EXHIBIT 1
VERILINK CORPORATION
and
EQUISERVE TRUST COMPANY, N.A.
RIGHTS AGREEMENT
Dated as of November 29, 2001
TABLE OF CONTENTS
Page
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Section 1. Certain Definitions.....................................................1
Section 2. Appointment of Rights Agent.............................................5
Section 3. Issue of Right Certificates.............................................5
Section 4. Form of Right Certificates..............................................6
Section 5. Countersignature and Registration.......................................7
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates.................7
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...........8
Section 8. Cancellation and Destruction of Right Certificates.....................10
Section 9. Company Covenants Concerning Securities and Rights.....................10
Section 10. Record Date............................................................11
Section 11. Adjustment of Purchase Price, Number and Kind of Securities or Number
of Rights..............................................................12
Section 12. Certificate of Adjusted Purchase Price or Number of Securities.........19
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...19
Section 14. Fractional Rights and Fractional Securities............................21
Section 15. Rights of Action.......................................................23
Section 16. Agreement of Rights Holders............................................23
Section 17. Right Certificate Holder Not Deemed a Stockholder......................24
Section 18. Concerning the Rights Agent............................................24
Section 19. Merger or Consolidation or Change of Name of Rights Agent..............25
Section 20. Duties of Rights Agent.................................................25
Section 21. Change of Rights Agent.................................................27
Section 22. Issuance of New Right Certificates.....................................28
Section 23. Redemption.............................................................28
Section 24. Notice of Certain Events...............................................29
Section 25. Notices................................................................30
Section 26. Supplements and Amendments.............................................31
Section 27. Exchange...............................................................31
Section 28. Successors; Certain Covenants..........................................32
Section 29. Benefits of this Agreement.............................................32
Section 30. Determinations and Actions by the Board of Directors, etc..............32
Section 31. Severability...........................................................33
Section 32. Governing Law..........................................................33
Section 33. Counterparts...........................................................33
Section 34. Descriptive Headings...................................................33
Signatures...........................................................................34
Certificate of Designations of Series A Junior Participating Preferred Stock........A-1
Form of Right Certificate...........................................................B-1
Summary of Rights to Purchase Preferred Shares......................................C-1
RIGHTS AGREEMENT
This RIGHTS AGREEMENT, dated as of November 29, 2001 (this
"Agreement"), is made and entered into by and between VERILINK CORPORATION, a
Delaware corporation (the "Company"), and EquiServe Trust Company, N.A., a
national banking association (the "Rights Agent").
RECITALS
WHEREAS, on November 29, 2001, the Board of Directors of the Company
authorized and declared a dividend distribution of one right ("Right") for each
share of Common Stock, par value $0.01 per share, of the Company (a "Common
Share") outstanding as of the Close of Business (as hereinafter defined) on
December 12, 2001 (the "Record Date"), each Right initially representing the
right to purchase one one-thousandth of a Preferred Share (as hereinafter
defined), upon the terms and subject to the conditions herein set forth, and
further authorized and directed the issuance of one Right with respect to each
Common Share issued or delivered by the Company (whether originally issued or
delivered from the Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date (as hereinafter defined) and the Expiration
Date (as 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 who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 20% or more of the Common Shares then outstanding. Notwithstanding the
foregoing, (A) the term "Acquiring Person" shall not include (i) the Company,
(ii) any subsidiary of the Company, (iii) any employee benefit or stock
ownership plan of the Company, or of any Subsidiary of the Company, or any
person or entity organized, appointed or established by the Company for or
pursuant to the terms of any such plan, or (iv) any Person, who or which
together with all Affiliates and Associates of such Person becomes the
Beneficial Owner of 20% or more of the then outstanding Common Shares as a
result of the acquisition of Common Shares directly from the Company, and (B) no
Person shall be deemed an "Acquiring Person" either (X) solely as a result of
the acquisition of Common Shares by the Company unless and until such Person,
after becoming aware that such Person has become the Beneficial Owner of 20% or
more of the then outstanding Common Shares, acquires beneficial ownership of
additional Common Shares representing 1% or more of the Common Shares then
outstanding, or (Y) if (i) within 8 days after such Person would have otherwise
have become an Acquiring Person (but for the operation of this subclause Y),
such Person notifies the Board of Directors that such Person did so
inadvertantly and
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(ii) within 2 days after such notification, such Person is the Beneficial Owner
of less than 20% of the outstanding Common Shares.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, and to
"beneficially own," any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such right
is exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, rights, warrants or options, or
otherwise (in each case, other than upon exercise or exchange of the Rights);
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
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of,
including pursuant to any agreement, arrangement or understanding (whether or
not in writing); or
(iii) of which any other Person is the Beneficial Owner, if such
Person or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) with such other Person
(or any of such other Person's Affiliates or Associates) with respect to
acquiring, holding, voting or disposing of any securities of the Company;
provided, however, that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security (A) if such Person has the right to vote such
security pursuant to an agreement, arrangement or understanding (whether or not
in writing) which (1) arises solely from a revocable proxy given to such Person
in response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations of the Exchange Act and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report), or (B) if such beneficial ownership arises
solely as a result of such Person's status as a "clearing agency", as defined in
Section 3(a)(23) of the Exchange Act; and provided, further, that nothing in
this paragraph (c) shall cause a Person engaged in business as an underwriter of
securities to be the Beneficial Owner of, or to beneficially own, any securities
acquired through such Person's participation in good faith in an underwriting
syndicate until the expiration of 40 calendar days after the date of such
acquisition, or such later date as the Board of Directors of the Company may
determine in any specific case.
(d) "Business Day" shall mean any day other than a Saturday, Sunday or
a day on which banking institutions in the State of Delaware or the State of New
York (or such
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other state in which the principal office of the Rights Agent is located) are
authorized or obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M., Eastern
time, on such date; provided, however, that if such date is not a Business Day
it shall mean 5:00 P.M., Eastern time, on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company shall mean
the Common Stock, par value $0.01 per share, of the Company; provided, however,
that, if the Company is the continuing or surviving corporation in a transaction
described in Section 11(a)(ii) or Section 13(a)(ii) hereof, "Common Shares" when
used with reference to the Company shall mean the capital stock or equity
security with the greatest aggregate voting power of the Company. "Common
Shares" when used with reference to any corporation or other Person, other than
the Company, including an Issuer, shall mean the capital stock or equity
security with the greatest aggregate voting power of such corporation or other
Person.
(g) "Company" shall mean Verilink Corporation, a Delaware corporation.
(h) "Distribution Date" shall mean the earliest of: (i) the Close of
Business on the tenth Business Day (or, unless the Distribution Date shall have
previously occurred, such later date as may be specified by the Board of
Directors of the Company) after the Share Acquisition Date, (ii) the Close of
Business on the tenth Business Day (or, unless the Distribution Date shall have
previously occurred, such later date as may be specified by the Board of
Directors of the Company) after the date of the commencement of a tender or
exchange offer by any Person (other than the Company or any Subsidiary of the
Company or any employee benefit or stock ownership plan of the Company or of any
Subsidiary of the Company or any Person holding Common Shares for or pursuant to
the terms of any such plan), if upon the consummation thereof such Person would
be the Beneficial Owner of 20% or more of the outstanding Common Shares, and
(iii) the Close of Business on the tenth Business Day after the first date of
public announcement by the Company or an Acquiring Person (by press release,
filing made with the Securities and Exchange Commission or otherwise) of the
first occurrence of a Triggering Event; provided, however, that if the earliest
of such dates would otherwise occur prior to the Record Date, the Distribution
Date shall mean the Close of Business on the Record Date.
(i) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
(j) "Expiration Date" shall mean the earliest of (i) the Close of
Business on the Final Expiration Date, (ii) the time at which the Rights are
redeemed as provided in Section 23 hereof, and (iii) the time at which all
exercisable Rights are exchanged as provided in Section 27 hereof.
(k) "Final Expiration Date" shall mean the tenth anniversary of the
Record Date.
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(l) "Flip-in Event" shall mean any event described in Section 11(a)(ii)
hereof.
(m) "Flip-over Event" shall mean any event described in subsections
(i), (ii) or (iii) of Section 13(a) hereof.
(n) "Issuer" shall have the meaning set forth in Section 13(b) hereof.
(o) "Person" shall mean any individual, firm, corporation or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(p) "Preferred Shares" shall mean shares of Series A Junior
Participating Preferred Stock, without par value, of the Company having the
rights and preferences set forth in the Form of Certificate of Designations of
Series A Junior Participating Preferred Stock attached to this Agreement as
Exhibit A.
(q) "Purchase Price" shall mean initially $22.00 per one one-thousandth
of a Preferred Share and shall be subject to adjustment from time to time as
provided in this Agreement.
(r) "Redemption Price" shall mean $0.001 per Right, subject to
adjustment by resolution of the Board of Directors of the Company to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof.
(s) "Right" shall have the meaning set forth in the Recitals to this
Agreement.
(t) "Right Certificates" shall mean certificates evidencing the Rights,
in substantially the form of Exhibit B attached hereto.
(u) "Rights Agent" shall mean EquiServe Trust Company, N.A., unless and
until a successor Rights Agent shall have become such pursuant to the terms of
this Agreement, and thereafter, "Rights Agent" shall mean such successor Rights
Agent.
(v) "Securities Act" shall mean the Securities Act of 1933, as amended.
(w) "Share Acquisition Date" shall mean the first date of public
announcement by the Company or an Acquiring Person (by press release, filing
made with the Securities and Exchange Commission or otherwise) that an Acquiring
Person has become such.
(x) "Subsidiary" when used with reference to any Person shall mean any
corporation or other legal entity of which a majority of the voting power of the
voting equity securities or equity interests is owned, directly or indirectly,
by such Person; provided, however, that for purposes of Section 13(b) hereof,
"Subsidiary" when used with reference to any Person shall mean any corporation
or other legal entity of which at least 20% of the voting power of the voting
equity securities or equity interests is owned, directly or indirectly, by such
Person.
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(y) "Summary of Rights to Purchase Preferred Shares" shall mean the
Summary of Rights to Purchase Preferred Shares, in substantially the form of
Exhibit C attached hereto.
(z) "Trading Day" shall mean any day on which the principal national
securities exchange on which the Common Shares are listed or admitted to trading
is open for the transaction of business or, if the Common Shares are not listed
or admitted to trading on any national securities exchange, a Business Day.
(aa) "Triggering Event" shall mean any Flip-in Event or Flip-over
Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall also be, prior to the Distribution
Date, the holders of the Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment and
hereby certifies that it complies with the requirements of the New York Stock
Exchange and the Nasdaq Stock Market governing transfer agents and registrars.
The Company may from time to time act as co-Rights Agent or appoint such
co-Rights Agents as it may deem necessary or desirable upon ten (10) days
written notice to the Rights Agent. The Rights Agent shall have no duty to
supervise, and in no event shall be liable for, the acts and omissions of such
co-Rights Agent Any actions which may be taken by the Rights Agent pursuant to
the terms of this Agreement may be taken by any such co-Rights Agent. To the
extent that any co-Rights Agent takes any action pursuant to this Agreement,
such co-Rights Agent shall be entitled to all of the rights and protections of,
and subject to all of the applicable duties and obligations imposed upon, the
Rights Agent pursuant to the terms of this Agreement.
Section 3. Issue of Right Certificates. (a) Until the Distribution
Date, (i) the Rights shall be evidenced by the certificates representing Common
Shares registered in the names of the record holders thereof (which certificates
representing Common Shares shall also be deemed to be Right Certificates),
together with a copy of the Summary of Rights, (ii) the Rights shall be
transferable only in connection with the transfer of the underlying Common
Shares, and (iii) the surrender for transfer of any certificates evidencing
Common Shares in respect of which Rights have been issued, with or without a
copy of the Summary of Rights, shall also constitute the transfer of the Rights
associated with the Common Shares evidenced by such certificates.
(b) As promptly as practicable after the Record Date, the Company shall
send a copy of the Summary of Rights to Purchase Preferred Shares in
substantially the form attached hereto as Exhibit C, by first-class, postage
prepaid mail, to each record holder of Common Shares as of the close of business
on the Record Date, at the address of such holder shown on the records of the
Company as of such date.
(c) Rights shall be issued by the Company in respect of all Common
Shares (other than Common Shares issued upon the exercise or exchange of any
Right) issued or
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delivered by the Company (whether originally issued or delivered from the
Company's treasury) after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date. Certificates evidencing such Common
Shares shall have stamped on, impressed on, printed on, written on or otherwise
affixed to them the following legend or such similar legend as the Company may
deem appropriate (which do not affect the duties or responsibilities of the
Rights Agent) and as is not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or transaction reporting system on which the Common Shares may from
time to time be listed or quoted, or to conform to usage:
This Certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between Verilink
Corporation and EquiServe Trust Company, N.A., dated as of November 29,
2001 (the "Rights Agreement"), the terms of which are hereby
incorporated herein by reference and a copy of which is on file at the
principal executive offices of Verilink Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights may be
redeemed, may expire, may be amended or may be evidenced by separate
certificates and no longer be evidenced by this Certificate. Verilink
Corporation will mail to the holder of this Certificate a copy of the
Rights Agreement without charge promptly after receipt of a written
request therefor. Under certain circumstances as set forth in the
Rights Agreement, Rights beneficially owned by an Acquiring Person or
any Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement) may become null and void.
(d) As promptly as practicable after the Distribution Date, the
Company shall prepare and execute, the Rights Agent shall countersign and the
Company shall send or cause to be sent (and the Rights Agent shall, if
requested, send), by first-class, insured, postage prepaid mail, to each record
holder of Common Shares as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, a Right
Certificate, evidencing one Right for each Common Share so held, subject to
adjustment. As of and after the Distribution Date, the Rights shall be evidenced
solely by such Right Certificates.
Section 4. Form of Right Certificates. The Right Certificates (and the
form of election to purchase and form of assignment to be printed on the reverse
thereof) shall be substantially in the form set forth as Exhibit B hereto with
such changes, marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate provided
that such marks, legends, summaries or endorsements do not affect the rights,
duties or responsibilities of the Rights Agent and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply with any
applicable law or with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange or transaction reporting system on
which the Rights may from time to time be listed or quoted, or to conform to
usage. Subject to the provisions of Section 22 hereof, the Right Certificates,
whenever issued, on their face
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shall entitle the holders thereof to purchase such number of one one-thousandths
of a Preferred Share as shall be set forth therein at the Purchase Price set
forth therein, but the Purchase Price, the number and kind of securities
issuable upon exercise of each Right and the number of Rights outstanding shall
be subject to adjustment as provided herein.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, Chief Executive Officer, President or Chief Financial Officer, either
manually or by facsimile signature, and shall have affixed thereto the Company's
seal or a facsimile thereof which shall be attested by the Secretary or an
Assistant Secretary of the Company, either manually or by facsimile signature.
The Right Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Right Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent, and issued and delivered by the
Company with the same force and effect as though the person who signed such
Right Certificates had not ceased to be such officer of the Company; and any
Right Certificate may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right 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, receipt by the Rights Agent
of written notice to that effect and all relevant information set forth in
Section 3(a), the Rights Agent shall keep or cause to be kept, at the principal
office of the Rights Agent designated for such purpose and at such other offices
as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange or any transaction reporting system on which the Rights may from time
to time be listed or quoted, books for registration and transfer of the Right
Certificates issued hereunder. Such books shall show the names and addresses of
the respective holders of the Right Certificates, the number of Rights evidenced
on its face by each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Sections 7(d) and 14 hereof, at any time after the
Close of Business on the Distribution Date and prior to the Expiration Date, any
Right Certificate or Right Certificates representing exercisable Rights may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
one one-thousandths of a Preferred Share (or other securities, as the case may
be) as the Right Certificate or Right Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any such
Right Certificate shall make such request in writing delivered to the Rights
Agent, and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent designated for such purpose. Thereupon or as promptly as
practicable
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thereafter, subject to the provisions of Sections 7(d) and 14 hereof, the
Company shall prepare, execute and deliver to the Rights Agent, and the Rights
Agent shall countersign and deliver a Right Certificate or Right Certificates,
as the case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security reasonably satisfactory to them, and reimbursement to the Company and
the Rights Agent of all reasonable expenses incidental thereto, and upon
surrender to the Rights Agent and cancellation of the Right Certificate if
mutilated, the Company shall prepare, execute and deliver a new Right
Certificate of like tenor to the Rights Agent and the Rights Agent shall
countersign and deliver such new Right Certificate to the registered holder in
lieu of the Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein) in whole or in
part at any time after the Distribution Date and prior to the Expiration Date,
upon surrender of the Right Certificate, with the form of election to purchase
on the reverse side thereof duly executed, to the Rights Agent at the office or
offices of the Rights Agent designated for such purpose, together with payment
in cash, in lawful money of the United States of America by certified check or
bank draft payable to the order of the Company, equal to the sum of (i) the
exercise price for the total number of securities as to which such surrendered
Rights are exercised and (ii) an amount equal to any applicable transfer tax or
charge required to be paid by the holder of such Right Certificate in accordance
with the provisions of Section 9 hereof. In lieu of the cash payment referred to
in the immediately preceding sentence, following the occurrence of a Triggering
Event the registered holder of a Right Certificate may exercise the Rights
evidenced thereby (except as otherwise provided herein) in whole or in part upon
surrender of the Right Certificate as described above together with an election
to exercise such Rights without payment of cash on the reverse side thereof duly
completed. With respect to any Rights as to which such an election is made, the
holder shall receive a number of Common Shares or other securities having a
value equal to the difference between (i) the value of the Common Shares or
other securities that would have been issuable upon payment of the cash amount
as described above, and (ii) the amount of such cash payment. For purposes of
this Section 7(a), the value of any security shall be the current per share
market price thereof (or of the security as to which such security is deemed for
purposes of this Agreement to be an equivalent), determined pursuant to the
applicable provisions of Section 11(d) hereof, on the Trading Day immediately
preceding the date of the first occurrence of a Triggering Event.
(b) Upon receipt of a Right Certificate representing exercisable
Rights with the form of election to purchase duly executed, accompanied by
either payment as described above or a duly completed election to exercise
without payment of cash, the Rights Agent
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shall promptly (i) requisition from any transfer agent of the Preferred Shares
(or make available, if the Rights Agent is the transfer agent) certificates
representing the number of one one-thousandths of a Preferred Share to be
purchased (and the Company hereby irrevocably authorizes and directs its
transfer agent to comply with all such requests), or, if the Company shall have
elected to deposit Preferred Shares issuable upon exercise of the Rights
hereunder with a depositary agent, requisition from the depositary agent
depositary receipts representing such number of one one-thousandths of a
Preferred Share as are to be purchased (and the Company hereby irrevocably
authorizes and directs such depositary agent to comply with all such requests),
(ii) after receipt of such certificates (or depositary receipts, as the case may
be), cause the same to be delivered to or upon the order of the registered
holder of such Right Certificate, registered in such name or names as may be
designated by such holder, (iii) when appropriate, requisition from the Company
or any transfer agent therefor (or make available, if the Rights Agent is the
transfer agent) certificates representing the number of equivalent common shares
to be issued in lieu of the issuance of Common Shares in accordance with the
provisions of Section 11(a)(iii) hereof, (iv) when appropriate, after receipt of
such certificates, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder, (v) when appropriate, requisition from the
Company the amount of cash to be paid in lieu of the issuance of fractional
shares in accordance with the provisions of Section 14 hereof or in lieu of the
issuance of Common Shares in accordance with the provisions of Section
11(a)(iii) hereof, (vi) when appropriate, after receipt, deliver such cash to or
upon the order of the registered holder of such Right Certificate, and (vii)
when appropriate, deliver any due xxxx or other instrument provided to the
Rights Agent by the Company for delivery to the registered holder of such Right
Certificate as provided by Section 11(l) hereof.
(c) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, the Company shall prepare,
execute and deliver a new Right Certificate evidencing Rights equivalent to the
Rights remaining unexercised and the Rights Agent shall countersign and deliver
such new Right Certificate to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of Section 14 hereof.
(d) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to any purported transfer, split up, combination or exchange
of any Right Certificate pursuant to Section 6 hereof or exercise of a Right
Certificate as set forth in this Section 7 unless the registered holder of such
Right Certificate shall have (i) properly completed and signed the certificate
following the form of assignment or the form of election to purchase, as
applicable, set forth on the reverse side of the Right Certificate surrendered
for such transfer, split up, combination, exchange or exercise and (ii) provided
such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company or the
Rights Agent shall have reasonably requested.
(e) Neither the Company nor the Rights Agent shall have any liability
to any holder of Rights or any other Person as a result of the Company's failure
to make any
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determination under this Section 7 or any other section with respect to an
Acquiring Person or an Affiliate or Associate of an Acquiring Person or
transferees hereunder.
Section 8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
stock transfer agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
Section 9. Company Covenants Concerning Securities and Rights. The
Company covenants and agrees that:
(a) So long as the Preferred Shares (and, following the occurrence
of a Triggering Event, Common Shares and/or other securities) issuable upon the
exercise of the Rights may be listed on the Nasdaq National Market or on a
national securities exchange, it shall endeavor to cause, from and after such
time as the Rights become exercisable, all securities reserved for issuance upon
the exercise of Rights to be listed on such exchange upon official notice of
issuance upon such exercise.
(b) It shall take all such action as may be necessary to ensure
that all Preferred Shares (and, following the occurrence of a Triggering Event,
Common Shares and/or other securities) delivered upon exercise of Rights, at the
time of delivery of the certificates for such securities, shall be (subject to
payment of the Purchase Price) duly and validly authorized and issued, fully
paid and nonassessable securities.
(c) It shall pay when due and payable any and all federal and
state transfer taxes and charges that may be payable in respect of the issuance
or delivery of the Right Certificates and of any certificates representing
securities issued upon the exercise of Rights; provided, however, that the
Company shall not be required to pay any transfer tax or charge which may be
payable in respect of any transfer or delivery of Right Certificates to a Person
other than, or the issuance or delivery of certificates or depositary receipts
representing securities issued upon the exercise of Rights in a name other than
that of, the registered holder of the Right Certificate evidencing Rights
surrendered for exercise, or to issue or deliver any certificates or depositary
receipts representing securities issued upon the exercise of any Rights until
any such tax or charge shall have been paid (any such tax or charge being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's reasonable satisfaction that no
such tax or charge is due.
-10-
(d) It shall use its best efforts (i) to file on an appropriate
form, as soon as practicable following the later of the first occurrence of a
Triggering Event or the Distribution Date, a registration statement under the
Securities Act with respect to the securities issuable upon exercise of the
Rights, (ii) to cause such registration statement to become effective as soon as
practicable after such filing, and (iii) to cause such registration statement to
remain effective (with a prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The Company shall
also take such action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
of time after the date set forth in clause (i) of the first sentence of this
Section 9(d), the exercisability of the Rights in order to prepare and file such
registration statement and to permit it to become effective. Upon any such
suspension, the Company shall promptly notify the Rights Agent in writing of
such suspension and shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect (with prompt
written notice to the Rights Agent that such suspension is no longer in effect).
In addition, if the Company shall determine that a registration statement should
be filed under the Securities Act or any state securities laws following the
Distribution Date, the Company may temporarily suspend the exercisability of the
Rights in each relevant jurisdiction until such time as a registration statement
has been declared effective and, upon any such suspension, the Company shall
promptly notify the Rights Agent in writing of such suspension and shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect (with prompt written notice to the Rights
Agent that such suspension is no longer in effect). Notwithstanding anything in
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction if the requisite registration or qualification in such jurisdiction
shall not have been effected or the exercise of the Rights shall not be
permitted under applicable law.
(e) Notwithstanding anything in this Agreement to contrary, after
the Distribution Date the Company shall not, except as permitted by Section 23
or Section 26 hereof, take (or permit any Subsidiary to take) any action if at
the time such action is taken it is reasonably foreseeable that such action will
eliminate or otherwise diminish the benefits intended to be afforded by the
Rights.
(f) In the event that the Company is obligated to issue other
securities of the Company and/or pay cash pursuant to Sections 11, 13 or 14
hereof, it shall make all arrangements necessary so that such other securities
and/or cash are available for distribution by the Rights Agent, if and when
appropriate.
Section 10. Record Date. Each Person in whose name any certificate
representing Preferred Shares (or Common Shares and/or other securities, as the
case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Shares (or Common
Shares and/or other securities, as the case may
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be) represented thereby on, and such certificate shall be dated, the date upon
which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and all applicable transfer taxes or charges) was
made; provided, however, that if the date of such surrender and payment is a
date upon which the Preferred Shares (or Common Shares and/or other securities,
as the case may be) transfer books of the Company are closed, such Person shall
be deemed to have become the record holder of such securities on, and such
certificate shall be dated, the next succeeding Business Day on which the
Preferred Shares (or Common Shares and/or other securities, as the case may be)
transfer books of the Company are open. Prior to the exercise of the Rights
evidenced thereby, the holder of a Right Certificate shall not be entitled to
any rights of a stockholder of the Company with respect to securities for which
the Rights shall be exercisable, including, without limitation, the right to
vote, to receive dividends or other distributions or to exercise any preemptive
rights, and shall not be entitled to receive any notice of any proceedings of
the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Securities
or Number of Rights. The Purchase Price, the number and kind of securities
issuable upon exercise of each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event that the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation), the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and/or
the number and/or kind of shares of capital stock issuable on such date upon
exercise of a Right, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive upon payment of the
Purchase Price then in effect the aggregate number and kind of shares of capital
stock which, if such Right had been exercised immediately prior to such date and
at a time when the Preferred Shares transfer books of the Company were open, the
holder of such Right would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii) hereof or Section 13 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) or Section 13 hereof.
(ii) Subject to the provisions of Section 27 hereof, in the event
that any Person, who or which, together with all Affiliates and Associates of
such Person, becomes an Acquiring Person (other than pursuant to any transaction
set forth in Section 13(a) hereof), then proper provision shall be made so that
each holder of a Right, except as provided below, shall thereafter have a right
to receive, upon exercise thereof in accordance with the terms of this Agreement
at an exercise price per Right equal to the
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product of the then-current Purchase Price multiplied by the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of a Triggering Event, in lieu of
Preferred Shares, such number of Common Shares as shall equal the result
obtained by (x) multiplying the then-current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of a Triggering Event, and dividing
that product by (y) 50% of the current per share market price of the Common
Shares (determined pursuant to Section 11(d) hereof) on the date of the first
occurrence of a Triggering Event. Notwithstanding anything in this Agreement to
the contrary, from and after the later of the Distribution Date and the first
occurrence of a Flip-in Event, (1) any Rights that are or were acquired or
beneficially owned by any Acquiring Person (or any Affiliate or Associate of
such Acquiring Person) shall be null and void and any holder of such Rights
shall thereafter have no right to exercise such Rights under any provision of
this Agreement, (2) no Right Certificate shall be issued pursuant to this
Agreement that represents Rights beneficially owned by an Acquiring Person or
any Affiliate or Associate thereof, (3) no Right Certificate shall be issued at
any time upon the transfer of any Rights to an Acquiring Person or any Affiliate
or Associate thereof or to any nominee of such Acquiring Person or Affiliate or
Associate thereof, and (4) any Right Certificate delivered to the Rights Agent
for transfer to an Acquiring Person or any Affiliate or Associate thereof shall
be cancelled.
(iii) Upon the occurrence of a Flip-in Event, if there shall not
be sufficient Common Shares authorized but unissued or issued but not
outstanding to permit the issuance of all the Common Shares issuable in
accordance with subsection (ii) hereof upon the exercise of a Right, the Board
of Directors of the Company shall use its best efforts promptly to authorize
and, subject to the provisions of Section 9(d) hereof, make available for
issuance additional Common Shares or other equity securities of the Company
having equivalent voting rights and an equivalent value (as determined in good
faith by the Board of Directors of the Company) to the Common Shares (for
purposes of this Section 11(a)(iii), "equivalent common shares"). In the event
that equivalent common shares are so authorized, upon the exercise of a Right in
accordance with the provisions of Section 7 hereof, the registered holder shall
be entitled to receive (A) Common Shares, to the extent any are available and
(B) a number of equivalent common shares, which the Board of Directors of the
Company shall have determined in good faith to have a value equivalent to the
excess of (x) the aggregate current per share market value of all the Common
Shares issuable in accordance with subsection (ii) hereof upon the exercise of a
Right (the "Exercise Value") over (y) the aggregate current per share market
value of any Common Shares available for issuance upon the exercise of such
Right; provided, however, that if at any time after 90 calendar days after the
first occurrence of a Flip-in Event, there shall not be sufficient Common Shares
and/or equivalent common shares available for issuance upon the exercise of a
Right, then the Company shall be obligated to deliver, upon the surrender of
such Right and without requiring payment of the Purchase Price, Common Shares
(to the extent available), equivalent common shares (to the extent available)
and then cash (to the extent permitted by applicable law and any agreements or
instruments to which the Company is a party in effect immediately prior to the
first occurrence of any Flip-in Event), which securities and cash shall have an
aggregate value
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equal to the excess of (1) the Exercise Value over (2) the product of the
then-current Purchase Price multiplied by the number of one one-thousandths of a
Preferred Share for which a Right was exercisable immediately prior to the first
occurrence of a Triggering Event. To the extent that any legal or contractual
restrictions prevent the Company from paying the full amount of cash payable in
accordance with the foregoing sentence, the Company shall pay to holders of the
Rights as to which such payments are being made all amounts which are not then
restricted on a pro rata basis and shall continue to make payments on a pro rata
basis as funds become available until the full amount due to each such Rights
holder has been paid.
(b) In the event that the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred Shares
entitling them (for a period expiring within 45 calendar days after such record
date) to subscribe for or purchase Preferred Shares (or securities having
equivalent rights, privileges and preferences as the Preferred Shares (for
purposes of this Section 11(b), "equivalent preferred shares")) or securities
convertible into Preferred Shares or equivalent preferred shares at a price per
Preferred Share or equivalent preferred share (or having a conversion price per
share, if a security convertible into Preferred Shares or equivalent preferred
shares) less than the current per share market price of the Preferred Shares
(determined pursuant to Section 11(d) hereof) on such record date, the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of Preferred Shares which the
aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the aggregate initial
conversion price of the convertible securities so to be offered) would purchase
at such current per share market price and the denominator of which shall be the
number of Preferred Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so to be
offered are initially convertible). In case such subscription price may be paid
in a consideration part or all of which shall be in a form other than cash, the
value of such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent. Preferred Shares owned by or held for the account
of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such rights, options or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price which
would then be in effect if such record date had not been fixed.
(c) In the event that the Company shall fix a record date for the
making of a distribution to all holders of Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular periodic cash dividend), assets, stock
(other than a dividend payable in Preferred Shares) or subscription rights,
options or warrants (excluding those referred to in Section 11(b)
-14-
hereof), the Purchase Price to be in effect after such record date shall be
determined by multiplying the Purchase Price in effect immediately prior to such
record date by a fraction, the numerator of which shall be the current per share
market price of the Preferred Shares (as determined pursuant to Section 11(d)
hereof) on such record date or, if earlier, the date on which Preferred Shares
begin to trade on an ex-dividend or when-issued basis for such distribution,
less the fair market value (as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a statement
filed with the Rights Agent) of the portion of the evidences of indebtedness,
cash, assets or stock so to be distributed or of such subscription rights,
options or warrants applicable to one Preferred Share, and the denominator of
which shall be such current per share market price of the Preferred Shares. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the "current
per share market price" of Common Shares on any date shall be deemed to be the
average of the daily closing prices per share of such Common Shares for the 30
consecutive Trading Days immediately prior to but not including such date;
provided, however, that in the event that the current per share market price of
the Common Shares is determined during a period following the announcement by
the issuer of such Common Shares of (A) a dividend or distribution on such
Common Shares payable in such Common Shares or securities convertible into such
Common Shares (other than the Rights) or (B) any subdivision, combination or
reclassification of such Common Shares, and prior to but not including the
expiration of 30 Trading Days after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the current per share market
price shall be appropriately adjusted to take into account ex-dividend trading
or to reflect the current per share market price per Common Share equivalent.
The closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the Nasdaq National Market System ("NASDAQ") or, if the
Common Shares are not listed or admitted to trading on the NASDAQ, as reported
in the principal consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange on which the
Common Shares are listed or admitted to trading or, if the Common 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 NASDAQ or such other
system then in use, or, if on any such date the Common 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 Common Shares
selected by the Board of Directors of the Company. If the Common Shares are not
publicly held or not so listed or traded, or not the subject of available bid
and asked quotes, "current per share market price" shall mean the fair value per
share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent.
-15-
(ii) For the purpose of any computation hereunder, the "current
per share market price" of the Preferred Shares shall be determined in the same
manner as set forth above for Common Shares in Section 11(d)(i) hereof, other
than the last sentence thereof. If the current per share market price of the
Preferred Shares cannot be determined in the manner provided above, the "current
per share market price" of the Preferred Shares shall be conclusively deemed to
be an amount equal to the current per share market price of the Common Shares
multiplied by 1,000 (as such number may be appropriately adjusted to reflect
events such as stock splits, stock dividends, recapitalizations or similar
transactions relating to the Common Shares occurring after the date of this
Agreement). If neither the Common Shares nor the Preferred Shares are publicly
held or so listed or traded, or the subject of available bid and asked quotes,
"current per share market price" of the Preferred Shares shall mean the fair
value per share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent. For all purposes of this Agreement, the current per share market
price of one one-thousandth of a Preferred Share shall be equal to the current
per share market price of one Preferred Share divided by 1,000.
(e) Except as set forth below, no adjustment in the Purchase Price
shall be required unless such adjustment would require an increase or decrease
of at least 1% in such price; provided, however, that any adjustments which by
reason of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All calculations
under this Section 11 shall be made to the nearest cent or to the nearest one
ten-millionth of a Preferred Share or one ten-thousandth of a Common Share or
other security, as the case may be. Notwithstanding the first sentence of this
Section 11(e), any adjustment required by this Section 11 shall be made no later
than the earlier of (i) three years from the date of the transaction which
requires such adjustment and (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any securities of the Company other than Preferred Shares, thereafter
the number of such other securities so receivable upon exercise of any Right
shall be subject to adjustment from time to time in a manner and on terms as
nearly equivalent as practicable to the provisions with respect to the Preferred
Shares contained in this Section 11, and the provisions of Sections 7, 9, 10 and
13 hereof with respect to the Preferred Shares shall apply on like terms to any
such other securities.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-thousandths of a
Preferred Share issuable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) hereof, upon each adjustment of the Purchase Price as
a result of the
-16-
calculations made in Section 11(b) and Section 11(c) hereof with respect to a
distribution of subscription rights, options or warrants applicable to Preferred
Shares, each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-thousandths of a Preferred Share
(calculated to the nearest one ten-millionth of a Preferred Share) obtained by
(i) multiplying (x) the number of one one-thousandths of a Preferred Share
issuable upon exercise of a Right immediately prior to this adjustment by (y)
the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect, on or after the date of any adjustment
of the Purchase Price, to adjust the number of Rights in substitution for any
adjustment in the number of one one-thousandths of a Preferred Share issuable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-thousandths of a Preferred Share for which a Right was exercisable
immediately prior to such adjustment. Each Right held of record prior to such
adjustment of the number of Rights shall become that number of Rights
(calculated to the nearest one ten-thousandth) obtained by dividing the Purchase
Price in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase Price. The
Company shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 calendar days later than the
date of the public announcement. If Right Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date Right Certificates evidencing,
subject to the provisions of Section 14 hereof, the additional Rights to which
such holders shall be entitled as a result of such adjustment, or, at the option
of the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number or kind of securities issuable upon the exercise of the Rights,
the Right Certificates theretofore and thereafter issued may continue to express
the Purchase Price and the number and kind of securities which were expressed in
the initial Right Certificate issued hereunder.
-17-
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-thousandth of the then par value, if
any, of the Preferred Shares or below the then par value, if any, of any other
securities of the Company issuable upon exercise of the Rights, the Company
shall take any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares or such other securities, as the case may be, at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuance to the holder of any Right exercised after such record date
the number of Preferred Shares or other securities of the Company, if any,
issuable upon such exercise over and above the number of Preferred Shares or
other securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
Preferred Shares or other securities upon the occurrence of the event requiring
such adjustment.
(m) Notwithstanding anything in this Agreement to the contrary,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in its good faith judgment the Board of Directors of the Company
shall determine to be advisable in order that any (i) consolidation or
subdivision of the Preferred Shares, (ii) issuance wholly for cash of Preferred
Shares at less than the current per share market price therefor, (iii) issuance
wholly for cash of Preferred Shares or securities which by their terms are
convertible into or exchangeable for Preferred Shares, (iv) stock dividends, or
(v) issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Shares shall not be
taxable to such stockholders.
(n) Notwithstanding anything in this Agreement to the contrary, in
the event that the Company shall at any time after the date of this Agreement
and prior to the Distribution Date (i) declare a dividend on the outstanding
Common Shares payable in Common Shares, (ii) subdivide the outstanding Common
Shares, (iii) combine the outstanding Common Shares into a smaller number of
shares, or (iv) issue any shares of its capital stock in a reclassification of
the outstanding Common Shares (including any such reclassification in connection
with a consolidation or merger in which the Company is the continuing or
surviving corporation), the number of Rights associated with each Common Share
then outstanding, or issued or delivered thereafter but prior to the
Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each Common Share following any such event
shall equal the result obtained by multiplying the number of Rights associated
with each Common Share immediately prior to such event by a fraction the
numerator of which shall be the total number of Common Shares outstanding
immediately prior to the occurrence of the event and the denominator of which
shall be the total number of Common Shares outstanding immediately following the
occurrence of such event. The adjustments provided for in this Section 11(n)
shall be
-18-
made successively whenever such a dividend is paid or such a subdivision,
combination or reclassification is effected.
Section 12. Certificate of Adjusted Purchase Price or Number of
Securities. Whenever an adjustment is made as provided in Section 11 or Section
13 hereof, the Company shall promptly (a) prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for the
Preferred Shares and the Common Shares, a copy of such certificate, and (c) if
such adjustment is made after the Distribution Date, mail a brief summary of
such adjustment to each holder of a Right Certificate in accordance with Section
25 hereof. The Rights Agent shall be fully authorized and protected in relying
on such certificates and any adjustments contained therein, and shall have no
duty with respect to, 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, following the Share Acquisition Date,
directly or indirectly:
(i) the Company shall consolidate with, or merge with or into,
any other Person and the Company shall not be the continuing or surviving
corporation of such consolidation or merger; or
(ii) any Person shall consolidate with the Company, or merge
with or into the Company and the Company shall be the continuing or surviving
corporation of such merger or consolidation and, in connection with such merger
or consolidation, all or part of the Common Shares shall be changed into or
exchanged for stock or other securities of any other Person or cash or any other
property; or
(iii) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power (including, without limitation, securities
creating any obligation on the part of the Company and/or any of its
Subsidiaries) representing in the aggregate more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to any
Person or Persons,
then, and in each such case, proper provision shall be made so that (A) each
holder of a Right (except as otherwise provided herein) shall thereafter have
the right to receive, upon the exercise thereof in accordance with the terms of
this Agreement at an exercise price per Right equal to the product of the
then-current Purchase Price multiplied by the number of one one-thousandths of a
Preferred Share for which a Right was exercisable immediately prior to the first
occurrence of a Triggering Event, such number of validly authorized and issued,
fully paid, nonassessable and freely tradable Common Shares of the Issuer, free
and clear of any liens, encumbrances and other adverse claims and not subject to
any rights of call or first refusal, as shall be equal to the result obtained by
(x) multiplying the then-current Purchase Price by the number of one
one-thousandths of a Preferred Share for which a Right is exercisable
immediately prior to the first occurrence
-19-
of a Triggering Event and dividing that product by (y) 50% of the current per
share market price of the Common Shares of the Issuer (determined pursuant to
Section 11(d) hereof), on the date of consummation of such Flip-over Event; (B)
the Issuer shall thereafter be liable for, and shall assume, by virtue of the
consummation of such Flip-over Event, all the obligations and duties of the
Company pursuant to this Agreement; (C) the term "Company" shall thereafter be
deemed to refer to the Issuer; and (D) the Issuer shall take such steps
(including, without limitation, the reservation of a sufficient number of its
Common Shares to permit the exercise of all outstanding Rights) in connection
with such consummation as may be necessary to assure that the provisions hereof
shall thereafter be applicable, as nearly as reasonably may be possible, in
relation to its Common Shares thereafter deliverable upon the exercise of the
Rights.
(b) For purposes of this Section 13, "Issuer" shall mean (i) in
the case of any Flip-over Event described in Sections 13(a)(i) or (ii) above,
the Person that is the continuing, surviving, resulting or acquiring Person
(including the Company as the continuing or surviving corporation of a
transaction described in Section 13(a)(ii) above), and (ii) in the case of any
Flip-over Event described in Section 13(a)(iii) above, the Person that is the
party receiving the greatest portion of the assets or earning power (including,
without limitation, securities creating any obligation on the part of the
Company and/or any of its Subsidiaries) transferred pursuant to such transaction
or transactions; provided, however, that, in any such case, (A) if (1) no class
of equity security of such Person is, at the time of such merger, consolidation
or transaction and has been continuously over the preceding 12-month period,
registered pursuant to Section 12 of the Exchange Act, and (2) such Person is a
Subsidiary, directly or indirectly, of another Person, a class of equity
security of which is and has been so registered, the term "Issuer" shall mean
such other Person; and (B) in case such Person is a Subsidiary, directly or
indirectly, of more than one Person, a class of equity security of two or more
of which are and have been so registered, the term "Issuer" shall mean whichever
of such Persons is the issuer of the equity security having the greatest
aggregate market value. Notwithstanding the foregoing, if the Issuer in any of
the Flip-over Events listed above is not a corporation or other legal entity
having outstanding equity securities, then, and in each such case, (x) if the
Issuer is directly or indirectly wholly owned by a corporation or other legal
entity having outstanding equity securities, then all references to Common
Shares of the Issuer shall be deemed to be references to the Common Shares of
the corporation or other legal entity having outstanding equity securities which
ultimately controls the Issuer, and (y) if there is no such corporation or other
legal entity having outstanding equity securities, (i) proper provision shall be
made so that the Issuer shall create or otherwise make available for purposes of
the exercise of the Rights in accordance with the terms of this Agreement, a
kind or kinds of security or securities having a fair market value at least
equal to the economic value of the Common Shares which each holder of a Right
would have been entitled to receive if the Issuer had been a corporation or
other legal entity having outstanding equity securities; and (ii) all other
provisions of this Agreement shall apply to the issuer of such securities as if
such securities were Common Shares.
(c) The Company shall not consummate any Flip-over Event, unless
the Issuer shall have a sufficient number of authorized Common Shares (or other
securities as
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contemplated in Section 13(b) above) which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior to such consummation the Company and the Issuer
shall have executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in subsections (a) and (b) of this Section 13
and further providing that as promptly as practicable after the consummation of
any Flip-over Event, the Issuer shall:
(i) prepare and file a registration statement under the Securities
Act, with respect to the Rights and the securities issuable upon exercise of the
Rights on an appropriate form, and shall use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after such
filing and (B) remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration Date;
(ii) take all 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; and
(iii) deliver to holders of the Rights historical financial
statements for the Issuer and each of its Affiliates which comply in all
respects with the requirements for registration on Form 10 under the Exchange
Act.
(d) The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Flip-over Event occurs at any time after the occurrence of a Flip-in
Event, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a) hereof.
Section 14. Fractional Rights and Fractional Securities. (a) The
Company shall not be required to issue fractions of Rights or to distribute
Right Certificates which evidence fractional Rights. In lieu of such fractional
Rights, the Company shall pay as promptly as practicable to the registered
holders of the Right Certificates with regard to which such fractional Rights
otherwise would be issuable, an amount in cash equal to the same fraction of the
current market value of a whole Right. For the purposes of this Section 14(a),
the current market value of a whole Right shall be the closing price of the
Rights for the Trading Day immediately prior to the date on which such
fractional Rights otherwise would have been issuable. 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 principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange or, if the Rights are not listed or admitted to trading on the
New York Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Rights are listed or admitted to trading or, if
the Rights 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
-21-
NASDAQ or such other system then in use or, if on any such date the Rights are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Rights
selected by the Board of Directors of the Company. If on any such date no such
market maker is making a market in the Rights the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the Company
shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other than
fractions which are integral multiples of one one-thousandth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of one
one-thousandth of a Preferred Share may, at the election of the Company, be
evidenced by depositary receipts pursuant to an appropriate agreement between
the Company and a depositary selected by it, provided that such agreement shall
provide that the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners of
the Preferred Shares represented by such depositary receipts. In lieu of
fractional Preferred Shares that are not integral multiples of one
one-thousandth of a Preferred Share, the Company may pay to any Person to whom
or which such fractional Preferred Shares would otherwise be issuable an amount
in cash equal to the same fraction of the current market value of one Preferred
Share. For purposes of this Section 14(b), the current market value of one
Preferred Share shall be the closing price of the Preferred Shares (as
determined in the same manner as set forth for Common Shares in the second
sentence of Section 11(d)(i) hereof) for the Trading Day immediately prior to
the date of such exercise; provided, however, that if the closing price of the
Preferred Shares cannot be so determined, the closing price of the Preferred
Shares for such Trading Day shall be conclusively deemed to be an amount equal
to the closing price of the Common Shares (determined pursuant to the second
sentence of Section 11(d)(i) hereof) for such Trading Day multiplied by 1,000
(as such number may be appropriately adjusted to reflect events such as stock
splits, stock dividends, recapitalizations or similar transactions relating to
the Common Shares occurring after the date of this Agreement); and provided
further, however, that if neither the Common Shares nor the Preferred Shares are
publicly held or listed or admitted to trading on any national securities
exchange, or the subject of available bid and asked quotes, the current market
value of one Preferred Share shall be determined in good faith by the Board of
Directors of the Company.
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of Common Shares or other securities
issuable upon exercise or exchange of the Rights or to distribute certificates
which evidence any such fractional securities. In lieu of issuing any such
fractional securities, the Company may pay to any Person to whom or which such
fractional securities would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of one such security. For purposes of
this Section 14(c), the current market value of one Common Share or other
security issuable upon the exercise or exchange of Rights shall be the closing
price thereof (as determined in the same manner as set forth for Common Shares
in the second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such
-22-
exercise or exchange; provided, however, that if neither the Common Shares nor
any such other securities are publicly held or listed or admitted to trading on
any national securities exchange, or the subject of available bid and asked
quotes, the current market value of one Common Share or such other security
shall be determined in good faith by the Board of Directors of the Company.
(d) The Rights Agent shall have no duty or obligation with respect to
the Section 14 or any other Section hereof concerning the fractional shares
unless and until it has received specific instructions (and sufficient cash, if
required) from the Company with respect to its duties and obligations under such
Section.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 and hereof, are vested in the respective registered holders of the
Right Certificates (and, prior to the Distribution Date, the registered holders
of the Common Shares); and any registered holder of any Right Certificate (or,
prior to the Distribution Date, of the Common Shares), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or, prior to
the Distribution Date, of the holder of any Common Shares), may in his or her
own behalf and for his or her own benefit enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his or her right to exercise the Rights evidenced
by such Right Certificate or Common Share certificate in the manner provided in
such Right Certificate and in this Agreement. Without limiting the foregoing or
any remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations under this Agreement, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to this
Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
(a) Prior to the Distribution Date, the Rights shall be
transferable only in connection with the transfer of the Common Shares;
(b) After the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer;
(c) The Company and the Rights Agent may deem and treat the person
in whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Share certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificate or the associated Common Share certificate
made by anyone other than the
-23-
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary;
(d) Such holder expressly waives any right to receive any
fractional Rights and any fractional securities upon exercise or exchange of a
Right, except as otherwise provided in Section 14 hereof; and
(e) Notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree, judgment or ruling (whether interlocutory or
final) issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided, however, that the Company shall use its best efforts to have any such
injunction, order, decree, judgment or ruling lifted or otherwise overturned as
soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable upon the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of Directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 24 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions of this Agreement or exchanged pursuant to the provisions of Section
27 hereof.
Section 18. Concerning the Rights Agent. (a) The Company agrees to pay
to the Rights Agent reasonable compensation for all services rendered by it
hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the
administration, preparation, delivery, amendment and execution of this Agreement
and the exercise and performance of its duties hereunder. The Company also
agrees to indemnify the Rights Agent for, and to hold it harmless against, any
loss, liability, suit, action, judgment, proceeding, damage, fine, penalty,
claim, demand, settlement, cost or expense, incurred without gross negligence,
bad faith or willful misconduct on the part of the Rights Agent, for any action
taken, suffered or omitted by the Rights Agent in connection with the acceptance
and administration of this Agreement or the exercise or performance of its
duties hereunder, including, without limitation, the costs and expenses of
defending against any claim of liability arising therefrom, directly or
indirectly. The indemnity provided herein shall survive the termination of this
Agreement
-24-
and the termination and expiration of the Rights. The reasonable costs and
expenses incurred in enforcing this right of indemnification shall be paid by
the Company.
(b) The Rights Agent shall be authorized, shall be protected and
shall incur no liability for or in respect of any action taken, suffered or
omitted by it in connection with the acceptance and administration of this
Agreement and the exercise and performance of its duties hereunder in reliance
upon any Right Certificate or certificate evidencing Preferred Shares or other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any Person into which the Rights Agent or any successor Rights Agent may be
merged or with which it may be consolidated, or any Person resulting from any
merger or consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any Person succeeding to the corporate trust business of
the Rights Agent or any successor Rights Agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21 hereof. In case at the time such successor Rights
Agent shall succeed to the agency created by this Agreement, any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver Right Certificates so countersigned; and in
case at that time any of the Right Certificates shall not have been
countersigned, the Rights Agent may countersign such Right Certificates either
in its prior name or in its changed name; and in all such cases such Right
Certificates shall have the full force provided in the Right Certificates and in
this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the advice or opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent and the
Rights Agent shall incur
-25-
no liability for or in respect of any action taken or omitted by it in good
faith and in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking, suffering or omitting 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 any one of the Chairman of the Board,
Chief Executive Officer, President or Chief Financial Officer of the Company and
delivered to the Rights Agent; and such certificate shall be full authorization
and protection to the Rights Agent and the Rights Agent shall incur no liability
for or in respect of any action taken, suffered or omitted in good faith by it
under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not have liability for, nor be under
any responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due execution and delivery hereof by the Rights
Agent) or in respect of the validity or execution of any Right Certificate
(except its countersignature thereof); nor shall it have liability for, nor be
responsible for any breach by the Company of any covenant or condition contained
in this Agreement or in any Right Certificate; nor shall it have liability for,
nor be responsible for any adjustment required under the provisions of Section
11 or Section 13 hereof (including any adjustment which results in Rights
becoming null and void) or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after actual notice of any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or warranty as to the
authorization or reservation of any shares of stock or other securities to be
issued pursuant to this Agreement or any Right Certificate or as to whether any
shares of stock or other securities will, when issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of
-26-
the Board, Chief Executive Officer, President or Chief Financial Officer of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered to
be taken by it in good faith in accordance with instructions of any such
officer.
(h) The Rights Agent and any stockholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided reasonable care was exercised in the selection
and continued employment thereof. The Rights Agent shall not be under any duty
or responsibility to insure compliance with any applicable federal or state
securities laws in connection with the issuance, transfer or exchange of Right
Certificates.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise, transfer, split up, combination or exchange, the
certificate attached to the form of assignment or form of election to purchase,
as the case may be, has either not been completed or indicates an affirmative
response to clause 1 or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise, transfer, split up, combination
or exchange without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 calendar days' notice in writing mailed to the Company and to each
transfer agent of the Preferred Shares and the Common Shares by registered or
certified mail, and to the holders of the Right Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
30 calendar 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 Preferred
Shares and the Common Shares by registered or certified mail, and to the holders
of the Right Certificates by first-class mail. If the Rights Agent shall resign
or be removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of 30 calendar days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a
-27-
new Rights Agent. Any successor Rights Agent, whether appointed by the Company
or by such a court, shall be a corporation organized and doing business under
the laws of the United States or of the States of Delaware or New York (or of
any other state of the United States so long as such corporation is authorized
to do business as a banking institution in the States of Delaware or New York),
in good standing, having a principal office in the States of Delaware or New
York, which is authorized under such laws to conduct or otherwise engage in the
shareholder services business or exercise corporate trust powers and is subject
to supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50 million. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Preferred Shares and the Common Shares, and mail a notice thereof in writing
to the registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price per share and the number or kind of securities issuable
upon exercise of the Rights made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale by the Company
of Common Shares following the Distribution Date and prior to the Expiration
Date, the Company (a) shall, with respect to Common Shares so issued or sold
pursuant to the exercise or conversion of securities issued prior to the
Distribution Date which are exercisable for, or convertible into Common Shares,
and (b) may, in any other case, if deemed necessary, appropriate or desirable by
the Board of Directors of the Company, issue Right Certificates representing an
equivalent number of Rights as would have been issued in respect of such Common
Shares if they had been issued or sold prior to the Distribution Date, as
appropriately adjusted as provided herein as if they had been so issued or sold;
provided, however, that (i) no such Right Certificate shall be issued if, and to
the extent that, in its good faith judgment the Board of Directors of the
Company shall have determined that the issuance of such Right Certificate could
have a material adverse tax consequence to the Company or to the Person to whom
or which such Right Certificate otherwise would be issued, and (ii) no such
Right Certificate shall be issued if, and to the extent that, appropriate
adjustment otherwise shall have been made in lieu of the issuance thereof.
Section 23. Redemption. (a) Prior to the Expiration Date, the Board of
Directors of the Company may, at its option, redeem all but not less than all of
the then-outstanding
-28-
Rights at the Redemption Price at any time prior to the Close of Business on the
later of (i) the Distribution Date and (ii) the Share Acquisition Date.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, and without any further action
and without any notice, the right to exercise the Rights shall terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. Promptly after the action of its Board of Directors ordering
the redemption of the Rights, the Company shall promptly notify the Rights Agent
of such redemption and shall publicly announce such action, and within 10
calendar days thereafter, the Company 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
Company; provided, however, that the failure to give, or any defect in, any such
notice shall not affect the validity of the redemption of the Rights. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. The notice of redemption mailed to the
holders of Rights shall state the method by which the payment of the Redemption
Price will be made. The Company may, at its option, pay the Redemption Price in
cash, Common Shares (based upon the current per share market price of the Common
Shares (determined pursuant to Section 11(d) hereof) at the time of redemption)
or any other form of consideration deemed appropriate by the Board of Directors
of the Company (based upon the fair market value of such other consideration,
determined by the Board of Directors of the Company in good faith) or any
combination thereof.
(c) At any time following the Share Acquisition Date, the Board of
Directors of the Company may relinquish the right to redeem the Rights under
this Section 23 by duly adopting a resolution to that effect. Immediately upon
adoption of such resolution, the rights of the Board of Directors of the Company
to redeem the Rights shall terminate without further action and without any
notice. Promptly after adoption of such a resolution, the Company shall publicly
announce such action (with prompt written notice to the Rights Agent of such
action); provided, however, that the failure to give, or any defect in, any such
notice shall not affect the validity of the action of the Board of Directors of
the Company.
Section 24. Notice of Certain Events. (a) In case, after the
Distribution Date, the Company shall propose (i) to pay any dividend payable in
stock of any class to the holders of Preferred Shares or to make any other
distribution to the holders of Preferred Shares (other than a regular periodic
cash dividend), (ii) to offer to the holders of Preferred Shares rights, options
or warrants to subscribe for or to purchase any additional Preferred Shares or
shares of stock of any class or any other securities, rights or options, (iii)
to effect any reclassification of its Preferred Shares (other than a
reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, 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 assets or
earning power (including, without limitation, securities creating any obligation
on the part of the Company and/or any of its Subsidiaries) representing more
than 50% of the assets
-29-
and earning power of the Company and its Subsidiaries, taken as a whole, to any
other Person or Persons, (v) to effect the liquidation, dissolution or winding
up of the Company, or (vi) to declare or pay any dividend on the Common Shares
payable in Common Shares or to effect a subdivision, combination or
reclassification of the Common Shares then, in each such case, the Company shall
give to the Rights Agent and to each holder of a Right Certificate, in
accordance with Section 25 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, distribution or
offering of rights, options or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer, liquidation,
dissolution, or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred Shares, 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 calendar days prior to
the record date for determining holders of the Preferred Shares for purposes of
such action, and, in the case of any such other action, at least 10 calendar
days prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the Common Shares and/or Preferred
Shares whichever shall be the earlier.
(b) In case any Triggering Event shall occur, then, in any such
case, the Company shall as soon as practicable thereafter give to the Rights
Agent and each holder of a Right Certificate, in accordance with Section 25
hereof, a notice of the occurrence of such event, which shall specify the event
and the consequences of the event to holders of Rights.
Section 25. Notices. (a) Notices or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the Company shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Verilink Corporation
000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Attention: Chief Executive Officer
(b) Subject to the provisions of Section 21 hereof, any notice or
demand authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be sufficiently
given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:
EquiServe Trust Company, N.A.
c/o EquiServe Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
-30-
(c) Notices or demands authorized by this Agreement to be given or
made by the Company or the Rights Agent to the holder of any Right Certificate
(or, if prior the Distribution Date, to the holder of any certificate evidencing
Common Shares) shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the Distribution Date
and subject to the last sentence of this Section 26, if the Company so directs,
the Company and the Rights Agent shall supplement or amend any provision of this
Agreement without the approval of any holders of certificates representing
Common Shares. From and after the Distribution Date and subject to the last
sentence of this Section 26, if the Company so directs, the Company and the
Rights Agent shall supplement or amend this Agreement without the approval of
any holders of Right Certificates, so long as the duties, liabilities and
indemnification of the Rights Agent are not affected, in order (i) to cure any
ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to
shorten or lengthen any time period hereunder, or (iv) to supplement or amend
the provisions hereunder in any manner which the Company may deem desirable,
including, without limitation, the addition of other events requiring adjustment
to the Rights under Sections 11 or 13 hereof or procedures relating to the
redemption of the Rights, which supplement or amendment shall not, in the good
faith determination of the Board of Directors of the Company, adversely affect
the interests of the holders of Rights (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person). Prior to the Distribution Date,
the interests of the holders of Rights shall be deemed concurrent with the
interests of the holders of Common Shares. Upon the delivery of a certificate
from an officer of the Company 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; provided, however, that the failure
or refusal of the Rights Agent to execute such supplement or amendment shall not
affect the validity of any supplement or amendment adopted by the Company, any
of which shall be effective in accordance with the terms thereof.
Notwithstanding anything in this Agreement to the contrary, no supplement or
amendment shall be made at any time that the Rights are not then redeemable
which decreases the stated Redemption Price or the period of time remaining
until the Final Expiration Date or which modifies a time period relating to when
the Rights may be redeemed.
Section 27. Exchange. (a) The Board of Directors of the Company may, at
its option, at any time after the later of the Distribution Date and the first
occurrence of a Triggering Event, 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 11(a)(ii) hereof) for Common Shares at an
exchange ratio of one Common 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 the
Company, any Subsidiary of the Company, any employee benefit plan of the Company
or any such Subsidiary, or any entity holding Common Shares for or pursuant to
the terms of
-31-
any such plan), who or which, together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the Common Shares
then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 27(a) hereof,
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right with respect to such Rights
thereafter of the holder of such Rights shall be to receive that number of
Common Shares equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio. Promptly after the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to Section 27(a)
hereof, the Company shall promptly notify the Rights Agent in writing of such
action and shall publicly announce such action, and within 10 calendar days
thereafter shall give 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; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange shall state the method
by which the exchange of the Common Shares 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
11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 27, the Company, at
its option, may substitute for any Common Share exchangeable for a Right, (i)
equivalent common shares (as such term is used in Section 11(a)(iii) hereof),
(ii) cash, (iii) debt securities of the Company, (iv) other assets, or (v) any
combination of the foregoing, in any event having an aggregate value which the
Board of Directors of the Company shall have determined in good faith to be
equal to the current market value of one Common Share (determined pursuant to
Section 11(d) hereof) on the Trading Day immediately preceding the date of
exchange pursuant to this Section 27.
Section 28. Successors; Certain Covenants. All the covenants and
provisions of this Agreement by or for the benefit of the Company or the Rights
Agent shall bind and inure to the benefit of their respective successors and
assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Shares) any legal or equitable right, remedy or claim under
this Agreement; but this Agreement shall be for the sole and exclusive benefit
of the Company, the Rights Agent and the registered holders of the Right
Certificates (or prior to the Distribution Date, the Common Shares).
Section 30. 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
-32-
this Agreement and to exercise all rights and powers specifically granted to the
Board or 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, without limitation, a determination to redeem or not redeem the
Rights or to amend this Agreement, whether a Person is an Acquiring Person and
whether any proposed amendment adversely affects the interests of the holders of
Right Certificates). For all purposes of this Agreement, any calculation of the
number of Common Shares or other securities outstanding at any particular time,
including for purposes of determining the particular percentage of such
outstanding Common Shares or any other securities of which any Person is the
Beneficial Owner, shall be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) under the Exchange Act as in effect on the date of this
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 in good faith, shall (x) be
final, conclusive and binding on the Company, the Rights Agent, the holders of
the Right Certificates and all other parties, and (y) not subject the Board to
any liability to the holders of the Right Certificates. The Rights Agent shall
always be entitled to assume that the Company's Board of Directors acted in good
faith and shall be fully protected and incur no liability in reliance thereon.
Section 31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 32. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the internal
substantive laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the internal substantive laws of such State
applicable to contracts to be made and to be performed entirely within such
State.
Section 33. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
[Remainder of Page Intentionally Left Blank]
-33-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
[SEAL]
ATTEST: VERILINK CORPORATION
By: /s/ X.X. Xxxxx By: /s/ Xxxxxx X. Xxxxxxxx
------------------------------- --------------------------------
X.X. Xxxxx Xxxxxx X. Xxxxxxxx
Secretary President and
Chief Executive Officer
[SEAL]
Attest: EQUISERVE TRUST COMPANY, N.A.
By: /s/ Xxxxx Xxxxxxx By: /s/ Xxxxx Xxxxxx-Xxxx
------------------------------- --------------------------------
Name: Xxxxx Xxxxxxx Name: Xxxxx Xxxxxx-Xxxx
----------------------------- ------------------------------
Title: Account Manager Title: Managing Director
---------------------------- -----------------------------
-34-
Exhibit A
CERTIFICATE OF DESIGNATIONS
of
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
VERILINK CORPORATION,
A DELAWARE CORPORATION
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
Verilink Corporation, a corporation organized and existing under the
General Corporation Law of the State of Delaware (the "Company"), DOES HEREBY
CERTIFY:
That, pursuant to authority vested in the Board of Directors of the
Company by its Certificate of Incorporation, and pursuant to the provisions of
Section 151 of the General Corporation Law, the Board of Directors of the
Company on November 29, 2001 adopted the following resolution providing for the
issuance of a series of Preferred Stock:
RESOLVED, that pursuant to the authority expressly vested in the Board
of Directors of the Company (the "Board of Directors" or the "Board") by the
Certificate of Incorporation of the Company, a series of Preferred Stock, no par
value per share (the "Preferred Stock"), of the Company be, and it hereby is,
created, and that the designation and amount thereof and the powers,
designations, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof are as follows:
I. Designation and Amount
The shares of such series shall be designated as "Series A Junior
Participating Preferred Stock" (the "Series A Preferred Stock") and the number
of shares constituting the Series A Preferred Stock shall be 40,000. Such number
of shares may be increased or decreased by resolution of the Board of Directors;
provided, that no decrease shall reduce the number of shares of Series A
Preferred Stock to a number less than the number of shares then outstanding plus
the number of shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any outstanding securities
issued by the Company convertible into Series A Preferred Stock.
II. Dividends and Distributions
(A) Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the Series
A Preferred Stock with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Common Stock, par value $0.01
per share (the "Common Stock"), of the Company, and of any other junior stock,
shall be entitled to receive, when, as and if declared by the Board of Directors
out of funds legally available for the purpose, quarterly dividends payable in
cash on the first day of March, June, September and December in each year (each
such date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series A Preferred Stock (the "First
Quarterly Dividend Payment Date"), in an amount per share (rounded to the
nearest cent) equal to the greater of (i) $1.00 or (ii) subject to the provision
for adjustment hereinafter set forth, 1,000 times the aggregate per share amount
of all cash dividends, and 1,000 times the aggregate per share amount (payable
in kind) of all non-cash dividends or other distributions, other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the Common Stock
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 A Preferred Stock. In the event the
Company shall at any time (a) declare a dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, (b) subdivide the outstanding
shares of Common Stock, (c) combine the outstanding shares of Common Stock in a
smaller number of shares, or (d) issue any shares of its capital stock in a
reclassification of the outstanding shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), then, in each such case and
regardless of whether any shares of Series A Preferred Stock are then issued or
outstanding, the amount to which holders of shares of Series A Preferred Stock
would otherwise be entitled immediately prior to such event under clause (ii) of
the preceding sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(B) The Company shall declare a dividend or distribution on the Series
A Preferred Stock as provided in paragraph (A) of this Section II immediately
after it declares a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided, however, that, in the
event no dividend or distribution shall have been declared on the Common Stock
during the period between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the
Series A Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless (i) the date of issue of such
shares is prior to the record date for the
First Quarterly Dividend Payment Date, in which case dividends on such shares
shall begin to accrue from the date of the first issuance of a share of Series A
Preferred Stock, or (ii) the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive a quarterly dividend and before
such Quarterly Dividend Payment Date, in either of which events such dividends
shall begin to accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on
the shares of Series A Preferred Stock in an amount less than the total amount
of such dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such shares at the time
outstanding. The Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to receive payment of
a dividend or distribution declared thereon, which record date shall be not more
than 60 calendar days prior to the date fixed for the payment thereof.
III. Voting Rights
The holders of shares of Series A Preferred Stock shall have the
following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each
share of Series A Preferred Stock shall entitle the holder thereof to 1,000
votes on all matters submitted to a vote of the stockholders of the Company. In
the event the Company shall at any time (i) declare a dividend on the
outstanding shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, (iii) combine the outstanding
shares of Common Stock in a smaller number of shares, or (iv) issue any shares
of its capital stock in a reclassification of the outstanding shares of Common
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), then,
in each such case and regardless of whether any shares of Series A Preferred
Stock are then issued or outstanding, the number of votes per share to which
holders of shares of Series A Preferred Stock would otherwise be entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(B) Except as otherwise provided herein, in any other Certificate of
Designations creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Company having general voting
rights shall vote together as one class on all matters submitted to a vote of
stockholders of the Company.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no voting rights.
IV. Certain Restrictions
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series A Preferred Stock as provided in Section II are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Company shall not:
(i) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends, or make any other distributions, on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Preferred
Stock, except dividends paid ratably on the Series A Preferred Stock
and all such parity stock on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all such
shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock, provided that the Company may at any time redeem, purchase or
otherwise acquire shares of any such junior stock in exchange for
shares of any stock of the Company ranking junior (either as to
dividends or upon dissolution, liquidation or winding up) to the Series
A Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock, except in accordance with a
purchase offer made in writing or by publication (as determined by the
Board of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the
respective series and classes, shall determine in good faith will
result in fair and equitable treatment among the respective series or
classes.
(B) The Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of the
Company unless the Company could, under paragraph (A) of this Section IV,
purchase or otherwise acquire such shares at such time and in such manner.
V. Reacquired Shares
Any shares of Series A Preferred Stock purchased or otherwise acquired
by the Company in any manner whatsoever shall be retired and cancelled promptly
after the acquisition thereof. All such shares shall upon their cancellation
become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred Stock subject to
the conditions and restrictions on issuance set forth herein, in the Certificate
of Incorporation, or in any other Certificate of Designations creating a series
of Preferred Stock or any similar stock or as otherwise required by law.
VI. Liquidation, Dissolution or Winding Up
Upon any liquidation, dissolution or winding up of the Company, no
distribution shall be made (A) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares of Series
A Preferred Stock shall have received $1,000 per share, plus an amount equal to
accrued and unpaid dividends and distributions thereon, whether or not declared,
to the date of such payment; provided, however, that the holders of shares of
Series A Preferred Stock shall be entitled to receive an aggregate amount per
share, subject to the provision for adjustment hereinafter set forth, equal to
1,000 times the aggregate amount to be distributed per share to holders of
shares of Common Stock, or (B) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event the Company shall at any
time (i) declare a dividend on the outstanding shares of Common Stock payable in
shares of Common Stock, (ii) subdivide the outstanding shares of Common Stock,
(iii) combine the outstanding shares of Common Stock in a smaller number of
shares, or (iv) issue any shares of its capital stock in a reclassification of
the outstanding shares of Common Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation), then, in each such case and regardless of whether any
shares of Series A Preferred Stock are then issued or outstanding, the aggregate
amount to which each holder of shares of Series A Preferred Stock would
otherwise be entitled immediately prior to such event under the proviso in
clause (A) of the preceding sentence shall be adjusted by multiplying such
amount by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding immediately prior to
such event.
VII. Consolidation, Merger, etc.
In case the Company shall enter into any consolidation, merger,
combination or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash and/or any other
property, then, in each such case, each share of Series A Preferred Stock shall
at the same time be similarly exchanged or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth, equal to 1,000
times the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged. In the event the Company shall at any time
(A) declare a dividend on the outstanding shares of Common Stock payable in
shares of Common Stock, (B) subdivide the outstanding shares of Common Stock,
(C) combine the outstanding shares of Common Stock in a smaller number of
shares, or (D) issue any shares of its capital stock in a reclassification of
the outstanding shares
of Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), then, in each such case and regardless of whether any shares of
Series A Preferred Stock are then issued or outstanding, the amount set forth in
the preceding sentence with respect to the exchange or change of shares of
Series A Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
VIII. Redemption
The shares of Series A Preferred Stock shall not be redeemable.
IX. Rank
The Series A Preferred Stock shall rank, with respect to the payment of
dividends and the distribution of assets, junior to all series of any other
class of the Company's Preferred stock.
X. Amendment
The Certificate of Incorporation of the Company shall not be amended in
any manner which would materially alter or change the powers, preferences or
special rights of the Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-thirds of the
outstanding shares of Series A Preferred Stock, voting together as a single
series.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Company by ___________________, its ___________________________
and attested by ____________________, its Secretary this day of __________,
2001.
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Attest:
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Exhibit B
FORM OF RIGHT CERTIFICATE
Certificate No. R- ___Rights
NOT EXERCISABLE AFTER DECEMBER 12, 2011 OR EARLIER IF REDEEMED. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SPECIFIED
IN THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN
AFFILIATE OR AN ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) MAY BECOME NULL AND VOID.
RIGHT CERTIFICATE
VERILINK CORPORATION
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 November 29, 2001 (the "Rights Agreement"),
between Verilink Corporation, a Delaware corporation (the "Company"), and
EquiServe Trust Company, N.A. (the "Rights Agent"), to purchase from the Company
at any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M. (Eastern time) on December 12, 2011 at the
principal office or offices of the Rights Agent designated for such purpose, one
one-thousandth of a fully paid nonassessable share of Series A Junior
Participating Preferred Stock, without par value (the "Preferred Shares"), of
the Company, at a purchase price of $22.00 per one one-thousandth of a Preferred
Share (the "Purchase Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and related Certificate duly
executed. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised. The number of Rights
evidenced by this Right Certificate (and the number of one one-thousandths of a
Preferred Share which may be purchased upon exercise thereof) set forth above,
and the Purchase Price set forth above, are the number and Purchase Price as of
December 12, 2001, based on the Preferred Shares as constituted at such date.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of securities issuable upon the exercise of the Rights evidenced by
this Right Certificate are subject to adjustment upon the happening of certain
events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of the Right Certificates, which limitations of
rights include the temporary suspension of the exercisability of the Rights
under the circumstances specified in the Rights Agreement. Copies of the Rights
Agreement are on file at the above-mentioned office of the Rights Agent.
Pursuant to the Rights Agreement, from and after the later of the
Distribution Date and the first occurrence of a Flip-in Event (as such term is
defined in the Rights Agreement), (i) any Rights that are or were acquired or
beneficially owned by any Acquiring Person (or any Affiliate or Associate of
such Acquiring Person) shall be null and void and any holder of such Rights
shall thereafter have no right to exercise such Rights under any provision of
the Rights Agreement, (ii) no Right Certificate shall be issued pursuant to the
Rights Agreement that represents Rights beneficially owned by an Acquiring
Person or any Affiliate or Associate thereof, (iii) no Right Certificate shall
be issued at any time upon the transfer of any Rights to an Acquiring Person or
any Affiliate or Associate thereof or to any nominee of such Acquiring Person or
Affiliate or Associate thereof, and (iv) any Right Certificate delivered to the
Rights Agent for transfer to an Acquiring Person or any Affiliate or Associate
thereof shall be cancelled.
This Right Certificate, with or without other Right Certificates, may
be transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the holder to purchase a like number of one
one-thousandths of a Preferred Share (or other securities, as the case may be)
as the Right Certificate or Right Certificates surrendered shall have entitled
such holder (or former holder in the case of a transfer) to purchase, upon
presentation and surrender hereof at the principal office of the Rights Agent
designated for such purpose, with the Form of Assignment (if appropriate) and
the related Certificate duly executed.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $0.001 per Right. The Rights Agreement may be supplemented and amended
by the Company, as provided therein.
The Company is not required to issue fractions of Preferred Shares
(other than fractions which are integral multiples of one one-thousandth of a
Preferred Share, which may, at the option of the Company, be evidenced by
depositary receipts) or other securities issuable upon the exercise of any Right
or Rights evidenced hereby. In lieu of issuing such fractional Preferred Shares
or other securities, the Company may make a cash payment, as provided in the
Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or of any other securities of the Company which may at any time be
issuable upon the exercise of the Right or Rights represented hereby, nor shall
anything contained herein or in the Rights Agreement be construed to confer upon
the holder hereof, as such, any of the rights of a shareholder of the Company or
any right to
vote for the election of directors or upon any matter submitted to shareholders
at any meeting thereof, or to give or withhold consent to any corporate action,
or to receive notice of meetings or other actions affecting shareholders (except
as provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised in accordance with the provisions of the
Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of ___________________, 2001.
ATTEST: VERILINK CORPORATION
By:
------------------------------------ -------------------------------
[Name] [Name]
Secretary [Title]
[SEAL]
Countersigned:
EQUISERVE TRUST COMPANY, N.A.
By:
--------------------------------
[Name]
[Title]
FORM OF REVERSE SIDE OF RIGHT CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED, _________________________________________ hereby
sells, assigns and transfers unto ______________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint ____________________ Attorney, to
transfer the within Right Certificate on the books of the within-named Company,
with full power of substitution.
Dated: ,
------------------- ----
-----------------------------------
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being sold, assigned, transferred, split up, combined or exchanged by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ,
------------------- ----
-----------------------------------
Signature
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To ______________ Corporation:
The undersigned hereby irrevocably elects to exercise ________________
Rights represented by this Right Certificate to purchase the one one-thousandths
of a Preferred Share or other securities issuable upon the exercise of such
Rights and requests that certificates for such securities be issued in the name
of:
Please insert social security or other identifying number: _____________________
________________________________________________________________________________
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security or other identifying number: _____________________
________________________________________________________________________________
(Please print name and address)
Optional Election to Exercise without Payment of Cash:
With respect to the exercise of _______ of the Rights specified above,
the undersigned hereby elects to exercise such Rights without payment of cash
and to receive a number of Common Shares or other securities having a value (as
determined pursuant to the Rights Agreement) equal to the difference between (i)
the value of the Common Shares or other securities that would have been issuable
upon the exercise thereof upon payment of the cash amount as provided in the
Rights Agreement, and (ii) the amount of such cash payment.
Dated: ,
------------------- ----
-----------------------------------
Signature
Signature Guaranteed:
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of any such Person (as such terms are defined pursuant
to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Right Certificate from
any Person who is, was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated: ,
------------------- ----
-----------------------------------
Signature
NOTICE
Signatures on the foregoing Form of Assignment and Form of Election to
Purchase and in the related Certificates must correspond to the name as written
upon the face of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
Exhibit C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On November 29, 2001, the Board of Directors of Verilink Corporation
(the "Company") declared a dividend distribution of one right (a "Right") for
each outstanding share of Common Stock, par value $0.01 per share (the "Common
Shares"), of the Company. The distribution is payable on December 12, 2001 (the
"Record Date") to the shareholders of record as of the close of business on the
Record Date. Each Right entitles the registered holder to purchase from the
Company one one-thousandth of a share of Series A Junior Participating Preferred
Stock, without par value (the "Preferred Shares"), of the Company at a price of
$22.00 per one one-thousandth of a Preferred Share (the "Purchase Price"),
subject to adjustment. The description and terms of the Rights are set forth in
a Rights Agreement, dated as of November 29, 2001 (the "Rights Agreement"),
between the Company and EquiServe Trust Company, N.A., as Rights Agent (the
"Rights Agent").
Until the earliest to occur of (i) the close of business on the tenth
business day (or such later date as may be specified by the Board of Directors)
following a public announcement that a person or group of affiliated or
associated persons has acquired, or obtained the right to acquire, beneficial
ownership of 20% or more of the outstanding Common Shares, subject to certain
exceptions (an "Acquiring Person"), (ii) the close of business on the tenth
business day (or such later date as may be specified by the Board of Directors)
following the commencement of a tender offer or exchange offer by a person or
group of affiliated or associated persons, the consummation of which would
result in beneficial ownership by such person or group of 20% or more of the
outstanding Common Shares, or (iii) the close of business on the tenth business
day following the first date of public announcement of the first occurrence of a
Flip-in Event or a Flip-over Event (as such terms are hereinafter defined) (the
earliest of such dates being hereinafter called the "Distribution Date"), the
Rights will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificates.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred with and only with the Common Shares. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
Common Share certificates issued after the Record Date upon transfer or new
issuance of Common Shares will contain a notation incorporating the Rights
Agreement by reference. Until the Distribution Date (or earlier redemption or
expiration of the Rights), the surrender for transfer of any certificates for
Common Shares in respect of which Rights have been issued will also constitute
the transfer of the Rights associated with the Common Shares represented by such
certificates. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (the "Right Certificates") will be mailed to
holders of record of the Common Shares as of the close of business on the
Distribution Date and such separate Right Certificates alone will evidence the
Rights.
No Right is exercisable at any time prior to the Distribution Date. The
Rights will expire on December 12, 2011 (the "Final Expiration Date") unless
earlier redeemed or exchanged by the Company as described below. Until a Right
is exercised, the holder thereof, as such, will have no rights as a shareholder
of the Company, including without limitation the right to vote or to receive
dividends.
The Purchase Price payable, and the number of Preferred Shares or other
securities issuable, upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution (i) in the event of a stock dividend on, or a
subdivision, combination or reclassification of, the Preferred Shares, (ii) upon
the grant to holders of the Preferred Shares of certain rights or warrants to
subscribe for or purchase Preferred Shares at a price, or securities convertible
into Preferred Shares with a conversion price, less than the then current market
price of the Preferred Shares, or (iii) upon the distribution to holders of the
Preferred Shares of evidences of indebtedness or cash (excluding regular
periodic cash dividends), assets, stock (excluding dividends payable in
Preferred Shares) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights and the number of one one-thousandths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock dividend on the Common Shares payable in
Common Shares or subdivision, combination or reclassification of the Common
Shares occurring, in any such case, prior to the Distribution Date.
Preferred Shares issuable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to a minimum preferential
quarterly dividend payment equal to the greater of (i) $1.00 per share or (ii)
an amount equal to 1,000 times the aggregate dividends declared per Common Share
during the related quarter. In the event of liquidation, the holders of the
Preferred Shares will be entitled to a preferential liquidation payment equal to
the greater of (a) $1,000 per share or (b) an amount equal to 1,000 times the
liquidation payment made per Common Share. Each Preferred Share will have 1,000
votes, voting together with the Common Shares. Finally, in the event of any
merger, consolidation or other transaction in which Common Shares are exchanged,
each Preferred Share will be entitled to receive 1,000 times the amount received
per Common Share. These rights are protected by customary antidilution
provisions.
Because of the nature of the Preferred Shares' dividend, voting and
liquidation rights, the value of the one one-thousandth interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
In the event (a "Flip-in Event") that any person or group of affiliated
or associated persons becomes an Acquiring Person, proper provision shall be
made so that each holder of a Right, other than Rights that are or were owned
beneficially by the Acquiring Person (which, from and after the later of the
Distribution Date and the date of the earliest of any such events, will be null
and void), will thereafter have the right to receive, upon exercise thereof at
the then current exercise price of the Right, that number of Common Shares (or,
under certain circumstances, an economically equivalent security or securities
of the Company) having a market value of two times the exercise price of the
Right.
2
To illustrate the operation of such an adjustment, at a Purchase Price
of $22, assuming the current market price (as determined pursuant to the
provisions of the Rights Agreement) per Common Share were $2, each Right not
owned beneficially by an Acquiring Person at or after the time of such an
occurrence would entitle its holder to purchase (after the Distribution Date)
from the Company 22 Common Shares (having a market value of $44) for $22.
In the event (a "Flip-over Event") that, following the first date of
public announcement that a person has become an Acquiring Person, (i) the
Company merges with or into any person and the Company is not the surviving
corporation, (ii) any person merges with or into the Company and the Company is
the surviving corporation, but its Common Shares are changed or exchanged, or
(iii) 50% or more of the Company's assets or earning power, including without
limitation securities creating obligations of the Company, are sold, proper
provision shall be made so that each holder of a Right will thereafter have the
right to receive, upon the exercise thereof at the then current exercise price
of the Right, that number of shares of common stock (or, under certain
circumstances, an economically equivalent security or securities) of such other
person which at the time of such transaction would have a market value of two
times the exercise price of the Right.
At any time after the later of the Distribution Date and the first
occurrence of a Flip-in Event or a Flip-over Event and prior to the acquisition
by any person or group of affiliated or associated persons of 50% or more of the
outstanding Common Shares, the Board of Directors of the Company may exchange
the Rights (other than any Rights which have become void), in whole or in part,
at an exchange ratio of one Common Share per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment in the Purchase
Price of at least 1%. The Company is not required to issue fractional Preferred
Shares (other than fractions which are integral multiples of one one-thousandth
of a Preferred Share, which may, at the option of the Company, be evidenced by
depositary receipts) or fractional Common Shares or other securities issuable
upon the exercise of Rights. In lieu of issuing such securities, the Company may
make a cash payment, as provided in the Rights Agreement.
The Company may redeem the Rights in whole, but not in part, at a price
of $0.001 per Right (the "Redemption Price"), at any time prior to the close of
business on the later of (i) the Distribution Date and (ii) the first date of
public announcement that a person has become an Acquiring Person. Immediately
upon any 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.
The Rights Agreement may be amended by the Company without the approval
of any holders of Right Certificates, including amendments which add other
events requiring adjustment to the purchase price payable and the number of
Preferred Shares or other securities issuable upon the exercise of the Rights or
which modify procedures relating to the redemption of the Rights, provided that
no amendment may be made which decreases the stated Redemption Price
3
or the period of time remaining until the Final Expiration Date or which
modifies a time period relating to when the Rights may be redeemed at such time
as the Rights are not then redeemable.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A. A
copy of the Rights Agreement is available free of charge from the Company. 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 herein by this reference.
4
