EXHIBIT 4.4
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RIGHTS AGREEMENT
dated as of [ ], 2001
between
XXXXXX HOLDINGS, INC.
and
MELLON INVESTOR SERVICES LLC
as Rights Agent
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TABLE OF CONTENTS
SECTION PAGE
1. Certain Definitions ................................................ 1
2. Appointment of Rights Agent ........................................ 9
3. Issue of Rights and Right Certificates .............................10
4. Form of Right Certificates .........................................12
5. Execution, Countersignature and
Registration .......................................................12
6. Transfer, Split-Up, Combination and
Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen
Right Certificates; Uncertificated
Rights .............................................................13
7. Exercise of Rights; Expiration Date
of Rights ..........................................................14
8. Cancelation and Destruction of Right
Certificates .......................................................17
9. Reservation and Availability of
Preferred Shares ...................................................17
10. Preferred Shares Record Date .......................................19
11. Adjustments in Rights After There Is an
Acquiring Person; Exchange of Rights for
Shares; Business Combinations.......................................19
12. Certain Adjustments ................................................25
13. Certificate of Adjustment ..........................................26
14. Additional Covenants ...............................................26
15. Fractional Rights and Fractional Shares ............................27
16. Rights of Action ...................................................28
17. Transfer and Ownership of Rights and
Right Certificates .................................................29
18. Right Certificate Holder Not Deemed
a Stockholder ......................................................29
19. Concerning the Rights Agent ........................................30
20. Merger or Consolidation or Change
of Rights Agent ....................................................30
21. Duties of Rights Agent .............................................31
22. Change of Rights Agent .............................................34
23. Issuance of Additional Rights and
Right Certificates .................................................35
24. Redemption and Termination .........................................36
25. Notices ............................................................36
26. Supplements and Amendments .........................................37
27. Successors .........................................................38
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28. Benefits of Rights Agreement;
Determinations and Actions by the
Board of Directors, etc. ...........................................38
29. Severability .......................................................39
30. Governing Law ......................................................39
31. Counterparts; Effectiveness ........................................39
32. Descriptive Headings ...............................................40
EXHIBITS
A Certificate of Designation
B Form of Right Certificate
C Summary of Rights
RIGHTS AGREEMENT dated as of [ ],
2001, between XXXXXX HOLDINGS, INC., a Delaware
corporation (the "Company"), and MELLON INVESTOR
SERVICES LLC, a New Jersey limited liability company,
as Rights Agent (the "Rights Agent").
The Board of Directors of the Company has authorized and
declared a dividend of one Right (as hereinafter defined) for each share of
Common Stock, par value $0.01 per share, of the Company (the "Common Stock")
outstanding at the Close of Business (as hereinafter defined) on the date
hereof (the "Record Date"), and has authorized the issuance of one Right (as
such number may hereafter be adjusted pursuant to the provisions of this
Rights Agreement) with respect to each share of Common Stock that shall
become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date, the Exchange Date, to the extent
applicable, or the Expiration Date (as such terms are hereinafter defined);
PROVIDED, HOWEVER, that Rights may be issued with respect to shares of Common
Stock that shall become outstanding after the Distribution Date and prior to
the earliest of the Redemption Date, the Exchange Date, to the extent
applicable, or the Expiration Date in accordance with the provisions of
Section 23. Each Right shall initially represent the right to purchase one
one- thousandth (1/1,000th) of a share of Series A Participating Cumulative
Preferred Stock, par value $0.01 per share, of the Company (the "Preferred
Shares"), having the powers, rights and preferences set forth in the
Certificate of Designation attached as Exhibit A.
Accordingly, 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 Rights
Agreement, the following terms have the meanings indicated:
"ACQUIRING PERSON" shall mean any Person who or which,
alone or together with all Affiliates and Associates of such Person, shall be
the Beneficial Owner of more than 15% of the Common Shares then outstanding,
but shall not include (a)(i) the Company, any Subsidiary of the Company, any
employee benefit or compensation plan of the Company or of any of its
Subsidiaries or any Person holding Common Shares for or pursuant to the terms
of any such employee benefit or compensation plan or for the purpose of
funding other employee benefits for employees of the Company or of any
Subsidiary of the Company and (ii) until immediately after the distribution
of the Common Shares of the Company by the sole stockholder of the Company,
Xxxxxxx-Xxxxx Squibb Company ("Xxxxxxx-Xxxxx Squibb"), to the stockholders of
Xxxxxxx-Xxxxx Squibb, Xxxxxxx-Xxxxx Squibb or any Affiliate or Associate
thereof, (each Person covered by clauses (a)(i) and (a)(ii), an "Exempt
Person") or (b) any such Person that the Board of Directors of the Company
determines has become the Beneficial Owner of more than 15% of the Common
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Shares at the time outstanding solely as the result of (i) a change in the
aggregate number of Common Shares outstanding since the last date on which
such Person acquired Beneficial Ownership of any Common Shares (provided,
however, that if a Person becomes the Beneficial Owner of more than 15% of
the Common Shares then outstanding by reason of such change in the aggregate
number of Common Shares outstanding and thereafter becomes the Beneficial
Owner of any additional Common Shares (other than pursuant to a dividend or
distribution paid or made by the Company on the outstanding Common Shares or
pursuant to a split or subdivision of the outstanding Common Shares), then
such Person shall be deemed to be an "Acquiring Person" unless upon becoming
the Beneficial Owner of such additional Common Shares such Person does not
beneficially own more than 15% of the shares of Common Shares then
outstanding), (ii) the acquisition by such Person or one or more of its
Affiliates or Associates of Beneficial Ownership of additional Common Shares
if such acquisition was made in the good faith belief that such acquisition
would not (A) cause the Beneficial Ownership by such Person, together with
its Affiliates and Associates, to exceed 15% of the Common Shares outstanding
at the time of such acquisition and such good faith belief was based on the
good faith reliance on information contained in publicly filed reports or
documents of the Company that are inaccurate or out-of-date or (B) otherwise
cause a Distribution Date or the adjustment provided for in Section 11(a) to
occur, or (iii) the acquisition by such Person or one or more of its
Affiliates or Associates of Beneficial Ownership of additional Common Shares
if the Board of Directors of the Company determines that such acquisition was
made in good faith without the knowledge by such Person or one or more of its
Affiliates or Associates that such Person would thereby become an Acquiring
Person and without the intention of changing or influencing control of the
Company (including, without limitation, because (A) such Person was unaware
that it beneficially owned a percentage of Common Shares that would otherwise
cause such Person to be an Acquiring Person or (B) such Person was aware of
the extent of its Beneficial Ownership of Common Shares but had no actual
knowledge of the consequences of such Beneficial Ownership under this
Agreement), which determination of the Board of Directors of the Company
shall be conclusive and binding on such Person, the Rights Agent, the holders
of the Rights and all other Persons. Notwithstanding clause (b)(ii) or
(b)(iii) of the prior sentence, if any Person that is not an Acquiring Person
due to such clause (b)(ii) or (b)(iii) does not reduce its percentage of
Beneficial Ownership of Common Shares to 15% or less by the Close of Business
on the tenth calendar day, or such other calendar day as determined, in good
faith, by the Board of Directors of the Company, after notice from the
Company (the date of notice being the first day) that such Person's
Beneficial Ownership of Common Shares would make it an Acquiring Person, such
Person shall, at the end of such ten calendar day period, become an Acquiring
Person (and such clause (b)(ii) or (b)(iii) shall no longer apply to such
Person). For purposes of this definition, the determination whether any
Person acted in "good faith" shall be conclusively determined by the Board of
Directors of the Company.
"AFFILIATE" and "ASSOCIATE", when used with reference to any
Person, 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 Rights Agreement.
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A Person shall be deemed the "BENEFICIAL OWNER" of, and shall
be deemed to "BENEFICIALLY OWN", and shall be deemed to have "BENEFICIAL
OWNERSHIP" of, any securities:
(a) which such Person or any of such Person's Affiliates or
Associates is deemed to "beneficially own" within the meaning of Rule
13d-3 of the General Rules and Regulations under the Exchange Act, as
in effect on the date of this Rights Agreement;
(b) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly: (i) the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (written or oral), or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or
options, or otherwise; PROVIDED, HOWEVER, that a Person shall not be
deemed under this clause (i) to be the Beneficial Owner of, or to
beneficially own, or to have Beneficial Ownership of, any securities
tendered pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange thereunder or
cease to be subject to withdrawal by the tendering security holder; or
(ii) the right to vote pursuant to any agreement, arrangement or
understanding (written or oral); PROVIDED, HOWEVER, that a Person shall
not be deemed under this clause (ii) to be the Beneficial Owner of, or
to beneficially own, any security if (A) the agreement, arrangement or
understanding (written or oral) to vote such security arises solely
from a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made generally to all holders of
Common Shares pursuant to, and in accordance with, the applicable rules
and regulations under the Exchange Act and (B) the beneficial ownership
of such security is not also then reportable on Schedule 13D or 13G
under the Exchange Act (or any comparable or successor report); or
(c) which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (written or oral) for the purpose of acquiring, holding,
voting (except pursuant to a revocable proxy as described in the
proviso to clause (b)(ii) of this definition) or disposing of any
securities of the Company; provided, however, that no Person who is
an officer, director or employee of an Exempt Person shall be
deemed, solely by reason of such Person's status or authority as
such, to be the "Beneficial Owner" of, to have "Beneficial
Ownership" of or to "beneficially own" any securities that are
"beneficially owned" (as defined herein), including, without
limitation, in a fiduciary capacity, by an Exempt Person or by any
other such officer, director or employee of an Exempt Person.
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Notwithstanding the foregoing, nothing contained in this definition shall cause
a Person ordinarily engaged in business as an underwriter of securities to be
deemed the "Beneficial Owner" of, or to "beneficially own", or to have
"Beneficial Ownership" of, any securities acquired in a bona fide firm
commitment underwriting pursuant to an underwriting agreement with the Company.
"BOOK VALUE", when used with reference to Common Shares
issued by any Person, shall mean the amount of equity of such Person
applicable to each Common Share, determined (a) in accordance with United
States generally accepted accounting principles in effect on the date as of
which such Book Value is to be determined, (b) using all the consolidated
assets and all the consolidated liabilities of such Person on the date as of
which such Book Value is to be determined, except that no value shall be
included in such assets for goodwill arising from consummation of a Business
Combination, and (c) after giving effect to (i) the exercise of all rights,
options and warrants to purchase such Common Shares (other than the Rights),
and the conversion of all securities convertible into such Common Shares, at
an exercise or conversion price, per Common Share, which is less than such
Book Value before giving effect to such exercise or conversion (whether or
not exercisability or convertibility is conditioned upon occurrence of a
future event), (ii) all dividends and other distributions on the capital
stock of such Person declared prior to the date as of which such Book Value
is to be determined and to be paid or made after such date, and (iii) any
other agreement, arrangement or understanding (written or oral), or
transaction or other action contemplated prior to the date as of which such
Book Value is to be determined that would have the effect of thereafter
reducing such Book Value.
"BUSINESS COMBINATION" shall have the meaning set forth in
Section 11(c)(i).
"BUSINESS DAY" shall mean each Monday, Tuesday, Wednesday,
Thursday and Friday that is not a day on which banking institutions in the
Borough of Manhattan, the City of New York, are authorized or obligated by law
or executive order to close.
"CERTIFICATE OF DESIGNATION" shall mean the Certificate of
Designation of Series A Participating Cumulative Preferred Stock setting forth
the powers, preferences, rights, qualifications, limitations and restrictions of
such series of Preferred Stock of the Company, a copy of which is attached as
Exhibit A.
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"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, "Close of Business" shall mean 5:00 p.m., Eastern time, on the
next succeeding Business Day.
"COMMON SHARES", when used with reference to the Company prior
to a Business Combination, shall mean the shares of Common Stock of the Company
or any other shares of capital stock of the Company into which the Common Stock
shall be reclassified or changed. "Common Shares", when used with reference to
any Person (other than the Company prior to a Business Combination), shall mean
shares of capital stock of such Person (if such Person is a corporation) of any
class or series, or units of equity interests in such Person (if such Person is
not a corporation) of any class or series, the terms of which do not limit (as a
maximum amount and not merely in proportional terms) the amount of dividends or
income payable or distributable on such class or series or the amount of assets
distributable on such class or series upon any voluntary or involuntary
liquidation, dissolution or winding up of such Person and do not provide that
such class or series is subject to redemption at the option of such Person, or
any shares of capital stock or units of equity interests into which the
foregoing shall be reclassified or changed.
"COMMON STOCK" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement.
"COMPANY" shall have the meaning set forth in the heading of
this Rights Agreement; PROVIDED, HOWEVER, that if there is a Business
Combination, "Company" shall have the meaning set forth in Section 11(c)(iii).
The term "CONTROL" with respect to any Person shall mean the
power to direct the management and policies of such Person, directly or
indirectly, by or through stock ownership, agency or otherwise, or pursuant to
or in connection with an agreement, arrangement or understanding (written or
oral) with one or more other Persons by or through stock ownership, agency or
otherwise; and the terms "controlling" and "controlled" shall have meanings
correlative to the foregoing.
"DISTRIBUTION DATE" shall have the meaning set forth in
Section 3(b).
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"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as in effect on the date in question, unless otherwise specifically provided.
"EXCHANGE CONSIDERATION" shall have the meaning set forth in
Section 11(b)(i).
"EXPIRATION DATE" shall have the meaning set forth in Section
7(a).
"MAJOR PART", when used with reference to the assets of the
Company and its Subsidiaries as of any date, shall mean assets (a) having a
fair market value aggregating 50% or more of the total fair market value of
all the assets of the Company and its Subsidiaries (taken as a whole) as of
the date in question, (b) accounting for 50% or more of the total value (net
of depreciation and amortization) of all the assets of the Company and its
Subsidiaries (taken as a whole) as would be shown on a consolidated or
combined balance sheet of the Company and its Subsidiaries as of the date in
question, prepared in accordance with United States generally accepted
accounting principles then in effect, or (c) accounting for 50% or more of
the total amount of earnings before interest, taxes, depreciation and
amortization or of the revenues of the Company and its Subsidiaries (taken as
a whole) as would be shown on, or derived from, a consolidated or combined
statement of income or net earnings of the Company and its Subsidiaries for
the period of 12 months ending on the last day of the Company's monthly
accounting period next preceding the date in question, prepared in accordance
with United States generally accepted accounting principles then in effect.
"MARKET VALUE", when used with reference to Common Shares or
Preferred Shares on any date, shall mean the average of the daily closing
prices, per share, of such Common Shares or Preferred Shares, as applicable, for
the period which is the shorter of (a) 30 consecutive Trading Days ending on the
Trading Day immediately prior to the date in question or (b) the number of
consecutive Trading Days beginning on the Trading Day immediately after the date
of the first public announcement of the event requiring a determination of the
Market Value of Common Shares or Preferred Shares, as applicable, and ending on
the Trading Day immediately prior to the record date of such event; PROVIDED,
HOWEVER, that, in the event that the Market Value of such Common Shares or
Preferred Shares, as applicable, is to be determined in whole or in part during
a period following the announcement by the issuer of such Common Shares or
Preferred Shares, as applicable, of any action of the type described in Section
12(a) that would require an
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adjustment thereunder, then, and in each such case, the Market Value of such
Common Shares or Preferred Shares, as applicable, shall be appropriately
adjusted to reflect the effect of such action on the market price of such Common
Shares or Preferred Shares, as applicable. The closing price for each Trading
Day shall be the closing price quoted on the composite tape for securities
listed on the New York Stock Exchange, or, if such securities are not quoted on
such composite tape or if such securities are not listed on such exchange, on
the principal United States securities exchange registered under the Exchange
Act (or any recognized foreign stock exchange) on which such securities are
listed, or, if such securities are not listed on any such exchange, the closing
price quoted on The Nasdaq Stock Market or, if such securities are not so
quoted, the average of the closing bid and asked quotations with respect to a
share of such securities on any National Association of Securities Dealers, Inc.
quotations system or such other system then in use, or if no such quotations are
available, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in such securities selected by the
Board of Directors of the Company, or if on any such Trading Day no market maker
is making a market in such securities, the closing price of such securities on
such Trading Day shall be deemed to be the fair value of such securities as
determined in good faith by the Board of Directors of the Company (whose
determination shall be described in a statement filed with the Rights Agent and
shall be binding on the Rights Agent, the holders of Rights and all other
Persons); PROVIDED, HOWEVER, that for the purpose of determining the closing
price of the Preferred Shares for any Trading Day on which there is no such
market maker for the Preferred Shares the closing price on such Trading Day
shall be deemed to be the Formula Number (as defined in the Certificate of
Designation) multiplied by the closing price of the Common Shares of the Company
on such Trading Day.
"PERSON" shall mean an individual, corporation, partnership,
limited liability company, joint venture, association, trust, unincorporated
organization or other entity.
"PREFERRED SHARES" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement. Any reference in this Rights
Agreement to Preferred Shares shall be deemed to include any authorized fraction
of a Preferred Share, unless the context otherwise requires.
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"PRINCIPAL PARTY" shall mean the Surviving Person in a
Business Combination; PROVIDED, HOWEVER, that, (i) if such Surviving Person is a
direct or indirect Subsidiary of any other Person, "Principal Party" shall mean
the Person which is the ultimate parent of such Surviving Person and which is
not itself a Subsidiary of another Person, and (ii) in the event ultimate
control of such Surviving Person is shared by two or more Persons, "Principal
Party" shall mean that Person that is immediately controlled by such two or more
Persons.
"PURCHASE PRICE" with respect to each Right shall mean $[ ],
as such amount may from time to time be adjusted as provided herein, and shall
be payable in lawful money of the United States of America. All references
herein to the Purchase Price shall mean the Purchase Price as in effect at the
time in question.
"RECORD DATE" shall have the meaning set forth in the
introductory paragraph of this Rights Agreement.
"REDEMPTION DATE" shall have the meaning set forth in Section
24(a).
"REDEMPTION PRICE" with respect to each Right shall mean
$0.01, as such amount may from time to time be adjusted in accordance with
Section 12. All references herein to the Redemption Price shall mean the
Redemption Price as in effect at the time in question.
"REGISTERED COMMON SHARES" shall mean Common Shares that are,
as of the date of consummation of a Business Combination, and have continuously
been for the 12 months immediately preceding such date, registered under Section
12 of the Exchange Act.
"RIGHT CERTIFICATE" shall mean a certificate evidencing a
Right in substantially the form attached as Exhibit B.
"RIGHTS" shall mean the rights to purchase Preferred Shares
(or other securities) as provided in this Rights Agreement.
"SECURITIES ACT" shall mean the Securities Act of 1933, as in
effect on the date in question, unless otherwise specifically provided.
"SUBSIDIARY" shall mean a Person, at least a majority of the
total outstanding voting power (being the power under ordinary circumstances
(and not merely upon the
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happening of a contingency) to vote in the election of directors of such Person
(if such Person is a corporation) or to participate in the management and
control of such Person (if such Person is not a corporation)) of which is owned,
directly or indirectly, by another Person or by one or more other Subsidiaries
of such other Person or by such other Person and one or more other Subsidiaries
of such other Person.
"SURVIVING PERSON" shall mean (a) the Person which is the
continuing or surviving Person in a consolidation or merger specified in Section
11(c)(i)(A) or 11(c)(i)(B) or (b) the Person to which the Major Part of the
assets of the Company and its Subsidiaries is sold, leased, exchanged or
otherwise transferred or disposed of in a transaction specified in Section
11(c)(i)(C); PROVIDED, HOWEVER, that, if the Major Part of the assets of the
Company and its Subsidiaries is sold, leased, exchanged or otherwise transferred
or disposed of in one or more related transactions specified in Section
11(c)(i)(C) to more than one Person, the "Surviving Person" in such case shall
mean the Person that acquired assets of the Company and/or its Subsidiaries with
the greatest fair market value in such transaction or transactions.
"TRADING DAY" shall mean a day on which the principal national
securities exchange (or principal recognized foreign stock exchange, as the case
may be) on which any securities or Rights, as the case may be, are listed or
admitted to trading is open for the transaction of business or, if the
securities or Rights in question are not listed or admitted to trading on any
national securities exchange (or recognized foreign stock exchange, as the case
may be), a Business Day.
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, shall prior to the Distribution Date
also be the holders of the Common Shares) in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint one or more co-Rights Agents as it may
deem necessary or desirable (the term "Rights Agent" being used herein to refer,
collectively, to the Rights Agent together with any such co-Rights Agents). In
the event the Company appoints one or more co-Rights Agents, the respective
duties of the Rights Agent and any co-Rights Agents shall be as the Company
shall determine.
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SECTION 3. ISSUE OF RIGHTS AND RIGHT CERTIFICATES. (a) One
Right shall be associated with each Common Share outstanding on the Record
Date, each additional Common Share that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the Redemption Date,
the Exchange Date, to the extent applicable, or the Expiration Date and each
additional Common Share with which Rights are issued after the Distribution
Date but prior to the earliest of the Redemption Date, the Exchange Date, to
the extent applicable, or the Expiration Date as provided in Section 23;
PROVIDED, HOWEVER, that, if the number of outstanding Rights are combined
into a smaller or larger number of outstanding Rights pursuant to the terms
hereof, the appropriate number of Rights (or fraction thereof) determined
pursuant to such Section shall thereafter be associated with each such Common
Share.
(b) Until the earlier of (i) such time as the Company
learns that a Person has become an Acquiring Person and (ii) the Close of
Business on such date, if any, as may be designated by the Board of Directors
of the Company following the commencement of, or first public disclosure of
an intent to commence, a tender or exchange offer by any Person (other than
an Exempt Person) for outstanding Common Shares, if upon consummation of such
tender or exchange offer such Person could be the Beneficial Owner of more
than 15% of the outstanding Common Shares (the Close of Business on the
earlier of such dates being the "Distribution Date"), (x) the Rights shall,
except as otherwise provided in Section 3(c), be evidenced by the
certificates for Common Shares registered in the names of the holders thereof
and not by separate Right Certificates, and (y) the Rights, including the
right to receive Right Certificates, will be transferable only in connection
with the transfer of Common Shares. The Company shall notify the Rights Agent
as promptly as practicable that the Distribution Date has occurred. As soon
as practicable after the Distribution Date, the Rights Agent shall send, by
first-class, postage-prepaid mail, to each record holder of Common Shares as
of the Distribution Date, at the address of such holder shown on the records
of the Company, a Right Certificate evidencing one whole Right for each
Common Share (or for the number of Common Shares with which one whole Right
is then associated if the number of Rights per Common Share held by such
record holder has been adjusted in accordance with the proviso in Section
3(a)). If the number of Rights associated with each Common Share has been
adjusted in accordance with the proviso in Section 3(a), at the time of
distribution of the Right Certificates the
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Company may make any necessary and appropriate rounding adjustments so that
Right Certificates representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Right in accordance with Section 15(a).
The Company shall notify the Rights Agent as promptly as practicable of any such
adjustments. As of and after the Distribution Date, the Rights shall be
evidenced solely by such Right Certificates.
(c) As soon as practicable, and in any event no later than
30 days, after the Record Date, the Company will send a copy of a Summary of
Rights to Purchase Preferred Shares, in substantially the form attached
hereto as Exhibit C (the "Summary of Rights"), 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. With respect to any certificate for Common Shares
outstanding as of the Record Date, until the earliest of the Distribution
Date, the Redemption Date, the Exchange Date, to the extent applicable, or
the Expiration Date, (i) the Rights associated with the Common Shares
represented by any such certificate shall be evidenced by such certificates
for the Common Shares with a copy of the Summary of Rights attached thereto
and the registered holders of the Common Shares shall also be the registered
holders of the associated Rights and (ii) the surrender for transfer of any
such certificate, even without a copy of the Summary of Rights attached
thereto, shall also constitute the transfer of the Rights associated with the
Common Shares represented thereby.
(d) Certificates issued for Common Shares after the Record
Date (including upon transfer or exchange of outstanding Common Shares), but
prior to the earliest of the Distribution Date, the Redemption Date, the
Exchange Date, to the extent applicable, or the Expiration Date, shall have
printed on, written on or otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement dated as of [ ],
2001 (as it may be amended from time to time (the "Rights Agreement")),
between Xxxxxx Holdings, Inc. (the "Corporation") and Mellon Investor
Services LLC, as Rights Agent (the "Rights Agent"), the terms of which
(including restrictions on the transfer of such Rights) are hereby
incorporated herein by reference and a copy of which is on file at
the principal executive offices of the Corporation. Under certain
circumstances, as set forth in the Rights Agreement, such Rights
shall be evidenced by separate certificates and shall no longer be
evidenced
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by this certificate. The Corporation shall mail to the holder of
this certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. RIGHTS BENEFICIALLY OWNED BY
ACQUIRING PERSONS (AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT)
AND CERTAIN TRANSFEREES THEREOF ARE NULL AND VOID AND ARE NO LONGER
TRANSFERABLE.
Notwithstanding this Section 3(d), neither the omission of a legend nor the
inclusion of a legend that makes reference to a rights agreement other than
the Rights Agreement shall affect the enforceability of any part of this
Rights Agreement or the rights of any holder of Rights. In the event that the
Company purchases or otherwise acquires any Common Shares after the Record
Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed canceled and retired so that the Company shall
not be entitled to exercise any Rights associated with the Common Shares
which are no longer outstanding.
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 side thereof) shall be in substantially the form set forth as
Exhibit B and may have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of this Rights
Agreement, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the provisions of Sections 7, 11 and 23, the Right
Certificates, whenever issued, shall be dated as of the Distribution Date, and
on their face shall entitle the holders thereof to purchase such number of
Preferred Shares as shall be set forth therein for the Purchase Price set forth
therein, subject to adjustment from time to time as herein provided.
SECTION 5. EXECUTION, COUNTERSIGNATURE AND REGISTRATION. (a)
The Right Certificates shall be executed on behalf of the Company by the
Chairman of the Board, any Vice Chairman of the Board, the Chief Executive
Officer, the President, the Chief Operating Officer, the Treasurer or any Vice
President (whether preceded by any additional title) of the Company, either
manually or by facsimile signature, and have affixed thereto the Company's seal
or a facsimile thereof, which shall be attested by the Secretary, an Assistant
Secretary or a Vice President (whether preceded by any additional title,
provided that such Vice President shall not have also executed the Right
Certificates) 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 or obligatory for any purpose unless so countersigned. In case any
officer of the
13
Company who shall have signed any of the Right Certificates shall cease to be
such an officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates may nevertheless
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 an 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 execution of such Right Certificate, shall be a proper officer of
the Company to sign such Right Certificate, although at the date of execution of
this Rights Agreement any such person was not such an officer of the Company.
(b) Following the Distribution Date, the Rights Agent shall
keep or cause to be kept, at its principal office in New York, New York, 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 by each of the Right Certificates,
the certificate number of 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;
UNCERTIFICATED RIGHTS. (a) Subject to Sections 7(e) and 15, at any time after
the Distribution Date, and at or prior to the Close of Business on the
earliest of the Redemption Date, the Exchange Date, to the extent applicable,
or the Expiration Date, any Right Certificate or Right Certificates (other
than those that have become void) may be transferred, split-up, combined or
exchanged for another Right Certificate or Right Certificates representing,
in the aggregate, the same number of Rights as the Right Certificate or Right
Certificates surrendered then represented. Any registered holder desiring to
transfer, split-up, combine or exchange any 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; PROVIDED, HOWEVER,
that neither the Rights Agent nor the Company shall be obligated to take any
action whatsoever with respect to the transfer of any Right Certificate
surrendered for transfer until the registered holder shall have completed and
signed the certification contained in the form of assignment on the reverse
side of such Right Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates
14
thereof as the Company or the Rights Agent shall reasonably request. Thereupon
the Rights Agent shall, subject to Sections 7(e) and 15, countersign and deliver
to the Person entitled thereto 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) Subject to Sections 7(e) and 15, at any time after the
Distribution Date, and at or prior to the Close of Business on the earliest
of the Redemption Date, the Exchange Date, to the extent applicable, or the
Expiration Date, upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation
of a valid Right Certificate, and, in case of loss, theft or destruction, of
indemnity or security reasonably satisfactory to them, and, at the Company's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancelation of the Right Certificate if mutilated, the Company shall make a
new Right Certificate of like tenor and deliver such new Right Certificate to
the Rights Agent for delivery to the registered owner in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
(c) Notwithstanding any other provision hereof, the Company
and the Rights Agent may amend this Rights Agreement to provide for
uncertificated Rights in addition to or in place of Rights evidenced by Right
Certificates.
SECTION 7. EXERCISE OF RIGHTS; EXPIRATION DATE OF RIGHTS.
(a) Subject to Section 7(e) and except as otherwise provided herein
(including Section 11), each Right shall entitle the registered holder
thereof, upon exercise thereof as provided herein, to purchase for the
Purchase Price, at any time after the Distribution Date and at or prior to
the earliest of (i) the Close of Business on the 10th anniversary of the date
of this Rights Agreement (the Close of Business on such date being the
"Expiration Date"), (ii) the Redemption Date or (iii) the time at which such
Right is exchanged as provided in Section 11(b) hereof (the Close of Business
on such date as to such Right being the "Exchange Date"), one one-thousandth
(1/1,000th) of a Preferred Share, subject to adjustment from time to time as
provided in Sections 11 and 12.
(b) 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, 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 principal office of the Rights
Agent in New York, New York, together with payment of the Purchase Price for
each one one-thousandth (1/1,000th) of a Preferred Share as to
15
which the Rights are exercised, at or prior to the earliest of (i) the
Expiration Date, (ii) the Exchange Date, to the extent applicable, and (iii) the
Redemption Date.
(c) Except as otherwise provided herein, upon receipt of a
Right Certificate representing exercisable Rights, with the form of election
to purchase duly executed, accompanied by payment of the Purchase Price for
the Preferred Shares to be purchased together with an amount equal to any
applicable transfer tax, in lawful money of the United States of America, in
cash or by certified check or money order payable to the order of the
Company, the Rights Agent shall thereupon (i) either (A) promptly requisition
from any transfer agent of the Preferred Shares (or make available, if the
Rights Agent is the transfer agent) certificates for the number of Preferred
Shares to be purchased and the Company hereby irrevocably authorizes its
transfer agent to comply with all such requests or (B) if the Company shall
have elected to deposit the Preferred Shares with a depositary agent under a
depositary arrangement, promptly requisition from the depositary agent
depositary receipts representing the number of one one-thousandths
(1/1,000ths) of a Preferred Share to be purchased (in which case certificates
for the Preferred Shares to be represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
shall direct the depositary agent to comply with all such requests, (ii) when
appropriate, promptly requisition from the Company the amount of cash to be
paid in lieu of issuance of fractional shares in accordance with Section 15,
(iii) promptly after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the registered holder
of such Right Certificate, registered in such name or names as may be
designated by such holder and (iv) when appropriate, after receipt promptly
deliver such cash to or upon the order of the registered holder of such Right
Certificate.
(d) Except as otherwise provided herein, in case the
registered holder of any Right Certificate shall exercise fewer than all the
Rights evidenced thereby, a new Right Certificate evidencing Rights
equivalent to the Rights remaining unexercised shall be issued by the Rights
Agent and delivered to the registered holder of such Right Certificate or to
such holder's duly authorized assigns, subject to the provisions of Section
15.
(e) Notwithstanding anything in this Rights Agreement to the
contrary, any Rights that are at any time beneficially owned by (i) an Acquiring
Person or an Affiliate or Associate of an Acquiring Person, (ii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring
16
Person (or of any such Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration)
from the Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom the Acquiring Person has any continuing
agreement, arrangement or understanding regarding the transferred Rights or
(B) a transfer which the Board of Directors of the Company has determined is
part of a plan, arrangement or understanding which has as a primary purpose
or effect the avoidance of this Section 7(e), and subsequent transferees of
such Persons, shall be null and void without any further action and no holder
of such Rights shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Rights Agreement or otherwise. The
Company shall use all reasonable efforts to ensure that the provisions of
this Section 7(e) are complied with, but shall have no liability to any
holder of any Right Certificate or any other Person as a result of its
failure to make any determinations with respect to an Acquiring Person or its
Affiliate or Associate, or any transferee thereof, hereunder. From and after
the time a Person becomes an Acquiring Person, no Right Certificate shall be
issued pursuant to Section 3 or Section 6 hereof that represents Rights that
are or have become void pursuant to the provisions hereof, and any Right
Certificate delivered to the Rights Agent that represents Rights that are or
have become void pursuant to the provisions of this paragraph shall be
canceled.
(f) Notwithstanding anything in this Rights Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder of any Right
Certificates upon the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed and signed the
certificate contained in the form of election to purchase set forth on the
reverse side of the Right Certificate surrendered for such exercise and (ii)
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company
shall reasonably request.
(g) The Company may temporarily suspend, for a period of time
not to exceed 90 calendar days after the Distribution Date, the exercisability
of the Rights in order to prepare and file a registration statement under the
Securities Act, on an appropriate form, with respect to the Preferred Shares
purchasable upon exercise of the Rights and permit such registration statement
to become effective; PROVIDED, HOWEVER, that no such suspension shall remain
effective after, and the Rights shall without any further action by the Company
or any other Person become exercisable immediately upon, the effectiveness of
such registration statement. Upon any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended and shall issue
17
a further public announcement at such time as the suspension is no longer in
effect. Notwithstanding any provision herein to the contrary, the Rights shall
not be exercisable in any jurisdiction if the requisite qualification under the
blue sky or securities laws of such jurisdiction shall not have been obtained or
the exercise of the Rights shall not be permitted under applicable law.
SECTION 8. CANCELATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered or presented for the purpose of exercise,
transfer, split-up, combination or exchange shall, and any Right Certificate
representing Rights that have become null and void and nontransferable pursuant
to Section 7(e) surrendered or presented for any purpose shall, if surrendered
or presented to the Company or to any of its agents, be delivered to the Rights
Agent for cancelation or in canceled form, or, if surrendered or presented to
the Rights Agent, shall be canceled by it, and no Right Certificates shall be
issued in lieu thereof except as expressly permitted by this Rights Agreement.
The Company shall deliver to the Rights Agent for cancelation and retirement,
and the Rights Agent shall so cancel and retire, any Right Certificate purchased
or acquired by the Company. The Rights Agent shall deliver all canceled Right
Certificates to the Company, or shall, at the written request of the Company,
destroy such canceled Right Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES.
(a) The Company shall cause to be reserved and kept available out of its
authorized and unissued Preferred Shares or any authorized and issued Preferred
Shares held in its treasury, free from preemptive rights or any right of first
refusal, a number of Preferred Shares sufficient to permit the exercise in full
of all outstanding Rights.
(b) If there are not sufficient Preferred Shares issued but
not outstanding or authorized but unissued to permit the exercise or exchange of
Rights in accordance with Section 11, the Company shall take all such action as
may be necessary to authorize additional Preferred Shares for issuance upon the
exercise or exchange of Rights pursuant to Section 11; PROVIDED, HOWEVER, that
if the Company is unable to cause the authorization of additional Preferred
Shares, then the Company shall, or (if action by the Company's stockholders is
necessary to cause such authorization) in lieu of seeking any such
authorization, the Company may, to the extent necessary and permitted by
applicable law and any agreements or instruments in effect prior to the
18
Distribution Date to which it is a party, (i) upon surrender of a Right, pay
cash equal to the Purchase Price in lieu of issuing Preferred Shares and
requiring payment therefor, (ii) upon due exercise of a Right and payment of the
Purchase Price for each Preferred Share as to which such Right is exercised,
issue common stock or other equity securities having a value equal to the value
of the Preferred Shares that otherwise would have been issuable pursuant to
Section 11, which value shall be determined by a nationally recognized
investment banking firm selected by the Board of Directors of the Company, or
(iii) upon due exercise of a Right and payment of the Purchase Price for each
Preferred Share as to which such Right is exercised, distribute a combination of
Preferred Shares, cash and/or other equity and/or debt securities having an
aggregate value equal to the value of the Preferred Shares that otherwise would
have been issuable pursuant to Section 11, which value shall be determined by a
nationally recognized investment banking firm selected by the Board of Directors
of the Company. To the extent that any legal or contractual restrictions
(pursuant to agreements or instruments in effect prior to the Distribution Date
to which it is party) prevent the Company from paying the full amount 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 that are not then
restricted on a pro rata basis as such payments become permissible under such
legal or contractual restrictions until such payments have been paid in full.
(c) The Company shall take all such action as may be necessary
to ensure that all Preferred Shares delivered upon exercise or exchange of
Rights shall, at the time of delivery of the certificates for such Preferred
Shares (subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable shares.
(d) So long as the Preferred Shares issuable upon the
exercise or exchange of Rights may be listed on any national securities
exchange, the Company shall use its best efforts to cause, from and after
such time as the Rights become exercisable or exchangeable, all Preferred
Shares reserved for such issuance to be listed on such securities exchange
upon official notice of issuance upon such exercise or exchange.
(e) The Company shall pay when due and payable any and all
Federal and state transfer taxes and charges which may be payable in respect of
the issuance or delivery of Right Certificates or of any Preferred Shares or
Common
19
Shares or other securities upon the exercise or exchange of the Rights. The
Company shall not, however, be required to pay any transfer tax which may be
payable in respect of any transfer or delivery of Right Certificates to a Person
other than, or in respect of the issuance or delivery of certificates for the
Preferred Shares or Common Shares or other securities, as the case may be, in a
name other than that of, the registered holder of the Right Certificate
evidencing Rights surrendered for exercise or exchange or to issue or deliver
any certificates for Preferred Shares or Common Shares or other securities, as
the case may be, upon the exercise or exchange of any Rights until any such tax
shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
SECTION 10. PREFERRED SHARES RECORD DATE. Each Person in whose
name any certificate for Preferred Shares or Common Shares or other securities
is issued upon the exercise or exchange of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Shares or Common
Shares or other securities, as the case may be, represented thereby on, and such
certificate shall be dated, the date on which the Right Certificate evidencing
such Rights was duly surrendered and payment of any Purchase Price (and any
applicable transfer taxes) was made; PROVIDED, HOWEVER, that, if the date of
such surrender and payment is a date upon which the transfer books of the
Company for the Preferred Shares or Common Shares or other securities, as the
case may be, are closed, such Person shall be deemed to have become the record
holder of such Preferred Shares or Common Shares or other securities, as the
case may be, on, and such certificate shall be dated, the next succeeding
Business Day on which the transfer books of the Company for the Preferred Shares
or Common Shares or other securities, as the case may be, are open.
SECTION 11. ADJUSTMENTS IN RIGHTS AFTER THERE IS AN
ACQUIRING PERSON; EXCHANGE OF RIGHTS FOR SHARES; BUSINESS COMBINATIONS. (a)
Upon a Person becoming an Acquiring Person, each holder of a Right, except as
provided in Section 7(e), shall thereafter have a right to receive, upon
exercise thereof for the Purchase Price in accordance with the terms of this
Rights Agreement, such number of one one- thousandths (1/1,000ths) of a
Preferred Share as shall equal the result obtained by multiplying the
Purchase Price by a fraction, the numerator of which is the number of one
one- thousandths (1/1,000ths) of a Preferred Share for which such Right is
then exercisable and the denominator of which is 50% of the Market Value of
the Common Shares on the date on
20
which such Person became an Acquiring Person. As soon as practicable after a
Person becomes an Acquiring Person (provided the Company shall not have elected
to make the exchange permitted by Section 11(b)(i) for all outstanding Rights),
the Company shall use its best efforts to:
(i) prepare and file a registration statement under the
Securities Act, on an appropriate form, with respect to the Preferred
Shares purchasable upon exercise of the Rights;
(ii) cause such registration statement to become effective as
soon as practicable after such filing;
(iii) cause such registration statement to remain effective
(with a prospectus at all times meeting the requirements of the
Securities Act) until the Expiration Date; and
(iv) qualify or register the Preferred Shares purchasable upon
exercise of the Rights under the blue sky or securities laws of such
jurisdictions as may be necessary or appropriate.
(b)(i) The Board of Directors of the Company may, at its
option, at any time after a Person becomes an Acquiring Person, mandatorily
exchange all or part of the then outstanding and exercisable Rights (which shall
not include Rights that shall have become null and void and nontransferable
pursuant to Section 7(e)) for consideration per Right consisting of either (A)
one-half of the securities that would be issuable at such time upon the exercise
of one Right in accordance with Section 11(a) or, if applicable, Section
9(b)(ii) or 9(b)(iii) or (B) if applicable, the cash consideration specified in
Section 9(b)(i) (the consideration issuable per Right pursuant to this Section
11(b)(i) being the "Exchange Consideration"). The Board of Directors of the
Company may, at its option, issue a number of Common Shares in lieu of each
Preferred Share equal to the Formula Number (as defined in the Certificate of
Designation) if there are sufficient Common Shares issued but not outstanding or
authorized but unissued. If the Board of Directors of the Company elects to
exchange all the Rights for Exchange Consideration pursuant to this Section
11(b)(i) prior to the physical distribution of the Right Certificates, the
Company may distribute the Exchange Consideration in lieu of distributing Right
Certificates, in which case for purposes of this Rights Agreement holders of
Rights shall be deemed to have simultaneously received and surrendered for
exchange Right Certificates on the date of such distribution.
21
Notwithstanding the foregoing, the Board of Directors of the Company may not
effect such exchange at any time after any Person (other than the Company,
any Subsidiary of the Company or any employee benefit plan of the Company or
any of its Subsidiaries or any Person holding Common Shares for or pursuant
to the terms of any such employee benefit or compensation plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial
Owner of more than 50% of the Common Shares then outstanding. From and after
the time a Person becomes an Acquiring Person and, subsequent thereto, a
Business Combination occurs, any Rights that theretofore have not been
exchanged pursuant to this Section 11(b) shall thereafter be exercisable only
in accordance with Section 11(c) and may not be exchanged pursuant to this
Section 11(b). The exchange of the Rights by the Board of Directors may be
made effective at such time, on such basis and with such conditions as the
Board of Directors in its sole discretion may establish.
(ii) Any action of the Board of Directors of the Company
ordering the exchange of any Rights pursuant to Section 11(b)(i) shall be
irrevocable and, immediately upon the effectiveness of such action and
without any further action and without any notice, the right to exercise any
such Right so exchanged pursuant to Section 11(a) shall terminate and the
only right thereafter of a holder of such Right shall be to receive the
Exchange Consideration in exchange for each such Right held by such holder
or, if the Exchange Consideration shall not have been paid or issued, to
exercise any such Right pursuant to Section 11(c)(i). The Company shall
promptly give public notice of any such exchange; PROVIDED, HOWEVER, that the
failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such
exchange to all holders of the Rights to be exchanged at their last addresses
as they appear upon the registry books of the Rights Agent. Any notice which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of exchange shall state the
method by which the exchange of the Rights for the Exchange Consideration
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 shall have become
null and void and nontransferable pursuant to the provisions of Section 7(e))
held by each holder of Rights.
(c)(i) In the event that following the time a Person
becomes an Acquiring Person, directly or indirectly, any transactions
specified in the following clause (A), (B) or (C) of this Section 11(c)(i)
(each such transaction being a "Business Combination") shall be consummated:
(A) the Company shall consolidate with, or merge with and
into, any Person;
(B) any Person shall merge with and into the Company and, in
connection with such merger,
22
all or part of the outstanding Common Shares shall be changed into or
exchanged for capital stock or other securities of the Company or of
any other Person or cash or any other property; or
(C) the Company shall sell, lease, exchange or otherwise
transfer or dispose of (or one or more of its Subsidiaries shall sell,
lease, exchange or otherwise transfer or dispose of), in one or more
transactions, the Major Part of the assets of the Company and its
Subsidiaries (taken as a whole) to any Person,
then, in each such case, proper provision shall be made so that each holder of a
Right, except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof for the Purchase Price in accordance with the
terms of this Rights Agreement, the securities specified below (or, at such
holder's option, the securities specified in Section 11(a) if the Company is the
surviving corporation in such Business Combination):
(1) if the Principal Party in such Business Combination has
Registered Common Shares outstanding, each Right shall thereafter
represent the right to receive, upon the exercise thereof for the
Purchase Price in accordance with the terms of this Rights Agreement,
such number of Registered Common Shares of such Principal Party, free
and clear of all liens, encumbrances or other adverse claims, as shall
have an aggregate Market Value as of the time of exercise thereof equal
to the result obtained by multiplying the Purchase Price by two;
(2) if the Principal Party involved in such Business
Combination does not have Registered Common Shares outstanding, each
Right shall thereafter represent the right to receive, upon the
exercise thereof for the Purchase Price in accordance with the terms of
this Rights Agreement, at the election of the holder of such Right at
the time of the exercise thereof, any of:
(x) such number of Common Shares of the Surviving
Person in such Business Combination as shall have an aggregate
Book Value immediately after giving effect to such Business
Combination equal to the result obtained by multiplying the
Purchase Price by two;
23
(y) such number of Common Shares of the Principal
Party in such Business Combination (if the Principal Party is
not also the Surviving Person in such Business Combination) as
shall have an aggregate Book Value immediately after giving
effect to such Business Combination equal to the result
obtained by multiplying the Purchase Price by two; or
(z) if the Principal Party in such Business
Combination is an Affiliate of one or more Persons that has
Registered Common Shares outstanding, such number of
Registered Common Shares of whichever of such Affiliates of
the Principal Party has Registered Common Shares with the
greatest aggregate Market Value on the date of consummation of
such Business Combination as shall have an aggregate Market
Value on the date of such Business Combination equal to the
result obtained by multiplying the Purchase Price by two.
(ii) The Company shall not consummate any Business Combination
unless each issuer of Common Shares for which Rights may be exercised, as set
forth in this Section 11(c), shall have sufficient authorized Common Shares that
have not been issued or reserved for issuance (and which shall, when issued upon
exercise thereof in accordance with this Rights Agreement, be validly issued,
fully paid and nonassessable and free of preemptive rights, rights of first
refusal or any other restrictions or limitations on the transfer or ownership
thereof) to permit the exercise in full of the Rights in accordance with this
Section 11(c) and unless prior thereto:
(A) a registration statement under the Securities Act on an
appropriate form, with respect to the Rights and the Common Shares of
such issuer purchasable upon exercise of the Rights, shall be effective
under the Securities Act; and
(B) the Company and each such issuer shall have:
(1) executed and delivered to the Rights Agent a
supplemental agreement providing for the assumption by such
issuer of the obligations set forth in this Section 11(c)
(including the obligation of such issuer to issue Common
Shares upon the exercise of Rights in accordance with the
terms set forth in Sections 11(c)(i) and
24
11(c)(iii)) and further providing that such issuer, at its own
expense, shall use its best efforts to:
(x) cause a registration statement under the
Securities Act on an appropriate form, with respect
to the Rights and the Common Shares of such issuer
purchasable upon exercise of the Rights, to remain
effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the
Expiration Date;
(y) qualify or register the Rights and the
Common Shares of such issuer purchasable upon
exercise of the Rights under the blue sky or
securities laws of such jurisdictions as may be
necessary or appropriate; and
(z) list the Rights and the Common Shares of
such issuer purchasable upon exercise of the Rights
on each national securities exchange on which the
Common Shares were listed prior to the consummation
of the Business Combination or, if the Common Shares
were not listed on a national securities exchange
prior to the consummation of the Business
Combination, on a national securities exchange;
(2) furnished to the Rights Agent a written opinion
of independent counsel stating that such supplemental
agreement is a valid, binding and enforceable agreement of
such issuer; and
(3) filed with the Rights Agent a certificate of a
nationally recognized firm of independent accountants setting
forth the number of Common Shares of such issuer that may be
purchased upon the exercise of each Right after the
consummation of such Business Combination.
(iii) After consummation of any Business Combination and
subject to the provisions of Section 11(c)(ii), (A) each issuer of Common Shares
for which Rights may be exercised as set forth in this Section 11(c) shall be
liable for, and shall assume, by virtue of such Business Combination, all the
obligations and duties of the Company pursuant to this Rights Agreement, (B) the
term "Company" shall thereafter be deemed to refer to such issuer, (C) each such
issuer shall take such steps
25
in connection with such consummation as may be necessary to assure that the
provisions hereof (including the provisions of Sections 11(a) and 11(c)) shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
Common Shares thereafter deliverable upon the exercise of the Rights, and (D)
the number of Common Shares of each such issuer thereafter 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 of
Sections 11 and 12 and the provisions of Sections 7, 9 and 10 with respect to
the Preferred Shares shall apply, as nearly as reasonably may be, on like terms
to any such Common Shares.
(iv) In case the issuer of Common Shares for which Rights may be
exercised, as set forth in this Section 11(c), has a provision in any of its
authorized securities or in its certificate of incorporation or by-laws or other
instrument governing its affairs, which provision would have the effect of (i)
causing such issuer to issue (other than to holders of Rights pursuant to this
Section 11(c)), in connection with, or as a consequence of, the consummation of
a transaction referred to in this Section 11(c), Common Shares of such issuer at
less than the then Market Value per share thereof or securities exercisable for,
or convertible into, Common Shares of such issuer at less than such then Market
Value, or (ii) providing for any special payment, tax or similar provision in
connection with the issuance of the Common Shares of such issuer pursuant to the
provisions of Section 11(c), then, in such event, the Company hereby agrees with
each holder of Rights that it shall not consummate any such transaction unless
prior thereto the Company and such issuer shall have executed and delivered to
the Rights Agent a supplemental agreement providing that the provision in
question of such issuer shall have been canceled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
SECTION 12. CERTAIN ADJUSTMENTS. (a) To preserve the actual or
potential economic value of the Rights, if at any time after the date of this
Rights Agreement there shall be any change in the Common Shares or the Preferred
Shares, whether by reason of stock dividends, stock splits, reclassifications,
recapitalizations, mergers, consolidations, combinations or exchanges of
securities, split-ups, split-offs, spin-offs, liquidations, other similar
changes in capitalization, any distribution or issuance of cash, assets,
evidences of indebtedness or subscription rights, options or warrants to holders
of Common Shares or Preferred Shares, as the case may be (other than
distribution of the Rights or regular quarterly cash dividends), or otherwise,
then, in each such event the Board of Directors of the Company shall make such
appropriate adjustments in the number of Preferred Shares (or the number and
kind of other securities) issuable upon exercise of each Right, the Purchase
Price and Redemption Price in effect at such time and the number of Rights
outstanding at such time (including the number of Rights or fractional Rights
associated with each Common Share) such that following such adjustment such
event shall not have had the effect of reducing or limiting the benefits the
holders of the Rights would have had absent such event.
(b) If, as a result of an adjustment made pursuant to Section
12(a), the holder of any Right thereafter exercised shall become entitled to
receive any securities other than Preferred Shares, thereafter the number of
such 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 of Sections 11 and 12 and the provisions of
Sections 7, 9 and 10 with respect to the Preferred Shares shall apply, as nearly
as reasonably may be, on like terms to any such other securities.
26
(c) All Rights originally issued by the Company subsequent to
any adjustment made to the amount of Preferred Shares or other securities
relating to a Right shall evidence the right to purchase, for the Purchase
Price, the adjusted number and kind of securities purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(d) Irrespective of any adjustment or change in the Purchase
Price or the number of Preferred Shares or number or kind of other securities
issuable upon the exercise of the Rights, the Right Certificates theretofore and
thereafter issued may continue to express the terms that were expressed in the
initial Right Certificates issued hereunder.
(e) In any case in which action taken pursuant to Section
12(a) requires that an adjustment 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 issuing to the holder of any Right exercised after such record date
the Preferred Shares and/or other securities, if any, issuable upon such
exercise over and above the Preferred Shares and/or other securities, if any,
issuable before giving effect 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 securities upon the
occurrence of the event requiring such adjustment.
SECTION 13. CERTIFICATE OF ADJUSTMENT. Whenever an
adjustment is made as provided in Section 11 or 12, the Company shall (a)
promptly prepare a certificate setting forth such adjustment and a brief
statement of the facts accounting for such adjustment, (b) promptly file with
the Rights Agent and with each transfer agent for the Preferred Shares a copy
of such certificate and (c) mail a brief summary thereof to each holder of a
Right Certificate in accordance with Section 25 (if so required in Section 25
hereof), provided that the failure to prepare, file or mail such certificate
or summary shall not affect the validity of such adjustment. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained.
SECTION 14. ADDITIONAL COVENANTS. (a) Notwithstanding any
other provision of this Rights Agreement, no adjustment to the number of
Preferred Shares (or fractions of a share) or other securities for which a Right
is exercisable or the number of Rights outstanding or associated with each
Common Share or any similar or other adjustment
27
shall be made or be effective if such adjustment would have the effect of
reducing or limiting the benefits the holders of the Rights would have had
absent such adjustment, including the benefits under Sections 11 and 12, unless
the terms of this Rights Agreement are amended so as to preserve such benefits.
(b) The Company covenants and agrees that, after the
Distribution Date, except as permitted by Section 26, it shall not take (or
permit any Subsidiary of the Company to take) any action if at the time such
action is taken it is intended or reasonably foreseeable that such action
will reduce or otherwise limit the benefits the holders of the Rights would
have had absent such action, including the benefits under Sections 11 and 12.
Any action taken by the Company during any period after any Person becomes an
Acquiring Person but prior to the Distribution Date shall be null and void
unless such action could be taken under this Section 14(b) from and after the
Distribution Date. The Company shall not consummate any Business Combination
if (i) any issuer of Common Shares for which Rights may be exercised after
such Business Combination in accordance with Section 11(c) shall have taken
any action that reduces or otherwise limits the benefits the holders of the
Rights would have had absent such action, including the benefits under
Sections 11 and 12, (ii) at the time of or immediately after such
consolidation, merger, sale, transfer or other transaction there are any
rights, warrants or other instruments or securities outstanding or agreements
in effect which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights, (iii) prior to,
simultaneously with or immediately after such consolidation, merger, sale,
transfer or other transaction, the stockholders of the Person who
constitutes, or would constitute, the issuer for purposes of Section 11(c)
hereof shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates or Associates or (iv) the form or nature of
organization of the issuer would preclude or limit the exercisability of the
Rights.
SECTION 15. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The
Company may, but shall not be required to, issue fractions of Rights or
distribute Right Certificates which evidence fractional Rights. In lieu of such
fractional Rights, the Company may pay to the registered holders of the Right
Certificates with regard to which such fractional Rights would otherwise be
issuable an amount in cash equal to the same fraction of the current market
value of a whole Right. For purposes of this Section 15(a), the current market
value of a whole Right shall be the closing price of the Rights (as determined
pursuant to the second sentence of the definition of Market Value contained in
Section 1) for the Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable.
(b) The Company may, but shall not be required to, issue
fractions of Preferred Shares (other than one one-thousandths (1/1,000ths) of a
Preferred Share or any integral multiple thereof) upon exercise of the Rights
or distribute certificates that evidence fractional Preferred Shares (other
than one one-thousandths (1/1,000ths) of a Preferred Share or any integral
multiple thereof). In lieu of fractional Preferred Shares, the Company may
elect to (i) utilize a depository arrangement as provided by the terms of the
Preferred Shares or (ii) in the case of a fraction of a Preferred Share
(other than one one-thousandths (1/1,000ths) of a Preferred
28
Share or any integral multiple thereof), pay to the registered holders of Right
Certificates at the time such Rights are exercised as herein provided an amount
in cash equal to the same fraction of the current market value of one Preferred
Share, if any are outstanding and publicly traded (or the same fraction of the
current market value of one Common Share times the Formula Number if the
Preferred Shares are not outstanding and publicly traded). For purposes of this
Section 15(b), the current market value of a Preferred Share (or Common Share)
shall be the closing price of a Preferred Share (or Common Share) (as determined
pursuant to the second sentence of the definition of Market Value contained in
Section 1) for the Trading Day immediately prior to the date of such exercise.
If, as a result of an adjustment made pursuant to Section 12(a), the holder of
any Right thereafter exercised shall become entitled to receive any securities
other than Preferred Shares, the provisions of this Section 15(b) shall apply,
as nearly as reasonably may be, on like terms to such other securities.
(c) The Company may, but shall not be required to, issue
fractions of Common Shares upon exercise or exchange of Rights, or to
distribute certificates that evidence fractional Common Shares. In lieu of
such fractional Common Shares, the Company may pay to the registered holders
of the Right Certificates with regard to which such fractional Common Shares
would otherwise be issuable an amount in cash equal to the same fraction of
the current Market Value of one Common Share as of the date on which a Person
became an Acquiring Person.
(d) Each holder of Rights by the acceptance of such Rights
expressly waives such holder's right to receive any fractional Rights or any
fractional shares upon exercise or exchange of a Right except as provided in
this Section 15.
SECTION 16. RIGHTS OF ACTION. (a) All rights of action in
respect of this Rights Agreement 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 Common Shares) may, in such holder's
own behalf and for such holder's own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, such holder's right to exercise the Rights
evidenced by such Right Certificate in the manner provided
29
in such Right Certificate and in this Rights Agreement. Without limiting the
foregoing or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Rights Agreement and shall be entitled to specific
performance of the obligations of any Person under, and injunctive relief
against actual or threatened violations of the obligations of any Person subject
to, this Rights Agreement.
(b) Any holder of Rights who prevails in an action to enforce
the provisions of this Rights Agreement shall be entitled to recover the
reasonable costs and expenses, including attorneys' fees, incurred in such
action.
SECTION 17. TRANSFER AND OWNERSHIP OF RIGHTS AND RIGHT
CERTIFICATES. (a) Prior to the Distribution Date, the Rights shall be
transferable only in connection with the transfer of the Common Shares and the
Right associated with each Common Share shall be automatically transferred upon
the transfer of each Common Share.
(b) After the Distribution Date, the Right Certificates shall
be transferable, subject to Section 7(e), only on the registry books of the
Rights Agent if surrendered at the principal office of the Rights Agent, 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 a Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated certificate for
Common Shares made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice to the contrary.
SECTION 18. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Right Certificate shall be entitled to vote or
receive dividends or other distributions 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 on the exercise of the Rights represented thereby,
nor shall anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Right Certificate, as such, any of the rights of a
stockholder of the Company, including any right to vote for the election of
directors or upon any
30
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, or to receive dividends or other distributions
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
SECTION 19. 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 and execution of this Rights Agreement and the exercise and
performance of its duties hereunder, including any taxes or governmental charges
imposed as a result of the action taken by it hereunder (other than any taxes on
the fees payable to it).
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Rights Agreement in reliance upon
any Right Certificate or certificate for the Common Shares or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons.
SECTION 20. MERGER OR CONSOLIDATION OR CHANGE OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any corporation resulting
from any merger or consolidation to which the Rights Agent or any successor
Rights Agent shall be a party, or any corporation succeeding to the stock
transfer or corporate trust business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Rights Agreement
without the execution or filing of any paper or any further act on the part of
any of the parties hereto; PROVIDED, HOWEVER, that such corporation would be
eligible for appointment as a successor Rights Agent under the provisions of
Section 22. In case, at the time such successor Rights Agent shall succeed to
the agency created by this Rights 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
31
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 Rights Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so counter-
signed; 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 Rights Agreement.
SECTION 21. DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes the duties and obligations imposed by this Rights Agreement upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates (or, prior to the Distribution Date, of the Common Shares),
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken, suffered or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Rights Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including the identity of any Acquiring Person) be proved or
established by the Company prior to taking, refraining from taking or suffering
any action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be conclusively
proved and established by a certificate signed by any one of the Chairman of the
Board, any Vice Chairman of the Board, the Chief Executive Officer, the
President, the Chief Operating Officer, the Chief Financial Officer, a Vice
President (whether preceded by any additional title), the Treasurer or the
Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Rights Agreement in reliance
upon such certificate.
32
(c) The Rights Agent shall be liable hereunder only for its
own negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Rights Agreement or
in the Right Certificates (except as to 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 be under any responsibility in
respect of the validity of this Rights Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Rights Agreement or in any Right
Certificate; nor shall it be responsible for any adjustment required under the
provisions of Section 11 or 12 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 Preferred Shares or Common Shares
to be issued pursuant to this Rights Agreement or any Right Certificate or as to
whether any Preferred Shares or Common Shares will, when so issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it shall 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 Rights 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 the Board, any Vice Chairman of the Board, the
Chief Executive Officer, the President, the Chief Operating Officer, a Vice
President (whether preceded by any additional title), the Secretary or the
Treasurer of the Company, in connection with its duties and it shall not be
liable for any action taken or suffered to be taken by it in
33
good faith in accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company or its Subsidiaries may be interested, or
contract with or lend money to the Company or its Subsidiaries or otherwise act
as fully and freely as though it were not the Rights Agent under this Rights
Agreement. Nothing herein shall preclude the Rights Agent from acting in any
other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either itself
or by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of any
such attorneys or agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct provided reasonable care was exercised in
the selection and continued employment thereof.
(j) The Company agrees to indemnify and to hold the Rights
Agent harmless against any loss, liability, damage or expense (including
reasonable fees and expenses of legal counsel) which the Rights Agent may incur
resulting from its actions as Rights Agent pursuant to this Rights Agreement;
PROVIDED, HOWEVER, that the Rights Agent shall not be indemnified or held
harmless with respect to any such loss, liability, damage or expense incurred by
the Rights Agent as a result of, or arising out of, its own negligence, bad
faith or wilful misconduct. In no case shall the Company be liable with respect
to any action, proceeding, suit or claim against the Rights Agent unless the
Rights Agent shall have notified the Company, by letter or by facsimile
confirmed by letter, of the assertion of any action, proceeding, suit or claim
against the Rights Agent, promptly after the Rights Agent shall have notice of
any such assertion of an action, proceeding, suit or claim or have been served
with the summons or other first legal process giving information as to the
nature and basis of the action, proceeding, suit or claim. The Company shall be
entitled to participate at its own expense in the defense of any such action,
proceeding, suit or claim, and, if the Company so elects, the Company shall
assume the defense of any such action, proceeding, suit or claim. In the event
that the Company assumes such defense, the Company shall not thereafter be
liable for the fees and expenses of any
34
additional counsel retained by the Rights Agent, so long as the Company shall
retain counsel satisfactory to the Rights Agent, in the exercise of its
reasonable judgment, to defend such action, proceeding, suit or claim. The
Rights Agent agrees not to settle any litigation in connection with any action,
proceeding, suit or claim with respect to which it may seek indemnification from
the Company without the prior written consent of the Company.
SECTION 22. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Rights Agreement upon 30 days' notice in writing mailed to the Company
and to each transfer agent of the Common Shares and the Preferred Shares by
registered or certified mail, and, following the Distribution Date, 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 days' notice in
writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Shares and the Preferred
Shares by registered or certified mail and following the Distribution Date,
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 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
such holder's Right Certificate), then the registered holder of any Right
Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of the United States or of the State of New
York (or of any other state of the United States so long as such corporation
is authorized to conduct a stock transfer or corporate trust business in the
State of New York), in good standing, having a principal office in the State
of New York, which is authorized under such laws to exercise stock transfer
or 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
35
$50,000,000; PROVIDED, HOWEVER, that the principal transfer agent for the
Common Shares shall in any event be qualified to be the Rights Agent. 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
Common Shares and the Preferred 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 22, 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 23. ISSUANCE OF ADDITIONAL RIGHTS AND RIGHT
CERTIFICATES. Notwithstanding any of the provisions of this Rights 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 made in accordance
with the provisions of this Rights Agreement. In addition, in connection with
the issuance or sale of Common Shares following the Distribution Date and
prior to the earliest of the Redemption Date, the Exchange Date, to the
extent applicable, and the Expiration Date, the Company (a) shall, with
respect to Common Shares so issued or sold pursuant to the exercise of stock
options or under any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities, notes or debentures issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate
by the Board of Directors of the Company, issue Right Certificates
representing the appropriate number of Rights in connection with such
issuance or sale; PROVIDED, HOWEVER, that (i) no such Right Certificate shall
be issued if, and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material adverse tax
consequences to the Company or the Person to whom such Right Certificate
would be issued, (ii) no such Right Certificate shall be issued if, and to
the extent that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof and (iii) no such Right Certificate shall be
issued to an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
36
SECTION 24. REDEMPTION AND TERMINATION. (a) The Board of
Directors of the Company may, at its option, at any time prior to the earlier
of (i) such time as a Person becomes an Acquiring Person and (ii) the
Expiration Date, order the redemption of all, but not fewer than all, the
then outstanding Rights at the Redemption Price (the date of such redemption
being the "Redemption Date"), and the Company, at its option, may pay the
Redemption Price either in cash or Common Shares or other securities of the
Company deemed by the Board of Directors of the Company, in the exercise of
its sole discretion, to be at least equivalent in value to the Redemption
Price. The redemption of the Rights may be made effective at such time, on
such basis and with such conditions as the Board of Directors in its sole
discretion may establish.
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights (or at such later time
as the Board of Directors may establish for the effectiveness of such
redemption), and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right thereafter of
the holders of Rights shall be to receive the Redemption Price. Within 10
Business Days after the action of the Board of Directors of the Company
ordering the redemption of the Rights, the Company shall give notice of such
redemption to the Rights Agent and the holders of the then outstanding Rights
by mailing such notice to all such holders at their last addresses as they
appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Each such notice of redemption shall state the method by which
payment of the Redemption Price will be made. The notice, if mailed in the
manner herein provided, shall be conclusively presumed to have been duly
given, whether or not the holder of Rights receives such notice. In any case,
failure to give such notice by mail, or any defect in the notice, to any
particular holder of Rights shall not affect the sufficiency of the notice to
other holders of Rights. Neither the Company nor any of its Affiliates or
Associates may redeem, acquire or purchase for value any Rights at any time
in any manner except as specifically set forth in this Section or in Section
11(b) or in connection with the purchase of Common Shares prior to the
Distribution Date.
SECTION 25. NOTICES. (a) In case any event described in
Section 11(a) or Section 11(c) shall occur, then the Company shall, as soon
as practicable thereafter, give to each holder of a Right Certificate (or if
occurring prior to the Distribution Date, the holders of the Common Shares)
in accordance with Section 25(b) hereof, a notice of the occurrence of such
event, which notice shall describe such event and the consequences of such
event to holders of Rights under Section 11(a) and Section 11(c) hereof.
(b) Notices or demands authorized by this Rights Agreement
to be given or made by the Rights Agent or by the holder of a Right
Certificate (or, prior to the Distribution Date, of the Common Shares) to or
on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until
37
another address is filed in writing with the Rights Agent) as follows:
XXXXXX HOLDINGS, INC.
000 Xxxx Xxxx Xxxxxx
Xxxxxx, XX 00000
Attention: General Counsel
Subject to the provisions of Section 22, any notice or demand authorized by this
Rights Agreement to be given or made by the Company or by the holder of a Right
Certificate (or, prior to the Distribution Date, of the Common Shares) 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:
MELLON INVESTOR SERVICES LLC
c/o Dimac
000 Xxxxx Xxxxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxx Xxxxxxx
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to any holder of a Right Certificate (or, prior
to the Distribution Date, of the 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 Rights Agent
or, prior to the Distribution Date, on the registry books of the transfer agent
for the Common Shares.
SECTION 26. SUPPLEMENTS AND AMENDMENTS. At any time prior to
the time any person becomes an Acquiring Person, and subject to the last
sentence of this Section 26, the Company may, and the Rights Agent shall if the
Company so directs, supplement or amend any provision of this Rights Agreement
in any manner which the Company may deem necessary or desirable (including the
date on which the Expiration Date or the Distribution Date shall occur, the
amount of the Purchase Price, the definition of "Acquiring Person" or the time
during which the Rights may be redeemed pursuant to Section 24) without the
approval of any holder of the Rights. From and after the time any Person becomes
an Acquiring Person, and subject to applicable law, the Company may, and the
Rights Agent shall if the Company so directs, amend this Rights Agreement
without the approval of any holders of Right Certificates (a) to cure any
ambiguity or to correct or supplement any provision contained herein which may
be defective or inconsistent with any other
38
provision of this Rights Agreement or (b) to otherwise change or supplement
any other provisions in this Agreement in any matter which the Company may
deem necessary or desirable and which shall not adversely affect the
interests of the holders of Right Certificates (other than an Acquiring
Person or an Affiliate or Associate of an Acquiring Person). Any supplement
or amendment to this Rights Agreement duly approved by the Company that does
not amend Section 19, 20, 21 or 22 in a manner adverse to the Rights Agent
shall become effective immediately upon execution by the Company, whether or
not also executed by the Rights Agent. In addition, notwithstanding anything
to the contrary contained in this Rights Agreement, no supplement or
amendment to this Rights Agreement shall be made which reduces the Redemption
Price (except as required by Section 12(a)).
SECTION 27. SUCCESSORS. All the covenants and provisions of
this Rights Agreement by or for the benefit of the Company or the Rights Agent
shall bind and inure to the benefit of their respective successors and assigns
hereunder.
SECTION 28. BENEFITS OF RIGHTS AGREEMENT; DETERMINATIONS AND
ACTIONS BY THE BOARD OF DIRECTORS, ETC. (a) Nothing in this Rights 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, of the Common Shares) any legal or equitable right, remedy or
claim under this Rights Agreement; but this Rights Agreement shall be for the
sole and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Right Certificates (and, prior to the Distribution Date, of the
Common Shares).
(b) Except as explicitly otherwise provided in this Rights
Agreement, the Board of Directors of the Company shall have the exclusive power
and authority to administer this Rights Agreement and to exercise all rights and
powers specifically granted to the Board of Directors of the Company or to the
Company, or as may be necessary or advisable in the administration of this
Rights Agreement, including the right and power to (i) interpret the provisions
of this Rights Agreement and (ii) make all determinations deemed necessary or
advisable for the administration of this Rights Agreement (including a
39
determination to redeem or not redeem the Rights or to amend this Rights
Agreement and a determination of whether there is an Acquiring Person). All
such actions, calculations, interpretations and determinations that are done
or made by the Board of Directors of the Company in good faith shall be
final, conclusive and binding on the Company, the Rights Agent, the holders
of the Rights, as such, and all other parties.
(c) Nothing contained in this Rights Agreement shall be deemed
to be in derogation of the obligation of the Board of Directors of the Company
to exercise its fiduciary duty. Without limiting the foregoing, nothing
contained herein shall be construed to suggest or imply that the Board of
Directors shall not be entitled to reject any tender offer or other acquisition
proposal, or to recommend that holders of Common Shares reject any tender offer,
or to take any other action (including the commencement, prosecution, defense or
settlement of any litigation and the submission of additional or alternative
offers or other proposals) with respect to any tender offer or other acquisition
proposal that the Board of Directors believes is necessary or appropriate in the
exercise of such fiduciary duty.
SECTION 29. SEVERABILITY. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this Rights
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
SECTION 30. GOVERNING LAW. This Rights Agreement and each
Right Certificate issued hereunder shall be deemed to be a contract made under
the law of the State of Delaware and for all purposes shall be governed by and
construed in accordance with the law of such State applicable to contracts to
be made and performed entirely within such State.
SECTION 31. COUNTERPARTS; EFFECTIVENESS. This Rights Agreement
may be executed in any number of counterparts and each of such counterparts
shall for all purposes be deemed to be an original, and all such counterparts
shall together constitute but one and the same instrument. This Rights Agreement
shall be effective as of the Close of Business on the date hereof.
40
SECTION 32. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
of this Rights Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed as of the day and year first above written.
XXXXXX HOLDINGS, INC.
by
________________________
Name:
Title:
MELLON INVESTOR SERVICES LLC,
by
________________________
Name:
Title:
EXHIBIT A
CERTIFICATE OF THE VOTING POWERS,
DESIGNATIONS, PREFERENCES AND RELATIVE
PARTICIPATING, OPTIONAL AND OTHER SPECIAL
RIGHTS AND QUALIFICATIONS, LIMITATIONS
OR RESTRICTIONS OF SERIES A
PARTICIPATING CUMULATIVE
PREFERRED STOCK OF
XXXXXX HOLDINGS, INC.
Pursuant to Section 151 of the General Corporation Law of the
State of Delaware, XXXXXX HOLDINGS, INC. (the "Company"), a corporation
organized and existing under the General Corporation Law of the State of
Delaware, in accordance with the provisions of Section 103 thereof, DOES HEREBY
CERTIFY:
That, pursuant to the authority conferred upon the Board of
Directors of the Company by Article 4.02 of the Restated Certificate of
Incorporation of the Company (the "Charter"), the Board of Directors of the
Company on [ ], 2001, adopted the following resolution designating a new
series of preferred stock as Series A Participating Cumulative Preferred
Stock:
RESOLVED, that, pursuant to the authority vested in the Board
of Directors of the Company in accordance with the provisions of the
Restated Certificate of Incorporation, as amended, of the Company and
the provisions of Section 151(g) of the General Corporation Law of the
State of Delaware, a series of preferred stock of the Company is hereby
authorized, and the designation and number of shares thereof, and the
voting powers, preferences and relative, participating, optional and
other special rights, and the qualifications, limitations or
restrictions thereof, shall be as follows:
SECTION 1. DESIGNATION AND NUMBER OF SHARES. The shares of
such series shall be designated as "Series A Participating Cumulative
Preferred Stock" (the "Series A Preferred Stock"). The number of shares
initially constituting the Series A Preferred Stock shall be [ ]; PROVIDED,
HOWEVER, that, if more than a total of [Same number as previous bracket]
shares of Series A Preferred Stock shall be issuable upon the exercise of
Rights (the "Rights") issued pursuant to the Rights Agreement dated as of
[ ], 2001, between the Company and Mellon Investor Services LLC, a New
Jersey limited liability company, as Rights Agent, as such may be amended
from time to time (the "Rights Agreement"), the Board of Directors of the
Company, pursuant to Section 151(g) of the General Corporation Law of the
State of Delaware, shall direct by resolution or resolutions that a
certificate be properly executed, acknowledged, filed and
2
recorded, in accordance with the provisions of Section 103 thereof, providing
for the total number of shares of Series A Preferred Stock authorized to be
issued to be increased (to the extent that the Charter then permits) to the
largest number of whole shares (rounded up to the nearest whole number) issuable
upon exercise of such Rights.
SECTION 2. DIVIDENDS OR DISTRIBUTIONS. (a) Subject to the
superior rights of the holders of shares of any other series of Preferred
Stock or other class of capital stock of the Company ranking superior to the
shares of Series A Preferred Stock with respect to dividends, the holders of
shares of the Series A Preferred Stock shall be entitled to receive, when, as
and if declared by the Board of Directors, out of the assets of the Company
legally available therefor, (1) quarterly dividends payable in cash on the
last day of each fiscal quarter in each year, or such other dates as the
Board of Directors of the Company shall approve (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
a fraction of a share of Series A Preferred Stock, in the amount of $0.05 per
whole share (rounded to the nearest cent) less the amount of all cash
dividends declared on the Series A Preferred Stock pursuant to the following
clause (2) 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 (the total of which shall not, in any event, be less than zero) and (2)
dividends payable in cash on the payment date for each cash dividend declared
on the Common Stock in an amount per whole share (rounded to the nearest
cent) equal to the Formula Number (as hereinafter defined) then in effect
times the cash dividends then to be paid on each share of Common Stock. In
addition, if the Company shall pay any dividend or make any distribution on
the Common Stock payable in assets, securities or other forms of noncash
consideration (other than dividends or distributions solely in shares of
Common Stock), then, in each such case, the Company shall simultaneously pay
or make on each outstanding whole share of Series A Preferred Stock a
dividend or distribution in like kind equal to the Formula Number then in
effect times such dividend or distribution on each share of the Common Stock.
As used herein, the "Formula Number" shall be 1,000; PROVIDED, HOWEVER, that,
if at any time after [Date of Rights Agreement], 2001, the Company shall (i)
declare or pay any dividend on the Common Stock payable in shares of Common
Stock or make any distribution on the Common Stock in shares of Common Stock,
(ii) subdivide (by a stock split or otherwise) the outstanding shares of
Common Stock into a larger number of shares of Common Stock or (iii) combine
(by a
3
reverse stock split or otherwise) the outstanding shares of Common Stock into
a smaller number of shares of Common Stock, then in each such event the
Formula Number shall be adjusted to a number determined by multiplying the
Formula Number in effect immediately prior to such event by a fraction, the
numerator of which is the number of shares of Common Stock that are
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that are outstanding immediately prior to
such event (and rounding the result to the nearest whole number); and
PROVIDED FURTHER that, if at any time after [Date of Rights Agreement], 2001,
the Company shall issue any shares of its capital stock in a merger,
reclassification, or change of the outstanding shares of Common Stock, then
in each such event the Formula Number shall be appropriately adjusted to
reflect such merger, reclassification or change so that each share of
Preferred Stock continues to be the economic equivalent of a Formula Number
of shares of Common Stock prior to such merger, reclassification or change.
(b) The Company shall declare a dividend or distribution on
the Series A Preferred Stock as provided in Section 2(a) immediately prior to or
at the same time it declares a dividend or distribution on the Common Stock
(other than a dividend or distribution solely in shares of Common Stock);
PROVIDED, HOWEVER, that, in the event no dividend or distribution (other than a
dividend or distribution in shares of Common Stock) 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 $0.05 per
share on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date. The Board of Directors may fix a
record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a dividend or distribution declared thereon, which
record date shall be the same as the record date for any corresponding dividend
or distribution on the Common Stock.
(c) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from and after the Quarterly
Dividend Payment Date next preceding the date of original issue of such shares
of Series A Preferred Stock; PROVIDED, HOWEVER, that dividends on such shares
which are originally issued after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a quarterly
dividend and on or prior to the next succeeding Quarterly Dividend Payment Date
shall begin to accrue and be cumulative from and after such Quarterly Dividend
Payment Date. Notwithstanding the foregoing, dividends on shares of Series A
Preferred Stock
4
which are originally issued prior to the record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive a quarterly
dividend on the first Quarterly Dividend Payment Date shall be calculated as if
cumulative from and after the last day of the fiscal quarter next preceding the
date of original issuance of such shares. 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.
(d) So long as any shares of the Series A Preferred Stock are
outstanding, no dividends or other distributions shall be declared, paid or
distributed, or set aside for payment or distribution, on the Common Stock
unless, in each case, the dividend required by this Section 2 to be declared on
the Series A Preferred Stock shall have been declared.
(e) The holders of the shares of Series A Preferred Stock
shall not be entitled to receive any dividends or other distributions except as
provided herein.
SECTION 3. VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Each holder of Series A Preferred Stock shall be entitled
to a number of votes equal to the Formula Number then in effect, for each share
of Series A Preferred Stock held of record on each matter on which holders of
the Common Stock or stockholders generally are entitled to vote, multiplied by
the maximum number of votes per share which any holder of the Common Stock or
stockholders generally then have with respect to such matter (assuming any
holding period or other requirement to vote a greater number of shares is
satisfied).
(b) Except as otherwise provided herein or by applicable law,
the holders of shares of Series A Preferred Stock and the holders of shares of
Common Stock shall vote together as one class for the election of directors of
the Company and on all other matters submitted to a vote of stockholders of the
Company.
(c) If, at the time of any annual meeting of stockholders for
the election of directors, the equivalent of six quarterly dividends (whether or
not consecutive) payable on any share or shares of Series A Preferred Stock are
in default, the number of directors constituting the Board of
5
Directors of the Company shall be increased by two. In addition to voting
together with the holders of Common Stock for the election of other directors
of the Company, the holders of record of the Series A Preferred Stock, voting
separately as a class to the exclusion of the holders of Common Stock, shall
be entitled at said meeting of stockholders (and at each subsequent annual
meeting of stockholders), unless all dividends in arrears have been paid or
declared and set apart for payment prior thereto, to vote for the election of
two directors of the Company, the holders of any Series A Preferred Stock
being entitled to cast a number of votes per share of Series A Preferred
Stock equal to the Formula Number. Each such additional director shall not be
classified, but shall serve until the next annual meeting of stockholders for
the election of directors, or until his successor shall be elected and shall
qualify, or until his right to hold such office terminates pursuant to the
provisions of this Section 3(c). Until the default in payments of all
dividends which permitted the election of said directors shall cease to
exist, any director who shall have been so elected pursuant to the next
preceding sentence may be removed at any time, without cause, only by the
affirmative vote of the holders of the shares of Series A Preferred Stock at
the time entitled to cast a majority of the votes entitled to be cast for the
election of any such director at a special meeting of such holders called for
that purpose, and any vacancy thereby created may be filled by the vote of
such holders. If and when such default shall cease to exist, the holders of
the Series A Preferred Stock shall be divested of the foregoing special
voting rights, subject to revesting in the event of each and every subsequent
like default in payments of dividends. Upon the termination of the foregoing
special voting rights, the terms of office of all persons who may have been
elected directors pursuant to said special voting rights shall forthwith
terminate, and the number of directors constituting the Board of Directors
shall be reduced by two. The voting rights granted by this Section 3(c) shall
be in addition to any other voting rights granted to the holders of the
Series A Preferred Stock in this Section 3.
(d) Except as provided herein, in Section 11 or by applicable
law, holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for authorizing or taking
any corporate action.
SECTION 4. CERTAIN RESTRICTIONS. (a) Whenever quarterly
dividends or other dividends or distributions payable on the Series A Preferred
Stock as provided in Section 2 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
6
(i) declare or pay dividends on, make any other distributions
on, or redeem or purchase or otherwise acquire for consideration any
shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred
Stock;
(ii) declare or pay dividends on 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 on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the
Series A Preferred Stock; PROVIDED, HOWEVER, that the Company may at
any time redeem, purchase or otherwise acquire shares of any such
parity stock in exchange for shares of any stock of the Company ranking
junior (either as to dividends or upon dissolution, liquidation or
winding up) to the Series A Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock ranking on a
parity with the Series A Preferred Stock, 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 Section 4(a), purchase or otherwise
acquire such shares at such time and in such manner.
SECTION 5. LIQUIDATION RIGHTS. Upon the liquidation,
dissolution or winding up of the Company, whether voluntary or involuntary, no
distribution shall be made (1) to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to
7
the Series A Preferred Stock unless, prior thereto, the holders of shares of
Series A Preferred Stock shall have received an amount equal to the accrued
and unpaid dividends and distributions thereon, whether or not declared, to
the date of such payment, plus an amount equal to the greater of (x) $1,000
per whole share or (y) an aggregate amount per share equal to the Formula
Number then in effect times the aggregate amount to be distributed per share
to holders of Common Stock or (2) to the holders 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 other 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. Neither the merger or consolidation
of the Company into or with another entity nor the merger or consolidation of
any other entity into or with the Company shall be deemed to be a
liquidation, dissolution or winding up of the Company within the meaning of
this Section 5.
SECTION 6. 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 or any other property, then in any such case the then
outstanding shares of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share equal to the Formula
Number then in effect times the aggregate amount of stock, securities, cash or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is exchanged or changed. In the event both this
Section 6 and Section 2 appear to apply to a transaction, this Section 6 will
control.
SECTION 7. NO REDEMPTION; NO SINKING FUND. (a) The shares of
Series A Preferred Stock shall not be subject to redemption by the Company or at
the option of any holder of Series A Preferred Stock; PROVIDED, HOWEVER, that,
subject to Section 4(a)(iv), the Company may purchase or otherwise acquire
outstanding shares of Series A Preferred Stock in the open market or by offer to
any holder or holders of shares of Series A Preferred Stock.
(b) The shares of Series A Preferred Stock shall not be
subject to or entitled to the operation of a retirement or sinking fund.
SECTION 8. RANKING. The Series A Preferred Stock shall rank
junior to all other series of Preferred Stock of the Company as to the payment
of dividends and as to the distribution of assets upon liquidation, dissolution
or winding up, unless the Board of Directors shall specifically determine
otherwise in fixing the powers, preferences and relative, participating,
optional and other special rights of the shares of such series and the
qualifications, limitations and restrictions thereof.
8
SECTION 9. REACQUIRED SHARES. Any shares of Series A
Preferred Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and canceled promptly after the acquisition thereof.
All such shares shall upon their cancelation become authorized but unissued
shares of Preferred Stock, without designation as to series until such shares
are once more designated as part of a particular series by the Board of
Directors pursuant to the provisions of the Charter.
SECTION 10. AMENDMENT. None of the powers, preferences and
relative, participating, optional and other special rights of the Series A
Preferred Stock as provided herein shall be amended in any manner which would
alter or change the powers, preferences, rights or privileges of the holders of
Series A Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least 66-2/3% of the outstanding shares of Series A
Preferred Stock, voting as a separate class.
9
IN WITNESS WHEREOF, the Company has caused this Certificate to
be duly executed in its corporate name on this [ ]th day of [ ], 200[ ].
XXXXXX HOLDINGS, INC.,
by
________________________
Name:
Title:
EXHIBIT B
[Form of Right Certificate]
Certificate No. R-
___________ Rights
NOT EXERCISABLE AFTER [ ], 2011, OR EARLIER IF
REDEEMED OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.01 PER RIGHT, AND ARE SUBJECT TO EXCHANGE, ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN
THE RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF ARE
NULL AND VOID AND ARE NO LONGER TRANSFERABLE.
Right Certificate
XXXXXX HOLDINGS, INC.
This certifies that , or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of [ ], 2001 as it may be amended from time to
time (the "Rights Agreement"), between XXXXXX HOLDINGS, INC., a Delaware
corporation (the "Company"), and Mellon Investor Services LLC, as Rights Agent
(the "Rights Agent"), unless the Rights evidenced hereby shall have been
previously redeemed or exchanged by the Company, to purchase from the Company at
any time after the Distribution Date (as defined in the Rights Agreement) and
prior to 5:00 p.m., New York City time, on the 10th anniversary of the date of
the Rights Agreement (the "Expiration Date"), at the principal office or offices
of the Rights Agent designated for such purpose, or its successors as Rights
Agent, one one-thousandth (1/1,000th) of a fully paid, nonassessable share of
Series A Participating Cumulative Preferred Stock, $.01 par value, of the
Company (the "Preferred Shares"), at a purchase price per one one-thousandth
(1/1,000th) of a share equal to $[ ].00 (the "Purchase Price") payable in cash,
upon presentation and surrender of this Right Certificate with the Form of
Election to Purchase duly executed.
The Purchase Price and the number and kind of shares which may
be purchased upon exercise of each Right evidenced by this Right Certificate, as
set forth above, are the Purchase Price and the number and kind of shares which
may be
2
so purchased as of [Date of Rights Agreement], 2001. As provided in the
Rights Agreement, the Purchase Price and the number and kind of shares which
may be purchased upon the exercise of each Right evidenced by this Right
Certificate are subject to modification and adjustment upon the happening of
certain events.
If the Rights evidenced by this Right Certificate are at any
time beneficially owned by an Acquiring Person or an Affiliate or Associate of
an Acquiring Person (as such terms are defined in the Rights Agreement), such
Rights shall be null and void and nontransferable and the holder of any such
Right (including any purported transferee or subsequent holder) shall not have
any right to exercise or transfer any such Right.
This Right Certificate is subject to all 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
reference to the Rights Agreement is hereby made for a full description of the
rights, limitations of rights, obligations, duties and immunities hereunder of
the Rights Agent, the Company and the holders of the Right Certificates. Copies
of the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are also available from the Company upon written request.
This Right Certificate, with or without other Right
Certificates, upon surrender at the principal stock transfer or corporate trust
office of the Rights Agent, may be exchanged for another Right Certificate or
Right Certificates of like tenor and date evidencing Rights entitling the holder
to purchase a like aggregate number and kind of shares as the Rights evidenced
by the Right Certificate or Right Certificates surrendered shall have entitled
such holder to purchase. If this Right Certificate shall be exercised in part,
the holder shall be entitled to receive upon surrender hereof another Right
Certificate or Right Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate may be redeemed by the Company at its option
at a redemption price (in cash or shares of Common Stock or other securities of
the Company deemed by the Board of Directors to be at least equivalent in value)
of $.01 per Right (which amount shall be subject to adjustment as provided in
the Rights Agreement) at any time prior to the earlier of (i) such time as a
Person becomes an Acquiring Person and (ii) the Expiration Date.
3
The Company may, but shall not be required to, issue
fractions of Preferred Shares (other than one one-thousandth (1/1,000th) of a
share or any integral multiple thereof) or distribute certificates which
evidence fractions of Preferred Shares (other than one one-thousandth
(1/1,000th) of a share or any integral multiple thereof) upon the exercise of
any Right or Rights evidenced hereby. In lieu of issuing fractional shares,
the Company may elect to make a cash payment as provided in the Rights
Agreement for fractions of a share other than one one-thousandth (1/1,000th)
of a share or any integral multiple thereof or to issue certificates or
utilize a depository arrangement as provided in the terms of the Rights
Agreement and the Preferred Shares.
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 on the exercise or exchange hereof, nor shall
anything contained in the Rights Agreement or herein be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder of the
Company, including, without limitation, any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or other
distributions or subscription rights, or otherwise, until the Right or Rights
evidenced by this Right Certificate shall have been exercised or exchanged as
provided 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 an authorized signatory
of the Rights Agent.
4
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal.
Dated as of:
XXXXXX HOLDINGS, INC.,
by
______________________________
Name:
Title:
Attest:
_________________________
Name:
Title:
Date of countersignature:
Countersigned:
MELLON INVESTOR SERVICES LLC,
as Rights Agent,
by
_____________________
Authorized Signatory
5
[On Reverse Side of Right Certificate]
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if
such holder desires to exercise the Rights
represented by this Right Certificate.)
To the Rights Agent:
The undersigned hereby irrevocably elects to exercise _______
Rights represented by this Right Certificate to purchase the Preferred Shares
(or other shares) issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name of:
Please insert social security or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
6
If such number of Rights shall not be all the Rights evidenced
by this Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to: Please insert
social security or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated: ,
----------- ----
__________________________________
Signature
Signature Guaranteed:
7
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 transfer 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
Corporation, with full power of substitution.
Dated: ____________, ____
____________________________________
Signature
Signature Guaranteed:
The undersigned hereby certifies that (1) the Rights evidenced
by this Right Certificate are not being sold, assigned or transferred by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement), (2) this
Rights Certificate is not being sold, assigned or transferred to or on behalf of
any such Acquiring Person, Affiliate or Associate and (3) after inquiry and to
the best knowledge of the undersigned, the undersigned did not acquire the
Rights evidenced by this Right Certificate from any Person who is or was an
Acquiring Person or an Affiliate or Associate thereof (as such terms are defined
in the Rights Agreement).
____________________________________
Signature
8
NOTICE
The signature on the foregoing Form of Election to Purchase or
Form of Assignment 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.
EXHIBIT C
RIGHTS BENEFICIALLY OWNED BY ANY ACQUIRING PERSONS AND CERTAIN TRANSFEREES
THEREOF ARE NULL AND VOID AND ARE NO LONGER TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
SERIES A PARTICIPATING CUMULATIVE PREFERRED STOCK
OF XXXXXX HOLDINGS, INC.
On [ ], 2001, the Board of Directors of XXXXXX HOLDINGS,
INC. (the "Company") declared a dividend of one Right for each outstanding
share of Common Stock, par value $0.01 per share, of the Company (the "Common
Shares"). The Rights will be issued to the holders of record of Common Shares
outstanding at [Date of Rights Agreement], 2001 (the "Record Date") and with
respect to Common Shares issued thereafter until the Distribution Date (as
defined below). Each Right, when it becomes exercisable as described below,
will entitle the registered holder to purchase from the Company one
one-thousandth (1/1,000th) of a share of Series A Participating Cumulative
Preferred Stock, par value $0.01 per share, of the Company (the "Preferred
Shares") at a price of $[ ].00 (the "Purchase Price"). The description and
terms of the Rights are set forth in a Rights Agreement dated as of [ ],
2001 as it may be amended from time to time (the "Rights Agreement"), between
the Company and Mellon Investor Services LLC, as Rights Agent (the "Rights
Agent").
2
Until the earlier of (i) such time as the Company learns that
a person or group (including any affiliate or associate of such person or group)
has acquired, or obtained the right to acquire, beneficial ownership of more
than 15% of the outstanding Common Shares (such person or group being called an
"Acquiring Person"), and (ii) such date, if any, as may be designated by the
Board of Directors of the Company following the commencement of, or first public
disclosure of an intention to commence, a tender or exchange offer for
outstanding Common Shares which could result in such person or group becoming
the beneficial owner of more than 15% of the outstanding Common Shares, (the
earlier of such dates being called the "Distribution Date"), the Rights will be
evidenced by certificates for Common Shares registered in the names of the
holders thereof (which certificates for Common Shares shall also be deemed to be
Right Certificates (as defined below)) and not by separate Right Certificates.
With respect to any certificate for Common Shares outstanding as of the Record
Date, until the Distribution Date, the Rights associated with the Common Shares
represented by such certificates shall be evidenced by such certificates along
with a copy of this Summary of Rights, and the surrender for transfer of any
such certificate shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby.
3
Therefore, until the Distribution Date, the Rights will be transferred with and
only with the Common Shares.
As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Right Certificates") will be
mailed to holders of record of the Common Shares as of the close of business on
the Distribution Date, and such separate Right Certificates alone will
thereafter evidence the Rights.
THE RIGHTS ARE NOT EXERCISABLE UNTIL THE DISTRIBUTION DATE
and will expire at [ ], 2011 (the "Expiration Date"), unless earlier
redeemed or exchanged by the Company as described below.
The number of Preferred Shares or other securities issuable
upon exercise of the Rights is subject to adjustment by the Board of Directors
of the Company in the event of any change in the Common Shares or Preferred
Shares, whether by reason of stock dividends, stock splits, recapitalizations,
reclassifications, mergers, consolidations, combinations or exchanges of
securities, split-ups, split-offs, spin-offs, liquidations, other similar
changes in capitalization, any distribution or issuance of assets, evidences of
indebtedness or subscription rights, options or warrants to holders of
4
Common Shares or Preferred Shares or otherwise. The Purchase Price and the
number of Preferred Shares or other securities issuable upon exercise of the
Rights are subject to adjustment from time to time in the event of the
declaration of a stock dividend on the Common Shares payable in Common Shares or
a subdivision or combination of the Common Shares prior to the Distribution
Date.
The Preferred Shares are authorized to be issued in
fractions which are an integral multiple of one one- thousandth (1/1,000th)
of a Preferred Share. The Company may, but (other than in the case of
fractions of Preferred Shares which are an integral multiple of one
one-thousandth (1/1,000th) of a Preferred Share) is not required to, issue
fractions of shares upon the exercise of Rights, and in lieu of such
fractional shares (other than one one-thousandths (1/1,000ths) of a Preferred
Share), the Company may make a cash payment based on the market price of such
shares on the first trading date prior to the date of exercise or utilize a
depositary arrangement as provided by the terms of the Preferred Shares.
Subject to the right of the Board of Directors of the Company
to redeem or exchange the Rights as described below, at such time as there is an
Acquiring Person, the holder of each Right will thereafter have the right to
receive, upon exercise thereof, for the Purchase Price, that number of one
one-thousandths of a Preferred Share equal to the number of Common Shares which
at the time of such
5
transaction would have a market value of twice the Purchase Price. Any Rights
that are or were beneficially owned by an Acquiring Person on or after the
Distribution Date will become null and void and will not be subject to the
"flip- in" provision.
In the event that after a person becomes an Acquiring Person
the Company is acquired in a merger or other business combination by a person
that is a publicly traded corporation or 50% or more of the Company's assets
or assets representing 50% or more of the Company's earning power are sold,
leased, exchanged or otherwise transferred (in one or more transactions) to a
person that is a publicly traded corporation, proper provision must be made
so that each Right will entitle its holder to purchase, for the Purchase
Price, that number of common shares of such corporation which at the time of
the transaction would have a market value of twice the Purchase Price. In the
event that after a person becomes an Acquiring Person, the Company is
acquired in a merger or other business combination by a person that is not a
publicly traded entity or 50% or more of the Company's assets or assets
representing 50% or more of the earning power of the Company are sold,
leased, exchanged or otherwise transferred (in one or more transactions) to a
person that is not a publicly traded entity, proper provision must be made so
that each Right will entitle its holder to purchase, for the Purchase
6
Price, at such holder's option, (i) that number of shares of the surviving
corporation in the transaction with such entity (or, at such holder's option, of
the surviving corporation in such acquisition, which could be the Company) which
at the time of the transaction would have a book value of twice the Purchase
Price or (ii) that number of shares of such entity which at the time of the
transaction would have a book value of twice the Purchase Price or (iii) if such
entity has an affiliate which has publicly traded common shares, that number of
common shares of such affiliate which at the time of the transaction would have
a market value of twice the Purchase Price.
ANY RIGHTS THAT ARE OR WERE, AT ANY TIME ON OR AFTER THE
DATE AN ACQUIRING PERSON BECOMES SUCH, BENEFICIALLY OWNED BY AN ACQUIRING
PERSON (OR CERTAIN TRANSFEREES THEREOF) WILL BECOME NULL AND VOID AND ANY
HOLDER OF ANY SUCH RIGHT (INCLUDING CERTAIN TRANSFEREES THEREOF) WILL BE
UNABLE TO EXERCISE OR TRANSFER ANY SUCH RIGHT.
The Rights are redeemable by the Board of Directors at a
redemption price of $.01 per Right (the "Redemption Price") any time prior to
the earlier of
7
(i) such time as there is an Acquiring Person and (ii) the Expiration Date.
Immediately upon the effectiveness of the action of the Board electing to
redeem the Rights, and without any further action and without any notice, the
right to exercise the Rights will terminate and the only right of the holders
of Rights will be to receive the Redemption Price.
After there is an Acquiring Person the Board of Directors may
elect to exchange each Right (other than Rights owned by an Acquiring Person)
for consideration per Right consisting of one-half of the securities that would
be issuable at such time upon the exercise of one Right pursuant to the terms of
the Rights Agreement. Notwithstanding the foregoing, the Board of Directors of
the Company shall not be empowered to effect such exchange at any time after any
person (other than 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 any such plan), together with all
Affiliates and Associates of such person, becomes the Beneficial Owner of 50% or
more of the Common Shares then outstanding.
At any time prior to such time as there shall be an Acquiring
Person, the Company may, without the approval of any holder of the Rights,
supplement or amend any
8
provision of the Rights Agreement (including the date on which the Expiration
Date or the Distribution Date shall occur, the amount of the Purchase Price or
the definition of "Acquiring Person"), except that no supplement or amendment
shall be made that reduces the Redemption Price of the Rights.
Until a Right is exercised, the holder thereof, as such, will
have no rights as a stockholder of the Company, including, without limitation,
the right to vote or to receive dividends.
A copy of the Rights Agreement, including the terms of the
Preferred Shares, will be filed with the Securities and Exchange Commission as
an Exhibit to a Registration Statement on Form 10. A copy of the Rights
Agreement is available free of charge from the Company upon written request.
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 reference.
