Common Stock, (B) subdivide or split the outstanding
shares of Common Stock into a greater number of shares or (C) combine or
consolidate the outstanding shares of Common Stock into a smaller number of
shares or effect a reverse split of the outstanding shares of Common Stock and
as a consequence thereof the number of Rights outstanding shall change, then,
and in each such event, the Redemption Price may, by action of the Board of
Directors of the Corporation in its discretion, be appropriately adjusted in
respect of such transaction so as to maintain the aggregate Redemption Price of
all Rights after such transaction at the same amount, insofar as practicable, as
before the transaction.
Section 24. Notice of Proposed Actions.
(a) In case the Corporation, after the Distribution Date,
shall propose (i) to effect any of the transactions referred to in Section
11(a)(i) or to pay any dividend to the holders of record of its shares of Common
Stock payable in shares of capital stock of any class or to make any other
distribution to the holders of record of its Common Stock (other than a regular
periodic cash dividend at a rate not in excess of 150% of the rate of the last
cash dividend theretofore paid), or (ii) to offer to the holders of record of
its Common Stock options, warrants, or other rights to subscribe for or to
purchase shares of Common Stock (including any security convertible into or
exchangeable for Common Stock) or shares of stock of any class or any other
securities, options, warrants, convertible or exchangeable securities or other
rights, or (iii) to effect any reclassification of its Preferred Stock or Common
Stock or any recapitalization or reorganization of the Corporation, or (iv) to
effect any consolidation or merger with or into, 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 or more transactions, of more than 50% of the assets or
earning power of the Corporation and its Subsidiaries (taken as a whole) to, any
other Person or Persons, or (v) to effect the liquidation, dissolution or
winding up of the Corporation, then, in each such case, the Corporation shall
give to each holder of record of a Right Certificate, in accordance with Section
25, notice of such proposed action, which shall specify the record date for the
purposes of such transaction referred to in Section 11(a)(i) or such dividend or
distribution, or the date on which
40
44
such reclassification, recapitalization, reorganization, consolidation, merger,
sale or transfer of assets, liquidation, dissolution, or winding up is to take
place and the record date for determining participation therein by the holders
of record of Common Stock or 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 10 days prior to the record date for determining
holders of record of the Preferred Stock for purposes of such action, and in the
case of any such other action, at least 10 days prior to the date of the taking
of such proposed action or the date of participation therein by the holders of
record of Common Stock or Preferred Stock, whichever shall be the earlier. The
failure to give notice required by this Section 24 or any defect therein shall
not affect the legality or validity of the action taken by the Corporation or
the vote upon any such action.
(b) In case the event referred to in Section 11(a)(ii) shall
occur, then the Corporation shall as soon as practicable thereafter, in
accordance with Section 25 hereof, give to each holder of a Right notice of the
occurrence of such event, which notice shall describe the event and the
consequences of the event to holders of Rights under Section 11(a)(ii) hereof.
Section 25. Notices. Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of record of
any Right Certificate or Right to or on the Corporation 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:
Delphi Automotive Systems Corporation
0000 Xxxxxx Xxxxx
Xxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxxxx
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Corporation or by the holder of record of
any Right Certificate or Right 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 Corporation) as follows:
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45
BankBoston, N.A.
000 Xxxxxx Xxxxxx,
Xxxx Xxxx 00-00-00
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxx
Notices or demands authorized by this Agreement to be given or made by the
Corporation or the Rights Agent to the holder of record of any Right Certificate
or Right 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 Corporation.
Section 26. Supplements and Amendments. For as long as the
Rights are then redeemable and except as provided in the last sentence of this
Section 26, the Corporation may, in its sole and absolute discretion, and the
Rights Agent shall if the Corporation so directs, supplement or amend any
provision of this Agreement without the approval of any holders of the Rights.
At any time when the Rights are not then redeemable and except as provided in
the last sentence of this Section 26, the Corporation may, and the Rights Agent
shall if the Corporation so directs, supplement or amend this Agreement without
the approval of any holders of Right Certificates (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 or (iii) to change or
supplement the provisions hereunder in any manner which the Corporation may deem
necessary or desirable, provided that no such supplement or amendment pursuant
to this clause (iii) shall materially adversely affect the interest of the
holders of Right Certificates. Upon the delivery of a certificate from an
appropriate officer of the Corporation which states that the proposed supplement
or amendment is in compliance with the terms of this Section 26, the Rights
Agent shall execute such supplement or amendment. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or amendment shall be
made which changes the Redemption Price; it being understood that an adjustment
of the Redemption Price in accordance with Section 23 shall not be considered a
supplement or amendment of this Agreement.
Section 27. Exchange.
(a) The Board of Directors of the Corporation may,
at its option, 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 null and void pursuant to the provisions of
Section 7(e)
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hereof) for shares of Common Stock at an exchange ratio of one share 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 "EXCHANGE RATIO"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Voting Stock then outstanding, but may effect such exchange as of
and simultaneously with such Person becoming, together with its Affiliates and
Associates, the Beneficial Owner of 50% or more of the Voting Stock then
outstanding. From and after the occurrence of an event specified in Section
13(a) hereof, any Rights that theretofore have not been exchanged pursuant to
this Section 27(a) shall thereafter be exercisable only in accordance with
Section 13 and may not be exchanged pursuant to this Section 27(a).
(b) Immediately upon the action of the Board of Directors of
the Corporation ordering the exchange of any Rights pursuant to paragraph (a) of
this Section 27 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of shares of Common Stock
equal to the number of such Rights held by such holder multiplied by the
Exchange Ratio. The Corporation shall promptly give public notice of any such
exchange; provided, however, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Corporation promptly
shall mail a notice of any such exchange to all of the holders of such Rights at
their last addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of exchange will
state the method by which the exchange of the shares of Common Stock 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 null and void
pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In the event that there shall not be sufficient shares
of Common Stock issued but not outstanding or authorized but unissued to permit
any exchange of Rights as contemplated in accordance with this Section 27, the
Corporation shall substitute to the extent of such insufficiency, for each share
of Common
43
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Stock that would otherwise be issuable upon exchange of a Right, a number of
shares of Preferred Stock or fractions thereof having an aggregate Fair Market
Value equal to the Fair Market Value of one share of Common Stock as of the date
any Person becomes an Acquiring Person.
(d) The Corporation shall not be required to issue fractions
of shares of Common Stock or to distribute certificates which evidence
fractional shares. In lieu of such fractional shares, the Corporation shall pay
to the registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this paragraph (d), the current market value
of a whole share of Common Stock shall be the closing price of a share of Common
Stock for the Trading Day immediately prior to the date of exchange pursuant to
this Section 27.
Section 28. Successors. All of the covenants and provisions
of this Agreement by or for the benefit of the Corporation or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. Benefits of this Agreement. Nothing in this
Agreement shall be construed to give to any person or corporation other than the
Corporation, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the holders of Common Stock
in their capacity as holders of the Rights) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Corporation, the Rights Agent and the holders of record
of the Right Certificates (and, prior to the Distribution Date, the holders of
Common Stock in their capacity as holders of the Rights).
Section 30. Delaware Contract. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Delaware and for all purposes shall be governed by and
construed and enforced in accordance with the laws of such state applicable to
contracts to be made and performed entirely within such state.
Section 31. 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.
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48
Section 32. 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.
Section 33. 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.
Section 34. Determinations and Actions by the Board of
Directors. The Board of Directors of the Corporation shall have the exclusive
power and authority to interpret and apply this Agreement and to exercise the
rights and powers specifically granted to the Board of Directors of the
Corporation hereunder and may take such action as may be necessary or advisable
in the administration of this Agreement or to amend or supplement this Agreement
in accordance with its terms, including, without limitation, the right and power
to (i) make all determinations deemed necessary or advisable for the
administration of this Agreement or (ii) decide to redeem the Rights or (iii)
decide to amend this Agreement. All such actions, calculations, interpretations
and determinations (including any decision not to take any action) done or made
by the Board of Directors of the Corporation in good faith shall (x) be final,
conclusive and binding on the Corporation, the Rights Agent, the holders of the
Rights, as such, and all other Persons, and (y) not subject any member of the
Board of Directors to any liability to the holders of Rights.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above written.
DELPHI AUTOMOTIVE SYSTEMS
CORPORATION
By:
-------------------------------
Name:
Title:
BANKBOSTON, N.A.
By:
-------------------------------
Name:
Title:
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50
EXHIBIT A
AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED
TO BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED
BY ACQUIRING PERSONS OR THEIR AFFILIATES OR
ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) OR ANY SUBSEQUENT HOLDER OF
SUCH RIGHTS SHALL BE NULL AND VOID AND MAY NOT
BE EXERCISED OR TRANSFERRED TO ANY PERSON.
DELPHI AUTOMOTIVE SYSTEMS CORPORATION
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PREFERRED STOCK
On February __, 1999, the IPO Committee of the Board of Directors (the
"IPO Committee") of Delphi Automotive Systems Corporation (the "Corporation")
declared a dividend distribution of one Preferred Stock Purchase Right for each
outstanding share of Common Stock, par value $.01 per share (the "Common
Stock"), of the Corporation. The distribution is payable as of the time and date
determined by the IPO Committee to be the record date of such distribution to
stockholders of record on such time and date (the "Record Date"). Each Right
entitles the registered holder to purchase from the Corporation one
one-hundredth (1/100) of a share of preferred stock of the Corporation,
designated as Series A Junior Preferred Stock (the "Preferred Stock") at a price
of $65 per one one- hundredth (1/100) of a share ("Exercise Price"). The
description and terms of the Rights are set forth in a Rights Agreement (the
"Rights Agreement") between the Corporation and BankBoston, N.A., as Rights
Agent (the "Rights Agent").
As discussed below, initially the Rights will not be exercisable,
certificates will not be sent to stockholders and the Rights will automatically
trade with the Common Stock.
The Rights, unless earlier redeemed by the Board of Directors, become
exercisable upon the close of business on the day (the "Distribution Date")
which is the earlier of (i) the tenth day following a public announcement that a
person or group of affiliated or associated persons, with certain exceptions set
forth below, has acquired beneficial ownership of 15% or more of the outstanding
voting stock of the Corporation (an "Acquiring Person") and (ii) the tenth
business day (or such later date as may be determined by the Board of Directors
prior to such time as any person or group of affiliated or associated persons
becomes an Acquiring
51
Person) after the date of the commencement or announcement of a person's or
group's intention to commence a tender or exchange offer the consummation of
which would result in the ownership of 15% or more of the Corporation's
outstanding voting stock (even if no shares are actually purchased pursuant to
such offer); prior thereto, the Rights would not be exercisable, would not be
represented by a separate certificate, and would not be transferable apart from
the Corporation's Common Stock, but will instead be evidenced, with respect to
any of the Common Stock certificates outstanding as of the Record Date, by such
Common Stock certificate with a copy of this Summary of Rights attached thereto
(or in the case of uncertificated shares of Common Stock, by the book entry
account that evidences record ownership of such shares). An Acquiring Person
does not include (A) the Corporation, (B) any subsidiary of the Corporation, (C)
any employee benefit plan or employee stock plan of the Corporation or of any
subsidiary of the Corporation, or any trust or other entity organized,
appointed, established or holding voting stock for or pursuant to the terms of
any such plan, (D) any person or group of affiliated or associated persons whose
ownership of 15% or more of the shares of voting stock of the Corporation then
outstanding results solely from (i) any action or transaction or transactions
approved by the Board of Directors before such person or group became an
Acquiring Person or (ii) a reduction in the number of issued and outstanding
shares of voting stock of the Corporation pursuant to a transaction or
transactions approved by the Board of Directors (provided that any person or
group that does not become an Acquiring Person by reason of clause (i) or (ii)
above shall become an Acquiring Person upon acquisition of an additional 1% of
the Corporation's voting stock unless such acquisition of additional voting
stock results from one or more actions or transactions approved by the Board of
Directors of the Corporation), or (E) prior to the time at which General Motors
Corporation ("GM") shall first cease to beneficially own 15% or more of the
voting stock of the Corporation then outstanding, GM or any affiliate or
associate of GM.
Until the Distribution Date (or earlier redemption, exchange or
expiration of the Rights), new Common Stock certificates issued after the Record
Date will contain a legend incorporating the Rights Agreement by reference.
Until the Distribution Date (or earlier redemption, exchange or expiration of
the Rights), the surrender for transfer of any of the Common Stock
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52
certificates outstanding as of the Record Date, with or without a copy of this
Summary of Rights attached thereto, will also constitute the transfer of the
Rights associated with the Common Stock represented by such certificate. As soon
as practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Stock as of the close of business on the Distribution Date and such
separate certificates alone will evidence the Rights from and after the
Distribution Date.
The Rights are not exercisable until the Distribution Date. The Rights
will expire at the close of business on January 31, 2009, unless earlier
redeemed by the Corporation as described below.
The Preferred Stock is nonredeemable and, unless otherwise provided in
connection with the creation of a subsequent series of preferred stock,
subordinate to any other series of the Corporation's preferred stock. The
Preferred Stock may not be issued except upon exercise of Rights. Each share of
Preferred Stock will be entitled to receive when, as and if declared, a
quarterly dividend in an amount equal to the greater of $__.__ per share or 100
times the cash dividends declared on the Corporation's Common Stock. In
addition, the holders of the Preferred Stock are entitled to receive 100 times
any non-cash dividends (other than dividends payable in equity securities)
declared on the Common Stock, in like kind. In the event of the liquidation of
the Corporation, the holders of Preferred Stock will be entitled to receive, for
each share of Preferred Stock, a payment in an amount equal to the greater of
$650 or 100 times the payment made per share of Common Stock. Each share of
Preferred Stock will have 100 votes, voting together with the Common Stock. In
the event of any merger, consolidation or other transaction in which Common
Stock is exchanged, each share of Preferred Stock will be entitled to receive
100 times the amount received per share of Common Stock. The rights of Preferred
Stock as to dividends, liquidation and voting are protected by anti-dilution
provisions.
The number of shares of Preferred Stock issuable upon exercise of the
Rights and Exercise Price of the Rights are subject to certain adjustments from
time to time in the event of a stock dividend on, or a subdivision or
combination of, the Common Stock. The Exercise Price for the Rights also is
subject to adjustment in the event of
3
53
extraordinary distributions of cash or other property to holders of Common
Stock.
Unless the Rights are earlier redeemed or exchanged, in the event
that, after the time that a Person becomes an Acquiring Person, the Corporation
were to be acquired in a merger or other business combination (in which any
shares of Common Stock are changed into or exchanged for other securities or
assets) or more than 50% of the assets or earning power of the Corporation and
its subsidiaries (taken as a whole) were to be sold or transferred in one or a
series of related transactions, the Rights Agreement provides that proper
provision will be made so that each holder of record of a Right will from and
after such date have the right to receive, upon payment of the Exercise Price,
that number of shares of common stock of the acquiring company having a market
value at the time of such transaction equal to two times the Exercise Price.
In addition, unless the Rights are earlier redeemed, in the event that
a person or group becomes an Acquiring Person, the Rights Agreement provides
that proper provisions will be made so that each holder of record of a Right,
other than the Acquiring Person (whose Rights will thereupon become null and
void), will thereafter have the right to receive, upon payment of the Exercise
Price, that number of shares of the Preferred Stock having a market value at the
time of the transaction equal to two times the Exercise Price (such market value
to be determined with reference to the market value of the Corporation's Common
Stock as provided in the Rights Agreement).
At any time after any person or group becomes an Acquiring Person and
prior to, or simultaneously with, the acquisition by such person or group of 50%
or more of the outstanding voting stock, the Board of Directors of the
Corporation may exchange the Rights (other than Rights owned by such person or
group which will have become void), in whole or in part, at an exchange ratio of
one share of Common Stock per Right (subject to adjustment).
Fractions of shares of Preferred Stock (other than fractions which are
integral multiples of one one-hundredth of a share) may, at the election of the
Corporation, be evidenced by depositary receipts. The Corporation may also issue
cash in lieu of fractional shares which are not integral multiples of one
one-hundredth of a share.
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At any time prior to the close of business on the tenth day after
there has been a public announcement that a person has become an Acquiring
Person, the Corporation may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (the "Redemption Price"). Immediately upon the effective
time of the action of the Board of Directors of the Corporation authorizing
redemption of the Rights, the right to exercise the Rights will terminate and
the only right of the holders of Rights will be to receive the Redemption Price.
For as long as the Rights are then redeemable, the Corporation may,
except with respect to the Redemption Price, amend the Rights in any manner,
including an amendment to extend the time period in which the Rights may be
redeemed. At any time when the Rights are not then redeemable, the Corporation
may amend the Rights in any manner that does not materially adversely affect the
interests of holders of the Rights as such.
Until a Right is exercised, the holder, as such, will have no rights
as a stockholder of the Corporation, including, without limitation, the right to
vote or to receive dividends.
A copy of the form of Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to the Corporation's
Registration Statement on Form S-1 (Registration No. 333-67333). A copy of the
Rights Agreement is available free of charge from the Corporation. This summary
description of the Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement which is incorporated in this
summary description herein by reference.
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55
EXHIBIT B
[Form of Right Certificate]
Certificate No. W- ______ Rights
NOT EXERCISABLE AFTER JANUARY 31, 2009 OR EARLIER IF EXCHANGED OR
REDEEMED. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE
CORPORATION AND UNDER CERTAIN OTHER CIRCUMSTANCES, AT $.01 PER RIGHT
(SUBJECT TO ADJUSTMENT), ON THE TERMS SET FORTH OR REFERRED TO IN THE
RIGHTS AGREEMENT. AS PROVIDED IN THE RIGHTS AGREEMENT (AS REFERRED TO
BELOW), RIGHTS ISSUED TO OR BENEFICIALLY OWNED BY ACQUIRING PERSONS OR
THEIR AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) OR ANY SUBSEQUENT HOLDER OF SUCH RIGHTS SHALL BE NULL AND
VOID AND MAY NOT BE EXERCISED OR TRANSFERRED TO ANY PERSON.
Right Certificate
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 February 1, 1999 (the "Rights Agreement") by
and between Delphi Automotive Systems Corporation, a Delaware corporation (the
"Corporation"), and BankBoston, N.A., a national banking association (the
"Rights Agent"), to purchase from the Corporation at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
5:00 P.M. (Eastern time) on January 31, 2009 at the office of the Rights Agent
designated in the Rights Agreement for such purpose, or its successor as Rights
Agent, one one-hundredth (1/100) of a fully paid nonassessable share of Series A
Junior Preferred Stock (the "Preferred Stock") of the Corporation at a purchase
price of $65, as the same may from time to time be adjusted in accordance with
the Rights Agreement (the "Exercise Price"), upon presentation and surrender of
this Right Certificate with the Form of Election to Purchase attached hereto
duly executed.
As provided in the Rights Agreement, the Exercise Price and the number
of shares of Preferred Stock which may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events and, upon
56
the happening of certain events, securities other than shares of Preferred
Stock, or other property, may be acquired upon exercise of the Rights evidenced
by this Right Certificate, as provided in the Rights Agreement.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
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 of the Rights Agent,
the Corporation and the holders of record of Right Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the
Corporation.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office of the Rights Agent designated in the Rights Agreement
for such purpose, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the holder of
record to purchase a like aggregate number of shares of Preferred Stock as the
Rights evidenced by the Right Certificate or Right Certificates surrendered
shall have entitled such holder to purchase. If this Right Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof, another Right Certificate or Right Certificates for the number of whole
Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Corporation at its option or under
certain other circumstances at a redemption price of $.01 per Right.
No fractional shares of Preferred Stock (other than fractions which are
integral multiples of one one-hundredth (1/100) of a share) are required to be
issued upon the exercise of any Right or Rights evidenced hereby, and in lieu
thereof the Corporation may cause depositary receipts to be issued and/or a cash
payment may be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of Preferred Stock
or of any other securities of the Corporation which may at any time be issuable
on the exercise hereof, nor shall anything
2
57
contained in the Rights Agreement or herein be construed to confer upon the
holder hereof, as such, any of the rights of a stockholder of the Corporation or
any right to vote for the election of directors or upon any matter submitted to
stockholders at meeting thereof, or to give or withhold consent to any corporate
action or to receive notice of meetings or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by this
Right Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Corporation and its corporate seal. Dated as of
---------------- -----, --------
ATTEST: DELPHI AUTOMOTIVE SYSTEMS
CORPORATION
By
------------------------------ ------------------------------
[Assistant] Secretary Title:
Countersigned:
BANKBOSTON, N.A.
By
---------------------------
Authorized Signature
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58
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
------------------
(To be executed by the registered holder if such
holder desires to transfer the Right Certificates.)
FOR VALUE RECEIVED
------------------------------------------
hereby sells, assigns and transfers unto
---------------------------------------
--------------------------------------------------------------------------------
(Please print name and address of transferee)
--------------------------------------------------------------------------------
Rights evidenced by this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint__________________________ Attorney to transfer the within Right
Certificate on the books of the within-named Corporation, with full power of
substitution.
Dated:
---------------------- -----, -------
-------------------------------------
Signature
Signature Guaranteed:
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Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate [ ] is [ ] is not being sold, assigned or
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Associate or an Affiliate thereof (as such terms are defined in the Rights
Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or subsequently became an Acquiring Person or an
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement).
Dated:
------------------ -----, ---------- ----------------------------
Signature
NOTICE
The signature to the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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FORM OF ELECTION TO PURCHASE
----------------------------
(To be executed if registered holder
desires to exercise the Right Certificate.)
TO
-------------------------:
The undersigned hereby irrevocably elects to exercise
----------------
Rights represented by this Right Certificate to purchase the shares of Preferred
Stock issuable upon the exercise of such Rights and requests that certificates
for such share(s) be issued in the following name:
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 Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number:
---------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated:
-------------- -----, ---------
----------------------------------------
Signature
(Signature must conform in all
respects to name of holder as
specified on the face of this
Right Certificate)
Signature Guaranteed:
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EXHIBIT C
FORM OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PREFERRED STOCK
OF
DELPHI AUTOMOTIVE SYSTEMS CORPORATION
Pursuant to Section 151 of the Delaware
General Corporation Law
I, ____________, ____________ of Delphi Automotive Systems
Corporation, a corporation organized and existing under the Delaware General
Corporation Law (the "CORPORATION"), in accordance with the provisions of
Section 151 of such law, DO HEREBY CERTIFY that pursuant to the authority
conferred upon the IPO Committee of the Board of Directors by Board of Directors
and upon the Board of Directors by the Amended and Restated Certificate of
Incorporation of the Corporation, the IPO Committee of the Board of Directors on
February __, 1999, adopted the following resolution which creates a series of
shares of Preferred Stock designated as Series A Junior Preferred Stock, as
follows:
RESOLVED, that pursuant to Section 151(g) of the Delaware
General Corporation Law and the authority vested in the Board of Directors of
the Corporation in accordance with the provisions of ARTICLE FOURTH of the
Amended and Restated Certificate of Incorporation of the Corporation and
delegated to the IPO Committee by the Board of Directors, a series of Preferred
Stock of the Corporation be, and hereby is, created, and the powers,
designations, preferences and relative,
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participating, optional or other special rights of the shares of such series,
and the qualifications, limitations or restrictions thereof, be, and hereby are,
as follows:
Section 1. Designation and Amount. The shares of such series
shall be designated as "Series A Junior Preferred Stock" (the "SERIES A
PREFERRED STOCK") and the number of shares constituting such series shall be
____________.
Section 2. Dividends and Distributions.
(A) Subject to the provisions for adjustment here inafter set
forth, and subject to the rights of the holders of any shares of any series of
Preferred Stock ranking prior and superior to the Series A Preferred Stock with
respect to dividends, the holders of shares of Series A Preferred Stock shall be
entitled to receive, when, as and if declared by the Board of Directors out of
funds legally available for the purpose, (i) cash dividends in an amount per
share (rounded to the nearest cent) equal to 100 times the aggregate per share
amount of all cash dividends declared or paid on the Common Stock, $0.01 par
value per share, of the Corporation (the "COMMON STOCK") and (ii) a preferential
cash dividend (the "PREFERENTIAL DIVIDENDS"), if any, in preference to the
holders of Common Stock, on the first day of January, April, July and October of
each year (each 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 A Preferred Stock, payable in an amount (except in the case
of the first Quarterly Dividend Payment if the date of the first issuance of
Series A Preferred Stock is a date other than a Quarterly Dividend Payment date,
in which case such payment shall be a prorated amount of such amount) equal to
$__.__ per share of Series A Preferred Stock less the per share amount of all
cash dividends declared on the Series A Preferred Stock pursuant to clause (i)
of this sentence since the immediately preceding Quar terly Dividend Payment
Date or, with respect to the first Quarterly Dividend Payment Date, since the
first issuance of any share or fraction of a share of Series A Preferred Stock.
In the event the Corporation shall, at any time after the issuance of any share
or fraction of a share of Series A Preferred Stock, make any distribution on the
shares of Common Stock of the Corporation, whether by way of a dividend or a
reclassification of stock, a recapitalization, reorganization or partial
liquidation of the Corporation or otherwise, which is payable in cash or any
debt security, debt instrument, real or personal property
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or any other property (other than cash dividends subject to the immediately
preceding sentence, a distribution of shares of Common Stock or other capital
stock of the Corporation or a distribution of rights or warrants to acquire any
such share, including any debt security convertible into or exchangeable for any
such share, at a price less than the Fair Market Value (as hereinafter defined)
of such share), then, and in each such event, the Corporation shall
simultaneously pay on each then outstanding share of Series A Preferred Stock of
the Corporation a distribution, in like kind, of 100 times such distribution
paid on a share of Common Stock (subject to the provisions for adjust ment
hereinafter set forth). The dividends and distributions on the Series A
Preferred Stock to which holders thereof are entitled pursuant to clause (i) of
the first sentence of this paragraph and pursuant to the second sentence of this
paragraph are hereinafter referred to as "DIVIDENDS" and the multiple of such
cash and non-cash dividends on the Common Stock applicable to the determination
of the Dividends, which shall be 100 initially but shall be adjusted from time
to time as hereinafter provided, is hereinafter referred to as the "DIVIDEND
MULTIPLE". In the event the Corporation shall at any time after the date shares
of Common Stock are first publicly held declare or pay any dividend or make any
distribution on Common Stock payable in shares of Common Stock, or effect a
subdivision or split or a combination, consolidation or reverse split of the
outstanding shares of Common Stock into a greater or lesser number of shares of
Common Stock, then in each such case the Dividend Multiple thereafter applicable
to the determination of the amount of Dividends which holders of shares of
Series A Preferred Stock shall be entitled to receive shall be the Dividend
Multiple applicable immediately prior to such event multiplied 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.
(B) The Corporation shall declare each Dividend at the same
time it declares any cash or non-cash dividend or distribu tion on the Common
Stock in respect of which a Dividend is required to be paid. No cash or non-cash
dividend or distribu tion on the Common Stock in respect of which a Dividend is
required to be paid shall be paid or set aside for payment on the Common Stock
unless a Dividend in respect of such dividend or distribution on the Common
Stock shall be simultaneously paid, or set aside for payment, on the Series A
Preferred Stock.
(C) Preferential Dividends shall begin to accrue on
outstanding shares of Series A Preferred Stock from the Quarterly
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Dividend Payment Date next preceding the date of issuance of any shares of
Series A Preferred Stock. Accrued but unpaid Preferen tial Dividends shall
cumulate but shall not bear interest. Preferential Dividends paid on the shares
of Series A Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be allocated pro
rata on a share-by-share basis among all such shares at the time outstanding.
Section 3. Voting Rights. The holders of shares of
Series A Preferred Stock shall have the following voting rights:
(A) Subject to the provisions for adjustment herein after set
forth, each share of Series A Preferred Stock shall entitle the holder thereof
to 100 votes on all matters submitted to a vote of the holders of the Common
Stock. The number of votes which a holder of Series A Preferred Stock is
entitled to cast, as the same may be adjusted from time to time as herein after
provided, is hereinafter referred to as the "VOTE MULTIPLE". In the event the
Corporation shall at any time after shares of Common Stock are first publicly
held declare or pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or split or a combination, consolidation or
reverse split of the outstanding shares of Common Stock into a greater or lesser
number of shares of Common Stock, then in each such case the Vote Multiple
thereafter applicable to the determination of the number of votes per share to
which holders of shares of Series A Preferred Stock shall be entitled after such
event shall be the Vote Multiple immediately prior to such event multiplied 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.
(B) Except as otherwise provided herein, in the Amended and
Restated Certificate of Incorporation or by law, the holders of shares of Series
A Preferred Stock and the holders of shares of Common Stock shall vote together
as one class on all matters submitted to a vote of stockholders of the
Corporation.
(C) In the event that the Preferential Dividends accrued on
the Series A Preferred Stock for four or more quar terly dividend periods,
whether consecutive or not, shall not have been declared and paid or irrevocably
set aside for payment, the holders of record of Preferred Stock of the
Corporation of all series (including the Series A Preferred Stock), other than
any series in respect of which such right is expressly withheld
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by the Amended and Restated Certificate of Incorporation or the authorizing
resolutions included in any Certificate of Desig nations therefor, shall have
the right, at the next meeting of stockholders called for the election of
directors, to elect two members to the Board of Directors, which directors shall
be in addition to the number required prior to such event, to serve until the
next Annual Meeting and until their successors are elected and qualified or
their earlier resignation, removal or incapacity or until such earlier time as
all accrued and unpaid Preferential Dividends upon the outstanding shares of
Series A Preferred Stock shall have been paid (or irrevocably set aside for
payment) in full. The holders of shares of Series A Preferred Stock shall
continue to have the right to elect directors as provided by the immediately
preceding sentence until all accrued and unpaid Preferential Dividends upon the
out standing shares of Series A Preferred Stock shall have been paid (or set
aside for payment) in full. Such directors may be removed and replaced by such
stockholders, and vacancies in such directorships may be filled only by such
stockholders (or by the remaining director elected by such stockholders, if
there be one) in the manner permitted by law; provided, however, that any such
action by stockholders shall be taken at a meeting of stock holders and shall
not be taken by written consent thereto.
(D) Except as otherwise required by the Amended and Restated
Certificate of Incorporation or by law or set forth herein, holders of Series A
Preferred Stock shall have no other 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 the taking of any corporate
action.
Section 4. Certain Restrictions.
(A) Whenever Preferential Dividends or Dividends are in
arrears or the Corporation shall be in default of payment thereof, thereafter
and until all accrued and unpaid Preferential Dividends and Dividends, whether
or not declared, on shares of Series A Preferred Stock outstanding shall have
been paid or set irrevocably aside for payment in full, and in addition to any
and all other rights which any holder of shares of Series A Preferred Stock may
have in such circumstances, the Corporation shall not:
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration, any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
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(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a parity as to
dividends with the Series A Preferred Stock, unless dividends are paid
ratably on the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled if
the full dividends accrued thereon were to be paid;
(iii) except as permitted by subparagraph (iv) of this
paragraph 4(A), redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock
in exchange for shares of any stock of the Corporation ranking junior
(both as to dividends and upon liquidation, dissolution or winding up)
to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock (either as to dividends or
upon liquidation, dissolution or winding up), except in accordance with
a purchase offer made 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 Corporation shall not permit any Subsidiary (as
hereinafter defined) of the Corporation to purchase or other wise acquire for
consideration any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner. A "SUBSIDIARY" of the Corporation shall
mean any corporation or other entity of which securities or other ownership
interests having ordinary voting power sufficient to elect a majority of the
board of directors of such corporation or other entity or other persons
performing similar functions are beneficially owned, directly or indirectly, by
the Corporation or by any corporation or other entity that is otherwise
controlled by the Corporation.
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(C) The Corporation shall not issue any shares of Series A
Preferred Stock except upon exercise of Rights issued pursuant to that certain
Rights Agreement dated as of February 1, 1999 between the Corporation and
BankBoston, N.A., as Rights Agent, as it may be amended from time to time, a
copy of which is on file with the Secretary of the Corporation at its principal
executive office and shall be made available to stockholders of record without
charge upon written request therefor addressed to said Secretary.
Notwithstanding the foregoing sentence, nothing contained in the provisions
hereof shall prohibit or restrict the Corporation from issuing for any purpose
any series of Preferred Stock with rights and privileges similar to, different
from, or greater than, those of the Series A Preferred Stock.
Section 5. Reacquired Shares. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and can celled promptly after the acquisition
thereof. All such shares upon their retirement and cancellation shall become
authorized but unissued shares of Preferred Stock, without designation as to
series, and such shares may be reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board of Directors.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Preferred Stock unless the holders of shares of
Series A Preferred Stock shall have received for each share of Series A
Preferred Stock, subject to adjustment as hereinafter provided, (A) $650 plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment or, (B) if greater than the amount
specified in clause (i)(A) of this sentence, an amount equal to 100 times the
aggregate amount to be distributed per share to holders of Common Stock, as the
same may be adjusted as hereinafter provided and (ii) to the holders of stock
ranking on a parity upon liquida tion, dissolution or winding up with the Series
A Preferred Stock, unless simultaneously therewith distributions are made
ratably on the Series A Preferred Stock and all other shares of such parity
stock in proportion to the total amounts to which the holders of shares of
Series A Preferred Stock are entitled under clause (i)(A) of this sentence and
to which the holders of such parity shares are entitled, in each case upon such
liquidation, dissolution
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or winding up. The amount to which holders of Series A Preferred Stock may be
entitled upon liquidation, dissolution or winding up of the Corporation pursuant
to clause (i)(B) of the foregoing sentence is hereinafter referred to as the
"PARTICIPATING LIQUIDATION AMOUNT" and the multiple of the amount to be
distributed to holders of shares of Common Stock upon the liquidation,
dissolution or winding up of the Corporation applicable pursuant to said clause
to the determination of the Participating Liquidation Amount, as said multiple
may be adjusted from time to time as hereinafter provided, is hereinafter
referred to as the "LIQUIDATION MULTIPLE". In the event the Corporation shall at
any time after the date shares of Common Stock are first publicly held declare
or pay any dividend on Common Stock payable in shares of Common Stock, or effect
a subdivision or split or a combination, consolidation or reverse split of the
outstanding shares of Common Stock into a greater or lesser number of shares of
Common Stock, then, in each such case, the Liquidation Multiple thereafter
applicable to the determination of the Participating Liquidation Amount to which
holders of Series A Preferred Stock shall be entitled after such event shall be
the Liquidation Multiple applicable immediately prior to such event multiplied
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. Certain Reclassifications and Other Events.
(A) In the event that holders of shares of Common Stock of the
Corporation receive after the date shares of Common Stock are first publicly
held, in respect of their shares of Common Stock any share of capital stock of
the Corporation (other than any share of Common Stock of the Corporation),
whether by way of reclassification, recapitalization, reorganization, dividend
or other distribution or otherwise (a "TRANSACTION"), then, and in each such
event, the dividend rights, voting rights and rights upon the liquidation,
dissolution or winding up of the Corporation of the shares of Series A Preferred
Stock shall be adjusted so that after such event the holders of Series A
Preferred Stock shall be entitled, in respect of each share of Series A
Preferred Stock held, in addition to such rights in respect thereof to which
such holder was entitled immediately prior to such adjustment, to (i) such
additional dividends as equal the Dividend Multiple in effect immediately prior
to such Transaction multiplied by the additional dividends which the holder of a
share of Common Stock shall be entitled to receive by virtue of the receipt in
the Transaction of such capital stock, (ii) such additional voting rights as
equal the Vote Multiple in effect immediately prior to such Transaction
multiplied by the additional voting rights which the holder of a share of Common
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Stock shall be entitled to receive by virtue of the receipt in the Transaction
of such capital stock and (iii) such additional distributions upon liquidation,
dissolution or winding up of the Corporation as equal the Liquidation Multiple
in effect immediately prior to such Transaction multiplied by the addi tional
amount which the holder of a share of Common Stock shall be entitled to receive
upon liquidation, dissolution or winding up of the Corporation by virtue of the
receipt in the Transaction of such capital stock, as the case may be, all as
provided by the terms of such capital stock.
(B) In the event that holders of shares of Common Stock of the
Corporation receive after the date shares of Common Stock are first publicly
held, in respect of their shares of Common Stock any right or warrant to
purchase Common Stock (including as such a right, for all purposes of this
paragraph, any security convertible into or exchangeable for Common Stock) at a
purchase price per share less than the Fair Market Value of a share of Common
Stock on the date of issuance of such right or warrant, then and in each such
event the dividend rights, voting rights and rights upon the liquidation,
dissolution or winding up of the Corporation of the shares of Series A Preferred
Stock shall each be adjusted so that after such event the Dividend Multiple, the
Vote Multiple and the Liquidation Multiple shall each be the product of the
Dividend Multiple, the Vote Multiple and the Liquidation Multiple, as the case
may be, in effect immediately prior to such event multiplied by a fraction the
numerator of which shall be the number of shares of Common Stock outstanding
immediately before such issuance of rights or warrants plus the maximum number
of shares of Common Stock which could be acquired upon exercise in full of all
such rights or warrants and the denominator of which shall be the number of
shares of Common Stock outstanding immediately before such issuance of rights or
warrants plus the number of shares of Common Stock which could be purchased, at
the Fair Market Value of the Common Stock at the time of such issuance, by the
maximum aggregate consideration payable upon exercise in full of all such rights
or warrants.
(C) In the event that holders of shares of Common Stock of the
Corporation receive after the date shares of Common Stock are first publicly
held, in respect of their shares of Common Stock any right or warrant to
purchase capital stock of the Corporation (other than shares of Common Stock),
including as such a right, for all purposes of this paragraph, any security
convertible into or exchangeable for capital stock of the Corporation (other
than Common Stock), at a purchase price per share less than the Fair Market
Value of such shares of capital
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stock on the date of issuance of such right or warrant, then and in each such
event the dividend rights, voting rights and rights upon liquidation,
dissolution or winding up of the Corporation of the shares of Series A Preferred
Stock shall each be adjusted so that after such event each holder of a share of
Series A Preferred Stock shall be entitled, in respect of each share of Series A
Preferred Stock held, in addition to such rights in respect thereof to which
such holder was entitled immediately prior to such event, to receive (i) such
additional dividends as equal the Dividend Multiple in effect immediately prior
to such event multiplied, first, by the additional dividends to which the holder
of a share of Common Stock shall be entitled upon exercise of such right or
warrant by virtue of the capital stock which could be acquired upon such
exercise and multiplied again by the Discount Fraction (as hereinafter defined)
and (ii) such addi tional voting rights as equal the Vote Multiple in effect
immedi ately prior to such event multiplied, first, by the additional voting
rights to which the holder of a share of Common Stock shall be entitled upon
exercise of such right or warrant by virtue of the capital stock which could be
acquired upon such exercise and multiplied again by the Discount Fraction and
(iii) such additional distributions upon liquidation, dissolution or winding up
of the Corporation as equal the Liquidation Multiple in effect immediately prior
to such event multiplied, first, by the additional amount which the holder of a
share of Common Stock shall be entitled to receive upon liquidation, dissolution
or winding up of the Corporation upon exercise of such right or warrant by
virtue of the capital stock which could be acquired upon such exercise and
multiplied again by the Discount Fraction. For purposes of this paragraph, the
"DISCOUNT FRACTION" shall be a fraction the numerator of which shall be the
difference between the Fair Market Value of a share of the capital stock subject
to a right or warrant distributed to holders of shares of Common Stock of the
Corporation as contem plated by this paragraph immediately after the
distribution thereof and the purchase price per share for such share of capital
stock pursuant to such right or warrant and the denom inator of which shall be
the Fair Market Value of a share of such capital stock immediately after the
distribution of such right or warrant.
(D) For purposes of this Certificate of Designations, the
"FAIR MARKET VALUE" of a share of capital stock of the Corporation (including a
share of Common Stock) on any date shall be deemed to be the average of the
daily closing price per share thereof over the 30 consecutive Trading Days (as
such term is hereinafter defined) immediately prior to such date; provided,
however, that, in the event that such Fair Market Value of any
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such share of capital stock is determined during a period which includes any
date that is within 30 Trading Days after (i) the ex-dividend date for a
dividend or distribution on stock payable in shares of such stock or securities
convertible into shares of such stock, or (ii) the effective date of any
subdivision, split, combination, consolidation, reverse stock split or
reclassifica tion of such stock, then, and in each such case, the Fair Market
Value shall be appropriately adjusted by the Board of Directors of the
Corporation to take into account ex-dividend or post-effective date trading. The
closing price for any day shall be the last sale price, regular way, or, in
case, no such sale takes place on such day, the average of the closing bid and
asked prices, regular way (in either case, as reported in the applicable
transaction reporting system with respect to securi ties listed or admitted to
trading on the New York Stock Exchange), or, if the shares are not listed or
admitted to trading on the New York Stock Exchange, as reported in the
applicable transaction reporting system with respect to securities listed on the
principal national securities exchange on which the shares are listed or
admitted to trading or, if the shares are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter market,
as reported by the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use, or if on any such
date the shares 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 shares selected by the Board of Directors of the Corporation.
The term "TRADING DAY" shall mean a day on which the principal national
securities exchange on which the shares are listed or admitted to trading is
open for the transaction of business or, if the shares are not listed or
admitted to trading on any national securities exchange, on which the New York
Stock Exchange or such other national securities exchange as may be selected by
the Board of Directors of the Corporation is open. If the shares are not
publicly held or not so listed or traded on any day within the period of 30
Trading Days applicable to the determination of Fair Market Value thereof as
aforesaid, "FAIR MARKET VALUE" shall mean the fair market value thereof per
share as determined in good faith by the Board of Directors of the Corporation.
In either case referred to in the foregoing sentence, the determination of Fair
Market Value shall be described in a statement filed with the Secretary of the
Corporation.
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Section 8. Consolidation, Merger, etc. In case the Corporation
shall enter into any consolidation, merger, com bination 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 each
outstanding share of Series A Preferred Stock shall at the same time be
similarly exchanged for or changed into the aggregate amount of stock,
securities, cash and/or other property (payable in like kind), as the case may
be, for which or into which each share of Common Stock is changed or exchanged
multiplied by the highest of the Vote Multiple, the Dividend Multiple or the
Liquidation Multiple in effect immediately prior to such event.
Section 9. Effective Time of Adjustments.
(A) Adjustments to the Series A Preferred Stock required by
the provisions hereof shall be effective as of the time at which the event
requiring such adjustments occurs.
(B) The Corporation shall give prompt written notice to each
holder of a share of Series A Preferred Stock of the effect of any adjustment to
the voting rights, dividend rights or rights upon liquidation, dissolution or
winding up of the Corporation of such shares required by the provisions hereof.
Notwithstanding the foregoing sentence, the failure of the Corporation to give
such notice shall not affect the validity of or the force or effect of or the
requirement for such adjustment.
Section 10. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable at the option of the Corporation or any holder
thereof. Notwithstanding the foregoing sentence of this Section, the Corporation
may acquire shares of Series A Preferred Stock in any other manner permitted by
law, the provisions hereof and the Amended and Restated Certificate of
Incorporation of the Corporation.
Section 11. Ranking. Unless otherwise provided in the Amended
and Restated Certificate of Incorporation of the Corporation or a Certificate of
Designations relating to a subsequent series of preferred stock of the
Corporation, the Series A Preferred Stock shall rank junior to all other series
of the Corporation's preferred stock as to the payment of dividends and the
distribution of assets on liquidation, dissolution or winding up and senior to
the Common Stock.
Section 12. Amendment. The provisions hereof and the Amended
and Restated Certificate of Incorporation of the Corporation shall not be
amended in any manner which would
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adversely affect the rights, privileges or powers of the Series A Preferred
Stock without, in addition to any other vote of stock holders required by law,
the affirmative vote of the holders of two-thirds or more of the outstanding
shares of Series A Pre ferred Stock, voting together as a single class.
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IN WITNESS WHEREOF, I have executed and subscribed this
Certificate of Designations and do affirm the foregoing as true under the
penalties of perjury this ___ day of _________, 1999.
-----------------------------------------
Name:
Title:
ATTEST:
-------------------------------
