--------------------------------------------------------------------------------
RIGHTS AGREEMENT
by and between
XXXXXX, INC.
and
FIRST CITY TRANSFER COMPANY
as Rights Agent
Dated as of
February 1, 1999
--------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
Section 1. Certain Definitions
Section 2. Appointment of Rights Agent
Section 3. Issuance of Rights Certificates
Section 4. Form of Rights Certificates
Section 5. Countersignature and Registration
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates
Section 7. Exercise of Rights; Exercise Price; Expiration Date of
Rights
Section 8. Cancellation and Destruction of Rights Certificates
Section 9. Reservation and Availability of Shares of Preferred Stock
Section 10. Preferred Stock Record Date
Section 11. Adjustment of Exercise Price or Number of Shares
Section 12. Certification of Adjusted Exercise Price or Number of
Shares
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power
Section 14. Fractional Rights and Fractional Shares
Section 15. Rights of Action
Section 16. Agreement of Right Holders
Section 17. Rights Certificate Holder Not Deemed a Stockholder
Section 18. Concerning the Rights Agent
Section 19. Merger or Consolidation of, or Change in Name of, the
Rights Agent
Section 20. Duties of Rights Agent
Section 21. Change of Rights Agent
Section 22. Issuance of New Rights Certificates
Section 23. Redemption
Section 24. Notice of Proposed Actions
Section 25. Notices
Section 26. Supplements and Amendments
Section 27. Exchange
Section 28. Successors
Section 29. Benefits of this Rights Agreement
Section 30. New Jersey Contract
Section 31. Counterparts
Section 32. Descriptive Headings
Section 33. Severability
Section 34. Determinations And Actions By The Board Of Directors,
Etc.
Exhibit A Summary of Rights
Exhibit B Form of Rights Certificate
Exhibit C Form of Certificate of Designations Relating to the Terms
of the Class A Preferred Stock, Series One
RIGHTS AGREEMENT
Agreement, dated as of February 1, 1999, by and between Xxxxxx, Inc., a
Delaware corporation (the "Corporation"), and First City Transfer Company (the
"Rights Agent").
W I T N E S S E T H:
WHEREAS, on February 1, 1999, the Board of Directors of the Corporation
authorized the issuance of, and declared a dividend payable in, one right (a
"Right") for each share of Common Stock, $0.01 par value per share, of the
Corporation outstanding as of the close of business on February 12, 1999 (the
"Record Date"), each such Right representing the right to purchase one
one-hundredth of a share of Class A Preferred Stock, Series One of the
Corporation (the "Preferred Stock") having the rights and preferences set forth
in the Certificate of Designations attached hereto as Exhibit C, authorized by
the Board of Directors on February 1, 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 or the Expiration Date (as such terms are
hereinafter defined);
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 indicated:
(a) "Acquiring Person" shall mean any Person (as such term is hereinafter
defined) who or which, together with all Affiliates (as such term is hereinafter
defined) and Associates (as such term is hereinafter defined) of such Person, is
the Beneficial Owner (as such term is hereinafter defined) of 15% or more of the
Voting Stock (as such term is hereinafter defined) of the Corporation then
outstanding; provided, that, an Acquiring Person shall not include (i) an Exempt
Person (as such term is hereinafter defined) or (ii) any Person, together with
all Affiliates and Associates of such Person, who or which 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 (or his or its predecessor through merger, consolidation, amalgamation or
other similar legal succession) pursuant to any action or transaction or series
of related actions or transactions approved by the Board of Directors before
such Person otherwise became an Acquiring Person or (B) a reduction in the
number of 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 such 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 thereafter acquires Beneficial
Ownership of an additional 1% or more of the Voting Stock of the Corporation
then outstanding, unless the acquisition of such additional Voting Stock would
not result in such Person becoming an Acquiring Person by reason of subclause
(A) or (B) of this clause (ii). 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 Rights Agreement.
(b) "Affiliate" shall have the meaning ascribed to such term in Rule 12b-2
of the General Rules and Regulations under the Securities Exchange Act of 1934,
as amended ("Exchange Act"), as in effect on the date of this Rights Agreement.
(c) "Associate" of a Person (as such term is hereinafter defined) shall
mean (i) with respect to a corporation, any officer or director thereof or of
any Subsidiary (as such term is hereinafter defined) thereof, or any Beneficial
Owner (as such term is hereinafter defined) of 10% or more of any class of
equity security thereof, (ii) with respect to an association, joint venture or
other unincorporated organization, any officer or director thereof or of a
Subsidiary thereof or any Beneficial Owner of 10% or more ownership interest
therein, (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% or greater ownership interest therein, (iv) with respect to a limited
liability company, any officer, director or manager thereof or of a Subsidiary
thereof or any member thereof who is, directly or indirectly, the Beneficial
Owner of a 10% or greater ownership interest therein, (v) with respect to a
business trust, any officer or trustee thereof or of any Subsidiary thereof,
(vi) with respect to any other trust or an estate, any trustee, executor or
similar fiduciary or any Person who has a 10% or greater interest as a
beneficiary in the income from or principal of such trust or estate, (vii) with
respect to a natural person, any relative or spouse of such person, 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, 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 or the fulfillment of a
condition or both) pursuant to any agreement, arrangement or understanding
(whether or not in writing), or upon the exercise of conversion rights,
exchange rights, other rights (other than these 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 or on behalf of such Person
or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange 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 that 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 the proviso 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 Rights 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) of the Exchange
Act) and shall not be deemed to own shares owned by another officer or
director of the Corporation.
Notwithstanding anything in this paragraph (d) to the contrary, a Person
engaged in the business of underwriting securities shall not be deemed the
"Beneficial Owner" of, or to "Beneficially Own," any securities acquired in good
faith in a firm commitment underwriting, until the expiration of forty days
after the date of such acquisition.
(e) "Book-Entry" shall mean an uncertificated book-entry for the
Corporation's Common Stock.
(f) "Business Day" shall mean any day other than a Saturday, Sunday, or day
on which banking institutions in the State of New Jersey are authorized or
obligated by law or executive order to close.
(g) "Xxxxxxxxx" shall mean Xxxxxxx X. Xxxxxxxxx and his Affiliates and
Associates.
(h) "Close of Business" on any given date shall mean 5:00 p.m., New York
City time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 p.m., New York City time, on the next succeeding Business
Day.
(i) "Common Stock," when used with reference to the Corporation, shall mean
the common stock, $0.01 par value, of the Corporation. "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 with
the greatest voting power of such Person. "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 which shall represent
the right to participate in profits, losses, deductions and credits of such
Person and which shall be entitled to exercise the greatest voting power of such
Person.
(j) "Continuing Director" shall mean any member of the Board of Directors,
while such person is a member of the Board of Directors, who is not an Acquiring
Person, or an Affiliate or Associate of an Acquiring Person, or a representative
or nominee of an Acquiring Person or of any such Affiliate or Associate, and who
either (i) was a member of the Board of Directors prior to the time that any
Person became an Acquiring Person or (ii) subsequently became a member of the
Board of Directors, and whose nomination for election or election to the Board
of Directors was recommended or approved by at least a majority of the
Continuing Directors then on the Board of Directors or by the sole remaining
Continuing Director then on the Board of Directors.
(k) "Distribution Date" shall have the meaning set forth in Section 3(b)
hereof.
(l) "Exchange Act" shall have the meaning set forth in Section 1(b) hereof.
(m) "Exempt Person" shall mean (i) the Corporation, (ii) any Subsidiary of
the Corporation (iii) Xxxxxxxxx, (iv) Xxxxxx (as hereinafter defined), or (v)
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 Common Stock for or pursuant to the terms of
any such plan; provided, however, that Xxxxxxxxx shall cease to be an Exempt
Person and shall become an Acquiring Person in the event Xxxxxxxxx (A) acquires
Beneficial Ownership of any additional shares of the Voting Stock of the Company
(other than pursuant to rights or options issued pursuant to plans approved by
the Board of Directors or shareholders of the Corporation), unless the
acquisition of such additional Voting Stock would not result in Xxxxxxxxx
becoming an Acquiring Person by reason of subclause (A) or (B) of clause (ii) of
Section 1(a) hereof or (B) commences, or announces an intention to commence, a
tender or exchange offer upon the successful consummation of which Xxxxxxxxx
would be the Beneficial Owner of 15% or more of the then outstanding Voting
Stock of the Company (irrespective of whether any shares are actually purchased
pursuant to any such offer); and provided, however, that Xxxxxx shall cease to
be an Exempt Person and shall become an Acquiring Person in the event Xxxxxx (A)
acquires Beneficial Ownership of any additional shares of the Voting Stock of
the Company (other than pursuant to rights or options issued pursuant to plans
approved by the Board of Directors or shareholders of the Corporation), unless
the acquisition of such additional Voting Stock would not result in Xxxxxx
becoming an Acquiring Person by reason of subclause (A) or (B) of clause (ii) of
Section 1(a) hereof or (B) commences, or announces an intention to commence, a
tender or exchange offer upon the successful consummation of which Xxxxxx would
be the Beneficial Owner of 15% or more of the then outstanding Voting Stock of
the Company (irrespective of whether any shares are actually purchased pursuant
to any such offer).
(n) "Exercise Price" shall have the meaning set forth in Sections 4 and
7(b) hereof.
(o) "Expiration Date" shall have the meaning set forth in Section 7(a)
hereof.
(p) "Fair Market Value" of any property shall mean the fair market value of
such property as determined in accordance with Section 11(b) hereof.
(q) "Xxxxxx" shall mean Xxxxxxxxx X. Xxxxxx, Xxxx X. Xxxxxx and their
respective Affiliates and Associates.
(r) "NASDAQ" shall mean the National Association of Securities Dealers,
Inc. Automated Quotation System or any successor thereto or other comparable
quotation system.
(s) "Person" shall mean any individual, firm, corporation or other entity.
(t) "Principal Party" shall have the meaning set forth in Section 13(b)
hereof.
(u) "Record Date" shall have the meaning set forth in the first Recital.
(v) "Redemption Price" shall have the meaning set forth in Section 23(a)
hereof.
(w) "Rights Certificate" shall have the meaning set forth in Section 3(d)
hereof.
(x) "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 shall
become aware of the existence of an Acquiring Person.
(y) "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.
(z) "Summary of Rights" shall have the meaning set forth in Section 3(a)
hereof.
(aa)"Trading Day" shall have the meaning set forth in Section 11(b) hereof.
(bb)"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 right, including Rights,
shares of Common Stock and shares of Preferred Stock.
(cc)"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 to vote together with the
Common Stock in respect of any merger, consolidation, sale of all or
substantially all of the Corporation's assets, liquidation, dissolution or
winding up. For purposes of this Agreement, Voting Stock shall include
securities of the type referred to in clauses (i) and (ii) above that trade on a
"when issued" basis on a national securities exchange or on the NASDAQ. 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 or in respect of
any 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 the Board of Directors in its good faith judgment, and such
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
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.
Section 3. Issuance of Rights 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
as of the Close of Business on 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 such earlier or later date (not
beyond the thirtieth day after the Stock Acquisition Date) as the Board of
Directors may from time to time fix by resolution adopted prior to the
Distribution Date that otherwise would have occurred 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, together with its Affiliates and Associates, would be the
Beneficial Owner of 15% or more of the then outstanding shares of Voting Stock
of the Corporation (irrespective of whether any shares are actually purchased
pursuant to any such offer) (the earlier of such dates being herein referred to
as the "Distribution Date"), (x) the Rights shall be evidenced by the
Book-Entries, or certificates for, Common Stock registered in the name of the
holders of Common Stock (together with, in the case of Book-Entries
representing, or the certificates for, Common Stock outstanding as of the Record
Date, the Summary of Rights) and not by separate Book-Entries or Rights
Certificates and the record holders of the Common Stock represented by such
Book-Entries or certificates 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), transfer on the Corporation's Direct Registration System of
any Common Stock represented by a Book-Entry or the surrender for transfer of
any certificate for 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 earlier of the
Distribution Date or the Expiration Date and, in certain circumstances provided
in Section 22 hereof, may be issued in respect of shares of Common Stock that
become outstanding after the Distribution Date. Certificates for Common Stock
(including, without limitation, certificates issued upon original issuance,
dispensation 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
or the Expiration Date (or, in certain circumstances as provided in Section 22
hereof, after the Distribution Date) shall have impressed, printed, written or
stamped thereon or otherwise affixed thereto the following legend:
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 Xxxxxx, Inc. (the
"Corporation") and First City Transfer Company (the "Rights Agent"), dated
as of February 1, 1999, as it may be amended from time to time (the "Rights
Agreement"), the terms of which are incorporated herein by reference and a
copy of which is on file at the principal executive offices of the
Corporation. Under certain circumstances, as set forth in the Rights
Agreement, such Rights shall be evidenced by separate certificates and
shall no longer be evidenced by this certificate. The Corporation shall
mail to the registered holder of this certificate a copy of the Rights
Agreement without charge within five days after receipt of a written
request therefor. UNDER CERTAIN CIRCUMSTANCES AS PROVIDED IN SECTION 7(e)
OF THE RIGHTS AGREEMENT, 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 TRANSFERRED TO ANY PERSON.
(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 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 "Rights 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 such Rights Certificates and may be transferred by the
transfer of the Rights Certificate as permitted hereby, separately and apart
from any transfer of one or more shares of Common Stock.
(e) In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the Expiration Date,
the Corporation (i) shall, with respect to shares of Common Stock so issued or
sold (x) pursuant to the exercise of stock options or under any employee plan or
arrangement or (y) upon the exercise, conversion or exchange of other securities
issued by the Corporation prior to the Distribution Date and (ii) may, in any
other case, if deemed necessary or appropriate by the Board of Directors of the
Corporation, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided that no such Rights
Certificate shall be issued if, and to the extent that, (i) the Corporation
shall be advised by counsel that such issuance would create a significant risk
of material adverse tax consequences to the Corporation or the Person to whom
such Rights Certificate would be issued or (ii) appropriate adjustment shall
otherwise have been made in lieu of the issuance thereof.
Section 4. Form of Rights Certificates.
(a) The Rights 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 Rights
Agreement. Subject to the provisions of Section 22 hereof, Rights 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 shares (including fractional shares which are integral multiples
of one one-hundredth of a share) of Preferred Stock as shall be set forth
therein at the price 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").
(b) Notwithstanding any other provision of this Rights Agreement, any
Rights Certificate that represents Rights Beneficially Owned by an Acquiring
Person or any Affiliate or Associate thereof or any other Person whose Rights
shall become void pursuant to Section 7(e) shall have impressed on, printed on,
written on or otherwise affixed to it (if the Corporation or the Rights Agent
has knowledge that such Person is an Acquiring Person or an Associate or
Affiliate or a nominee of any of the foregoing) the following legend:
The Beneficial Owner of the Rights represented by this Rights
Certificate is an Acquiring Person or an Affiliate or an Associate of an
Acquiring Person. Accordingly, this Rights Certificate and the Rights
represented hereby shall become void in the circumstances specified in
Section 7(e) of the Rights Agreement.
Section 5. Countersignature and Registration.
(a) Each Rights 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 to by the Secretary or an Assistant
Secretary of the Corporation, either manually or by facsimile signature. Each
Rights 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
Rights 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 Rights 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 Rights Certificates had not
ceased to be such officer of the Corporation. Any Rights Certificate may be
signed on behalf of the Corporation by any person who, on the date of the
execution of such Rights Certificate, shall be a proper officer of the
Corporation to sign such Rights Certificate, although at the date of the
execution of this Rights 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 the surrender of Rights Certificates upon exercise or
transfer, and in such other locations as may be required by law, books for
registration and transfer of the Rights Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each of the Rights
Certificates and the date of each of the Rights Certificates and any Rights
Certificates that have a legend printed thereon pursuant to Section 4(b).
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Sections 7(e), 7(f) and 14(b) hereof, at
any time after the Close of Business on the Distribution Date, and at or prior
to the Close of Business on the Expiration Date, any Rights Certificate, may be
(i) transferred or (ii) split up, combined or exchanged for one or more other
Rights Certificates, entitling the registered holder to purchase a like number
of shares of Preferred Stock as the Rights Certificate or Rights Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer any Rights Certificate shall surrender the Rights
Certificate at the office of the Rights Agent designated for the surrender of
Rights Certificates with the form of certificate and assignment on the reverse
side thereof duly endorsed (or, enclosed with such Rights Certificate, a written
instrument of transfer in a 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 Rights Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Rights Certificate to be split up, combined or exchanged at the office of
the Rights Agent. Thereupon, the Rights Agent shall countersign and deliver to
the person entitled thereto a Rights Certificate or Rights 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 Rights Certificates.
(b) Subject to the provisions of Sections 7(e), 7(f) and 14(b) hereof, upon
receipt by the Corporation and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them and, 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 Rights Certificate if mutilated, the Corporation shall issue and deliver a
new Rights Certificate of like tenor to the Rights Agent for delivery to the
registered owner in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Exercise Price; Expiration 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
23(a) 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 Rights 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 in
Iselin, NJ together with payment of the Exercise Price for each Right exercised,
subject to adjustment as hereinafter provided, at or prior to the Close of
Business on the earlier of (i) February 1, 2009 (or if the Distribution Date
shall have occurred before February 1, 2009, at the Close of Business on the
90th day following the Distribution Date) or (ii) the date on which the Rights
are redeemed as provided in Section 23 hereof (such earlier date being herein
referred to as the "Expiration Date").
(b) The Exercise Price shall initially be $5.50 for each one one-hundredth
(1/100th) of a share of Preferred Stock issued pursuant to the exercise of a
Right. The Exercise Price and the number of shares of Preferred Stock or other
securities 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 Rights
Certificate representing exercisable Rights with the form of election to
purchase 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 to be purchased and an amount equal to any
applicable Transfer Tax required to be paid by the holder of the Rights
Certificate in accordance with Section 9(e) hereof, the Rights Agent shall
thereupon promptly (i) requisition from any registrar or transfer agent (as may
be appropriate) 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 registrar or
transfer agent (as may be appropriate) 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 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 Rights 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
Rights 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 upon exercise
of a Right for a reasonable period, not in excess of 120 days, during which the
Corporation seeks to register under the Securities Act of 1933, as amended (the
"Act"), and any applicable securities law of any other jurisdiction, the shares
of Preferred Stock 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(c) hereof.
(d) In case the registered holder of any Rights Certificate shall exercise
less than all the Rights evidenced thereby, a new Rights Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Rights Certificate or his
assignee, subject to the provisions of Section 14(b) hereof.
(e) Notwithstanding any provision of this Rights 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 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 the Persons referred to in either clause (y) or (z)
above, shall be 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 Rights 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 a Rights Certificate or any other
Person as a result of the Corporation's failure to make any determination with
respect to an Acquiring Person or its Affiliates, Associates or transferees
hereunder. No Rights Certificate shall be issued pursuant to Section 3 hereof
that represents Rights Beneficially Owned by an Acquiring Person or any other
Person whose Rights would be void pursuant to the provisions of this Section
7(e) or any Associate, Affiliate or nominee thereof; no Rights Certificate shall
be issued at any time upon the transfer of any Rights to an Acquiring Person or
any other Person whose Rights would be void pursuant to the provisions of this
Section 7(e) or any Associate, Affiliate or nominee thereof; and any Rights
Certificate delivered to the Rights Agent for transfer to an Acquiring Person
whose Rights would be void pursuant to the provisions of this Section 7(e) shall
be canceled.
(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 Rights Certificate surrendered for such
exercise and (ii) provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof or a Person referred to in clause (y) or (z) of Section 7(e) and such
other information as the Corporation shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Corporation or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Corporation
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall cancel and retire, any Rights Certificate purchased or
acquired by the Corporation otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the Corporation, or
shall, at the written request of the Corporation, destroy such canceled Rights
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 its authorized and unissued shares of Preferred Stock
or out of authorized and issued shares of Preferred Stock held in its treasury,
such number of shares of Preferred Stock as will from time to time be sufficient
to permit the exercise in full of all outstanding Rights. The Corporation shall
take such action as may be required for it to comply with the foregoing sentence
of this Section 9(a).
(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 Rights 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 on NASDAQ or any successor thereto or other comparable
quotation system.
(c) The Corporation covenants and agrees that it will take all such actions
as may be necessary to insure 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, or (B) the Expiration
Date. The Corporation may temporarily suspend, for a period of time not to
exceed 120 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.
(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 Rights 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 Rights 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 Rights Certificate, and the Corporation shall not be required to
or issue or deliver a Rights 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 Rights
Certificate at the time of surrender) or until it has been established to the
Corporation's satisfaction that no such Transfer Tax is due.
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 Rights 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. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate, as such, shall not be entitled to any rights of
a stockholder of the Corporation with respect to shares for which the Rights
shall be exercisable, including, without limitation, the right to vote, to
receive dividends or other distributions or to exercise any preemptive rights,
and shall not be entitled to receive any notice of any proceedings of the
Corporation, except as provided herein.
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 and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Corporation shall at any time after the date of
this Rights Agreement (A) declare or pay any dividend on Common Stock
payable 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,
then and in each such event the number of shares 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 shares of Preferred Stock issuable
immediately prior to such event multiplied by a fraction the numerator of
which is the number of Rights outstanding immediately prior to such event
and the denominator of which is the number of Rights outstanding
immediately after such event and the Exercise Price after such event shall
be the Exercise Price in effect immediately prior to such event multiplied
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 (other than an Exempt Person), alone or together with its Affiliates
and Associates, shall become an Acquiring Person, then, subject to the last
sentence of Section 23(a) and 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 Rights Agreement and payment of the
Exercise Price, the greater of (1) the number of one one-hundredths of a
share of Preferred Stock for which such Right was exercisable immediately
prior to the first occurrence of the event described in this Section
11(a)(ii) or (2) such number of one one-hundredths of a share of Preferred
Stock as shall equal the result obtained by dividing the Exercise Price by
50% of the Fair Market Value of one one-hundredth of a share of Preferred
Stock (determined pursuant to Section 11(b) hereof) on the date of such
first occurrence; provided, however, that if the transaction that would
otherwise give rise to the foregoing adjustment is also subject to the
provisions of Section 13 hereof, then only the provisions of Section 13
hereof shall apply and no adjustment shall be made pursuant to this Section
11(a)(ii).
(iii) In the event that the Corporation does not have available
sufficient authorized but unissued Preferred Stock to permit the
adjustments required pursuant to the foregoing subparagraph (i) or the
exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Corporation shall take all such actions 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 subparagraphs (i) and (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, (A) cash, (B) other equity securities of
the Corporation, (C) debt securities of the Corporation, (D) other assets
or (E) any combination of the foregoing, in each case, 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 Rights 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 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 American Stock Exchange), or, if the securities are
not listed or admitted to trading on the American 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 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 provisions of 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 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) 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.
(d) 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 Rights 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 Rights Certificates issued hereunder but,
nevertheless, shall represent the Rights as so adjusted.
(e) 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-assessable shares of such Preferred
Stock at such adjusted purchase price per share.
(f) 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 Rights 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.
(g) In the event the Corporation shall at any time after the Record Date
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, in cash
or any debt security, debt instrument, real or personal property or any other
property (other than any shares of Common Stock or other capital stock of the
Corporation and other than any right or warrant to acquire any such shares,
including any debt security convertible into or exchangeable for any such share,
at less than the Fair Market Value of such shares) and the amount of such cash
dividend or the Fair Market Value of such debt security, debt instrument or
property exceeds 150% of the aggregate amount of the cash dividends declared or
paid on the Common Stock of the Corporation in the 15-month period immediately
preceding such distribution, then and in each such event, unless such
distribution is part of or is made in connection with a transaction to which
Section 11(a)(ii) or Section 13 hereof applies, the Exercise Price shall be
reduced by an amount equal to the cash or the Fair Market Value of such
distribution, as the case may be, per share of Common Stock of the Corporation.
For purposes hereof, the Fair Market Value of any property distributed to the
holders of shares of Common Stock of the Corporation shall be the Fair Market
Value of such property as determined by an independent investment banking firm
experienced in the valuation of securities or the other property so distributed,
as the case may be, 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, whose determination shall be
final and binding on the Corporation, the Rights Agent and the holders of
Rights.
Section 12. Certification of Adjusted Exercise Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11, 13 or 23(c), 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 Rights 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 Rights Agreement shall be
effective as of the date of the event 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 or Persons) 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 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 or any Affiliate or Associate of such Person, in one or more
transactions, or the Corporation or one or more of its Subsidiaries shall sell
or otherwise transfer to any Persons in one or a series of related 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 and payment of
the Exercise Price in accordance with the terms of this Rights Agreement, such
number of shares of validly issued, fully paid, non-assessable and freely
tradable Common Stock of the Principal Party (as defined herein), not subject to
any liens, encumbrances, rights of first refusal or other adverse claims, as
shall equal the result obtained by dividing the Exercise Price by 50% of the
Fair Market Value of the Common Stock of the Principal Party on the date of the
consummation 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 Rights Agreement; (iii) the term "Corporation"
for all purposes of this Rights 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 insure 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 (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 no securities
are so issued, (x) 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 (y) 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 (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, and 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 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.
(c) The Corporation shall not consummate any consolidation, merger or sale
or transfer of assets or earning power 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 Rights 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
Rights 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; and
(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 exercisable in the manner described in Section 13(a).
(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 corporate 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.
Section 14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue fractions of Rights or
to distribute Rights 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)
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 Rights 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 which are integral multiples of
one-hundredth of a share) upon exercise of the Rights or to distribute
certificates which evidence fractional shares (other than fractions which are
integral multiples of 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-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 Rights Certificates at the time
such Rights 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
Rights Agreement, except the rights of action given to the Rights Agent in
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock); and any holder of record of any Rights 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 Rights 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 Rights Certificate in the manner provided
in such Rights Certificate and, in this Rights Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Rights Agreement and 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 Rights
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
Book-Entries representing, or the certificates for, Common Stock registered in
the name of the holders of Common Stock (together, as applicable, with the
Summary of Rights), which Book-Entries representing, or the certificates for,
Common Stock shall also constitute certificates for Rights, and not by separate
Rights 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 Rights 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;
(c) The Corporation and the Rights Agent may deem and treat the person in
whose name the Rights Certificate (or, prior to the Distribution Date, the
associated Book-Entry representing, or certificate for, Common Stock) is
registered as the absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the Rights
Certificates or the associated 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.
(d) Notwithstanding anything in this Agreement to the contrary, neither the
Corporation nor the Rights Agent shall have any liability to any holder of a
Right or a beneficial interest in a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by reason of
any preliminary or permanent injunction or other order, decree or ruling issued
by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided,
however, the Corporation must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible; and
(e) Rights Beneficially Owned by certain persons will under certain
circumstances set forth in this Agreement become null and void pursuant to
Section 7(e) hereof; and
(f) This Agreement may be supplemented or amended from time to time
pursuant to Section 26 hereof.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Rights Certificate shall be entitled to vote, receive dividends
or 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 Rights
Certificate be construed to confer upon the holder of any Rights Certificate, 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
any meeting thereof (except as provided in Section 7(f) hereof), or to give or
withhold consent to any corporate action (except as provided in Section 7(f)
hereof), or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 26 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Rights Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The 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 Rights
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 negligence,
bad faith or willful misconduct on the part of the Rights Agent, for anything
done or failed to be done by the Rights Agent in connection with the acceptance
and administration of this Rights Agreement, including the costs and expenses of
defending against any claim of liability relating to the Rights or this Rights
Agreement.
(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 Rights Agreement in reliance upon any
Rights 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 Rights
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 Rights 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
Rights Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Rights Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all such cases
such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Rights Certificates so countersigned; in case at that time any of
the Rights Certificates shall not have been countersigned, the Rights Agent may
countersign such Rights Certificates either in its prior name or in its changed
name; in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the duties
and obligations imposed by this Rights Agreement upon the following terms and
conditions, by all of which the Corporation and the holders of Rights
Certificates by their acceptance thereof shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the 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 Rights 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 or the 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 Rights Agreement in reliance upon such
certificate.
(c) The Rights Agent shall be liable hereunder to the Corporation and any
other Person only for its own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Rights Agreement or in the
Rights 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 Rights Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Rights Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Corporation of any
covenant or condition contained in this Rights Agreement or in any Rights
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 Rights Certificates after receipt of a certificate describing any
such adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any shares
of Preferred Stock to be issued pursuant to this Rights Agreement or any Rights
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 Rights 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.
(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 financially 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 Rights 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.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Rights
Agreement upon 30 days notice in writing mailed to the 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 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 Rights Certificate (who shall, with such notice, submit his
Rights Certificate for inspection by the Corporation), then the incumbent Rights
Agent or the holder of record of any Rights Certificate may apply to any court
of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the 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 $50,000,000 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 Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of the
Rights Agent or the appointment of the successor Rights Agent, as the case may
be. 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 Rights Certificates. Notwithstanding any of the
provisions of this Rights Agreement or of the Rights to the contrary, the
Corporation may, at its option, issue new Rights Certificates evidencing Rights
in such form as may be approved by its Board of Directors to reflect any
adjustment or change in the Exercise Price per share and the number or kind or
class of shares of stock or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of this Rights
Agreement.
Section 23. Redemption.
(a) The Corporation may, at its option, but only by the vote of a majority
of the Board of Directors, redeem all but not less than all of the then
outstanding Rights, at any time prior to the Close of Business on the earlier of
(i) the tenth day following the Stock Acquisition Date (subject to extension by
the Corporation as provided in Section 26 hereof) or (ii) the Expiration Date,
at a redemption price of $0.01 per Right, subject to adjustments as provided in
subsection (c) below (the "Redemption Price"). Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable
pursuant to Section 11(a)(ii) prior to the expiration of the Corporation's right
of redemption hereunder.
(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 (1/100th) of a 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
Rights Agreement (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, or (D) combine or consolidate the
outstanding shares of Common Stock into a smaller number of shares of its
capital stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation), then, and in each such
event, the Redemption Price shall be appropriately adjusted to reflect the
foregoing.
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 11(g) 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 Rights
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 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 26 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 any of the transactions referred to in Section 11(a)(i), 11(g)
or 13 of this Rights Agreement are proposed, then, in any such case, the
Corporation shall give to each holder of Rights, in accordance with Section 25
hereof, notice of the proposal of such transaction at least 10 days prior to
consummating such transaction, which notice shall specify the proposed event and
the consequences of the event to holders of Rights under Section 11(a)(i), 11(g)
or 13 hereof, as the case may be, and, upon consummating such transaction, shall
similarly give notice thereof to each holder of Rights.
Section 25. Notices. Notices or demands authorized by this Rights Agreement
to be given or made by the Rights Agent or by the holder of record of any Rights
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:
Xxxxxx, Inc.
000 Xxxxx Xxxx
Xxxxxxxxx, XX 00000
(000) 000-0000
Attention: Xxxxxxx X. Xxxxxxxxx
Subject to the provisions of Section 21, any notice or demand authorized by this
Rights Agreement to be given or made by the Corporation or by the holder of
record of any Rights 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:
First City Transfer Company
X.X. Xxx 000
Xxxxxx, XX 00000
Re: Xxxxxx, Inc.
Notices or demands authorized by this Rights Agreement to be given or made by
the Corporation or the Rights Agent to the holder of record of any Rights
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, 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, the Corporation may, and
the Rights Agent shall if the Corporation so directs, supplement or amend this
Rights Agreement without the approval of any holders of Rights 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 Rights 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 Rights Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price or the
Expiration Date and supplements or amendments may be made after the time that
any Person becomes an Acquiring Person only if at the time of the action of the
Board of Directors approving such supplement or amendment there are then in
office not less than two Continuing Directors and such supplement or amendment
is approved by a majority of the Continuing Directors then in office.
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 void pursuant to the provisions of Section 7(e) 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.
(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 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
take all such action as may be necessary to authorize additional shares of
Common Stock for issuance upon exchange of the Rights.
(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 Rights 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 Rights
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 Rights Agreement. Nothing in this Rights
Agreement shall be construed to give to any Person or corporation other than the
Corporation, the Rights Agent and the registered holders of the Rights
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 Rights Agreement; but this Rights Agreement shall be for the
sole and exclusive benefit of the Corporation, the Rights Agent and the holders
of record of the Rights Certificates (and, prior to the Distribution Date, the
holders of Common Stock in their capacity as holders of the Rights).
Section 30. New Jersey Contract. This Rights Agreement and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of New Jersey 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 Rights Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 32. Descriptive Headings. Descriptive headings of the several
Sections of this Rights Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
Section 33. Severability. If any term, provision, covenant or restriction
of this Rights Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this rights agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 34. Determinations and Actions By the Board of Directors, Etc. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors in good faith shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all other parties, and
(y) not subject the Board of Directors to any liability to the holders of the
Rights.
IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to
be duly executed, all as of the day and year first above written.
XXXXXX, INC.
By: /s/ Xxxxxxx Xxxxxxxxx
--------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Chairman of the Board
and Chief Executive
Officer
FIRST CITY TRANSFER COMPANY
By: /s/ Xxxxxx X. Xxxxx
--------------------------------
Name: Xxxxxx X. Xxxxx
Title: Assistant Vice President
EXHIBIT A
TO RIGHTS AGREEMENT
UNDER CERTAIN CIRCUMSTANCES 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 TRANSFERRED TO ANY PERSON.
XXXXXX, INC.
SUMMARY OF RIGHTS TO PURCHASE
CLASS A PREFERRED STOCK, SERIES ONE
On February 1, 1999, the Board of Directors of XXXXXX, INC. (the
"Corporation") declared a dividend distribution of one preferred stock purchase
right for each outstanding share of Common Stock, par value $0.01 per share (the
"Common Stock"), of the Corporation held by stockholders of record on February
12, 1999 (the "Record Date"). Each Right entitles the registered holder to
purchase from the Corporation one one-hundredth (1/100th) of a share of
preferred stock of the Corporation, designated as Class A Preferred Stock Series
One (the "Preferred Stock") at a price of $5.50 per one one-hundredth (1/100th)
of a share (the "Exercise Price"). The description and terms of the Rights are
set forth in a Rights Agreement (the "Rights Agreement"), dated as of February
1, 1999, between the Corporation and First City Transfer Company, 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 the first date (the "Stock
Acquisition Date") on which there is 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") or such earlier or later
date (not beyond the thirtieth day after the Stock Acquisition Date) as the
Board of Directors may determine or (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 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 will not be exercisable, will not be represented by a
separate certificate, and will not be transferable apart from the Common Stock,
but will instead be evidenced, (i) with respect to any of the shares of Common
Stock held in uncertificated book-entry form (a "Book-Entry") outstanding as of
the Record Date, by such Book-Entry and (ii) with respect to the shares of
Common Stock evidenced by Common Stock certificates outstanding as of the Record
Date, by such Common Stock certificate, together with a copy of this Summary of
Rights. An Acquiring Person does not include (A) the Corporation, (B) any
Subsidiary of the Corporation (C) Xxxxxxx X. Xxxxxxxxx, (D) Xxxxxxxxx X. and
Xxxx X. Xxxxxx, (E) 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 Common Stock for or pursuant to the
terms of any such plan, or (F) any person or group whose ownership of 15% or
more of the shares of voting stock of the Company then outstanding results
solely from (i) any action or transaction or transactions approved by the
Company's 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 Company pursuant to a transaction or transactions approved
by the Company's 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% or more of the
Company's voting stock unless such acquisition of additional voting stock will
not result in such person or group becoming an Acquiring Person by reason of
such clause (i) or (ii), and provided further that Xxxxxxxxx shall become an
Acquiring Person if Xxxxxxxxx acquires Beneficial Ownership of any additional
shares of the voting stock of the Company (unless the acquisition of such
additional voting stock would not result in Xxxxxxxxx becoming an Acquiring
Person by reason of clause (i) or (ii) above) or commences, or announces an
intention to commence, a tender or exchange offer upon the successful
consummation of which Xxxxxxxxx would be the beneficial owner of 15% or more of
the voting stock of the Company (irrespective of whether any shares are actually
purchased pursuant to any such offer)), and provided further that Xxxxxxxxx X.
and Xxxx X. Xxxxxx shall become an Acquiring Person if Xxxxxxxxx X. or Xxxx X.
Xxxxxx acquires Beneficial Ownership of any additional shares of the voting
stock of the Company (unless the acquisition of such additional voting stock
would not result in Xxxxxxxxx X. or Xxxx X. Xxxxxx becoming an Acquiring Person
by reason of clause (i) or (ii) above) or commences, or announces an intention
to commence, a tender or exchange offer upon the successful consummation of
which Xxxxxxxxx X. or Xxxx X. Xxxxxx would be the beneficial owner of 15% or
more of the voting stock of the Company (irrespective of whether any shares are
actually purchased pursuant to any such offer)). For purposes of the foregoing,
outstanding voting stock of the Corporation includes voting stock that trades on
a "when issued" basis on a national securities exchange or on the National
Association of Securities Dealers, Inc. Automated Quotation System ("NASDAQ").
Until the Distribution Date (or earlier redemption or expiration of the
Rights), new Common Stock certificates issued after February 12, 1999 will
contain a legend incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), transfer
on the Corporation's Direct Registration System of any Common Stock represented
by a Book-Entry or a certificate outstanding as of February 12, 1999, and, in
each case, 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 Book-Entry or certificate. As soon as practicable following
the Distribution Date, separate certificates evidencing the Rights ("Rights
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 Rights Certificates
alone will evidence the Rights from and after the Distribution Date.
The Rights are not exercisable until the Distribution Date. Unless earlier
redeemed by the Corporation as described below, the Rights will expire at the
close of business on February 1, 2009 (the "Expiration Date") (or, if the
Distribution Date shall have occurred before February 1, 2009, at the close of
business on the 90th day following the Distribution Date).
The Preferred Stock is nonredeemable and, unless otherwise provided in
connection with the creation of a subsequent series of preferred stock (i)
subordinate to any other series of the Corporation's preferred stock and (ii)
senior to the Common 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 (i) 100
times the cash dividends declared on the Corporation's Common Stock, and (ii) a
preferential cash dividend, if any, in preference to holders of Common Stock in
an amount equal to $50.00 per share of Preferred Stock less the per share amount
of all cash dividends declared on the Preferred Stock pursuant to clause (i)
since the immediately preceding quarterly dividend payment date. In addition,
Preferred Stock is entitled to 100 times any noncash 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 $1.00 per one one-hundredth of a
share plus accrued and unpaid dividends and distributions thereon 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. If
the dividends accrued on the Preferred Stock for four or more quarterly dividend
periods, whether consecutive or not, shall not have been declared and paid or
irrevocably set aside for payment, the holders of record of the Preferred Stock
of the Corporation of all series (including the Preferred Stock) will have the
right to elect two members to the Corporation's Board of Directors.
The number of shares of Preferred Stock issuable upon exercise of the
Rights is 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 is subject to adjustment in the event of
extraordinary distributions of cash or other property to holders of Common
Stock.
Unless the Rights are earlier redeemed, 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, other than the Acquiring Person, 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 provision 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 one one-hundredths of a share of 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 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.
At any time on or prior to the close of business on the earlier of (i) the
tenth day after the Stock Acquisition Date (or such later date as a majority of
the Board of Directors may determine) or (ii) the Expiration Date, the
Corporation may redeem the Rights in whole, but not in part, at a price of $0.01
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, 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.
Amendments to the Rights Agreement from and after the time that any Person
becomes an Acquiring Person and amendments to the redemption price or expiration
date of the Rights require the approval of a majority of the Continuing
Directors (as defined and provided in the Rights Agreement).
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 Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Corporation's report on Form 8-K dated
February 2, 1999. 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.
EXHIBIT B
TO RIGHTS AGREEMENT
[Form of Rights Certificate]
Certificate No. W - ________ Rights
NOT EXERCISABLE AFTER (I) FEBRUARY 1, 2009, OR (II) IF THE
DISTRIBUTION DATE (AS DEFINED BELOW) SHALL HAVE OCCURRED
BEFORE THE DATE SPECIFIED IN CLAUSE (I), THE DATE WHICH IS
NINETY (90) DAYS AFTER FEBRUARY 1, 2009, OR EARLIER IF
REDEEMED. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY AND UNDER CERTAIN OTHER CIRCUMSTANCES,
AT $0.005 PER RIGHT (SUBJECT TO ADJUSTMENT), ON THE TERMS
SET FORTH OR REFERRED TO IN THE RIGHTS AGREEMENT. UNDER
CERTAIN CIRCUMSTANCES 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 TRANSFERRED TO ANY PERSON.
Rights 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") between Xxxxxx,
Inc. (the "Corporation"), and First City Transfer Company, (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. (New York
City time) on February 1, 2009 (or if the Distribution Date shall have occurred
before February 1, 2009, at the close of business on the 90th day following the
Distribution Date) at the office of the Rights Agent designated in the Rights
Agreement for such purpose, or its successor as Rights Agent, in Iselin, NJ, one
one-hundredth (1/100th) of a fully paid nonassessable share of Class A Preferred
Stock Series One, $0.01 par value per share, of the Corporation (the "Preferred
Stock") at a purchase price of $5.50, 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 Rights 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 Rights Certificate are subject to modification and adjustment
upon the happening of certain events and, upon 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 Rights Certificate, as
provided in the Rights Agreement.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
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 Rights Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the
Corporation.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated in the Rights Agreement
for such purpose, may be exchanged for another Rights Certificate or Rights
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 Rights Certificate or Rights Certificates surrendered
shall have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender
hereof, another Rights Certificate or Rights Certificates for the number of
whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Corporation at its option or under
certain other circumstances at a redemption price of $0.01 per Right. No
fractional shares of Preferred Stock (other than fractions which are integral
multiples of one one-hundredth (1/100th) 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 Rights 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 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 Rights Certificate shall have been
exercised as provided in the Rights Agreement. This Rights Certificate shall not
be valid or obligatory for any purpose until it shall have been countersigned by
the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Corporation
and its corporate seal. Dated as of _____________, ____.
ATTEST:
______________________________ By: _______________________________
Secretary Title:
Countersigned:
FIRST CITY TRANSFER COMPANY
By: _______________________________
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
the Rights Certificates.)
FOR VALUE RECEIVED ________________________________________________________
hereby sells, assigns and transfers unto
________________________________________________________________________________
(Please print name and address of transferee)
Rights evidenced by this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and appoint
_______________________________ Attorney to transfer the within Rights
Certificate on the books of the within-named Corporation, with full power of
substitution.
Dated: ____________, ____
_______________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned 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 Rights 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 Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder
desires to exercise the Rights Certificate.)
TO:_________________
The undersigned hereby irrevocably elects to exercise _________________
Rights represented by this Rights Certificate to purchase the shares of
Preferred Stock issuable upon the exercise of 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 Rights
Certificate, a new Rights 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
Rights Certificate)
Signature Guaranteed
EXHIBIT C
TO RIGHTS AGREEMENT
FORM OF CERTIFICATE OF DESIGNATIONS
OF
CLASS A PREFERRED STOCK, SERIES ONE
OF
XXXXXX, INC.
I, [name], [title] of Xxxxxx, Inc. (the "Corporation"), a corporation organized
and existing under the New Jersey Business Corporation Act (the "NJBCA"), in
accordance with the provisions of the NJBCA, DO HEREBY CERTIFY that: pursuant to
the authority conferred upon the Board of Directors by the Amended and Restated
Certificate of Incorporation of the Corporation, as amended, and pursuant to the
NJBCA the Board of Directors on February 1, 1999 adopted the following
resolution which creates a series of 1,000,000 shares of Preferred Stock
designated as Class A Preferred Stock, Series One.
RESOLVED, that pursuant to the authority vested in the Board of Directors
of the Corporation in accordance with the provisions of its Amended and Restated
Certificate of Incorporation, a series of Preferred Stock of the Corporation be,
and hereby is, created and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional or other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series shall be
designated as "Class A Preferred Stock, Series One" (the "Series One Preferred
Stock") and the number of shares constituting such series shall be 1,000,000.
Section 2. Dividends and Distributions.
(A) Subject to the provisions for adjustment hereinafter set forth, the
holders of shares of Series One 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, on the first day of February, May, August and
November 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 One Preferred Stock, in an amount (except in the
case of the first Quarterly Dividend Payment Date if the date of the first
issuance of Series One 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 $50.00 per share of Series One Preferred Stock less the per
share amount of all cash dividends declared on the Series One Preferred Stock
pursuant to clause (i) of this sentence since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series One Preferred Stock. In the event the Corporation shall, at any time
after the issuance of any share or fraction of a share of Series One 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
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 One 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 adjustment
hereinafter set forth). The dividends and distributions on the Series One
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 "Participating Dividends" and the
multiple of such cash and non-cash dividends on the Common Stock applicable to
the determination of the Participating 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 February 1, 1999 (the "Effective Date") 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, or issue any of its capital stock in a
reclassification of the Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Corporation is the
continuing or surviving corporation), then in each such case the Dividend
Multiple thereafter applicable to the determination of the amount of
Participating Dividends which holders of shares of Series One 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 Participating Dividend at the same
time it declares any cash or non-cash dividend or distribution on the Common
Stock in respect of which a Participating Dividend is required to be paid. No
cash or non-cash dividend or distribution on the Common Stock in respect of
which a Participating Dividend is required to be paid shall be paid or set aside
for payment on the Common Stock unless a Participating Dividend in respect of
such dividend or distribution on the Common Stock shall be simultaneously paid,
or set aside for payment, on the Series One Preferred Stock.
(C) Preferential Dividends shall begin to accrue on outstanding shares of
Series One Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issuance of any shares of Series One Preferred Stock.
Accrued but unpaid Preferential Dividends shall cumulate but shall not bear
interest. Preferential Dividends paid on the shares of Series One 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 One Preferred
Stock shall have the following voting rights:
(A) Subject to the provisions for adjustment hereinafter set forth, each
share of Series One Preferred Stock shall entitle the holder thereof to 100
votes on all matters submitted to a vote of the stockholders of the Corporation.
The number of votes which a holder of Series One Preferred Stock is entitled to
cast, as the same may be adjusted from time to time as hereinafter provided, is
hereinafter referred to as the "Vote Multiple." In the event the Corporation
shall at any time after the Effective Date 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, or issue any of
its capital stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation), 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 One 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-Laws, the holders of shares of Series One
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 One
Preferred Stock for four or more quarterly dividend periods, whether consecutive
or not, shall not have been declared and paid or set apart for payment, the
holders of record of Preferred Stock of the Corporation of all series (including
the Series One Preferred Stock), other than any series in respect of which such
right is expressly withheld by the Amended and Restated Certificate of
Incorporation or the authorizing resolutions included in the Certificate of
Designations 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 by the
By-Laws 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 One Preferred Stock shall have
been paid (or irrevocably set aside for payment) in full. The holders of shares
of Series One 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 outstanding shares of Series One
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 stockholders and shall not be taken by written consent thereto.
(D) Except as otherwise required by the Certificate of incorporation or
By-Laws or set forth herein, holders of Series One Preferred Stock shall have no
special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth
herein) for the taking of any corporate action.
Section 4. Certain Restrictions.
(A) Whenever Preferential Dividends or Participating Dividends are in
arrears or the Corporation shall be in default of payment thereof, thereafter
and until all accrued and unpaid Preferential Dividends and Participating
Dividends, whether or not declared, on shares of Series One Preferred Stock
outstanding shall have been paid or set aside for payment in full, and in
addition to any and all other rights which any holder of shares of Series One
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 One Preferred Stock;
(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 One
Preferred Stock, unless dividends are paid ratably on the Series One
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 One 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 One Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Series One Preferred Stock, or any shares of stock ranking on a parity with
the Series One 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 otherwise 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 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.
(C) The Corporation shall not issue any shares of Series One Preferred
Stock except upon exercise of Rights issued pursuant to that certain Rights
Agreement dated as of February 1, 1999 between the Corporation and First City
Transfer Company, 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 One Preferred Stock.
Section 5. Reacquired Shares. Any shares of Series One Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled 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 One Preferred Stock unless the holders of shares of Series One Preferred
Stock shall have received, subject to adjustment as hereinafter provided, (A)
$100 ($1.00 per one one-hundredth of a share) 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
liquidation, dissolution or winding up with the Series One Preferred Stock,
unless simultaneously therewith distributions are made ratably on the Series One
Preferred Stock and all other shares of such parity stock in proportion to the
total amounts to which the holders of shares of Series One 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 or
winding up. The amount to which holders of Series One 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 this event the Corporation shall
at any time after the Effective Date 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, or issue any of
its capital stock in a reclassification of the Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation, then in each such case
the Liquidation Multiple thereafter applicable to the determination of the
Participating Liquidation Amount to which holders of Series One 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 Effective Date, 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 One Preferred Stock shall be adjusted so that after such event the
holders of Series One Preferred Stock shall be entitled, in respect of each
share of Series One 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 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 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 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 Effective Date, 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 (as
hereinafter defined) 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 One 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 Effective Date 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 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 One Preferred Stock shall each be adjusted so that after
such event each holder of a share of Series One Preferred Stock shall be
entitled, in respect of each share of Series One 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 additional
voting rights as equal the Vote Multiple in effect immediately 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 distribution
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
contemplated 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 denominator 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 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 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 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 American Stock Exchange), or, if
the shares are not listed or admitted to trading on the American 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 in 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
American 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.
Section 8. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each
outstanding share of Series One 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 One 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 One 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 One 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 One Preferred Stock in any other manner permitted by
law, the provisions hereof and the 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 series of preferred stock of the Corporation established after the
issuance of any share of Series One Preferred Stock or any right, warrant, or
option providing for the issuance thereof, the Series One Preferred Stock shall
rank, as to the payment of dividends and the distribution of assets on
liquidation, dissolution or winding up, (i) junior to all other series of the
Corporation's Preferred Stock and (iv) senior to the Common Stock.
Section 12. Amendment. The provisions hereof and the Certificate of
Incorporation of the Corporation shall not be amended in any manner which would
adversely affect the rights, privileges or powers of the Series One Preferred
Stock without, in addition to any other vote of stockholders required by law,
the affirmative vote of the holders of two-thirds or more of the outstanding
shares of Series One Preferred Stock, voting together as a single class.
Section 13. Fractional Shares. Series One Preferred Stock may be issued in
fractions of a share (in one one-hundredths (1/100th) of a share and integral
multiples thereof) that shall entitle the holder thereof, in proportion to such
holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and have the benefit of all other rights of holders
of shares of Series One Preferred Stock.
IN WITNESS WHEREOF, I have executed and subscribed this Certificate to
Designations and do affirm the foregoing as true under the penalties of perjury
this 2nd day of February, 1999.
------------------------------------
Name: Xxxxxxx Xxxxxxxxx
Title: Chairman of the Board
and Chief Executive Officer
