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EXHIBIT 4
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INTERVOICE-BRITE, INC.
AND
COMPUTERSHARE INVESTOR SERVICES, LLC
RIGHTS AGENT
THIRD AMENDED AND RESTATED RIGHTS AGREEMENT
DATED AS OF MAY 1, 2001
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions.............................................................................1
Section 2. Appointment of Rights Agent.....................................................................3
Section 3. Issue of Right Certificates.....................................................................4
Section 4. Form of Right Certificates......................................................................5
Section 5 Countersignature and Registration...............................................................5
Section 6. Transfer, Split-up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right Certificates.........................................5
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights...................................6
Section 8. Cancellation and Destruction of Right Certificates..............................................7
Section 9. Reservation and Availability of Capital Stock...................................................7
Section 10. Preferred Shares Record Date....................................................................8
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights.....................8
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.....................................13
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...........................13
Section 14. Fractional Rights and Fractional Shares........................................................14
Section 15. Rights of Action...............................................................................15
Section 16. Agreement of Right Holders.....................................................................15
Section 17. Right Certificate Holder Not Deemed a Stockholder..............................................16
Section 18. Concerning the Rights Agent....................................................................16
Section 19. Merger or Consolidation or Change of Name of Rights Agent......................................16
Section 20. Duties of Rights Agent.........................................................................17
Section 21. Change of Rights Agent.........................................................................18
Section 22. Issuance of New Right Certificates.............................................................19
Section 23. Redemption.....................................................................................19
Section 24. Exchange.......................................................................................20
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Section 25. Notice of Certain Events.......................................................................20
Section 26. Notices........................................................................................21
Section 27. Supplements and Amendments.....................................................................21
Section 28. Successors.....................................................................................22
Section 29. Benefits of this Agreement.....................................................................22
Section 30. Severability...................................................................................22
Section 31. GOVERNING LAW..................................................................................22
Section 32. Counterparts...................................................................................22
Section 33. Descriptive Headings...........................................................................22
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Exhibit A -- Form of Right Certificate
Exhibit B -- Summary of Rights to Purchase Preferred Shares
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THIRD AMENDED AND RESTATED RIGHTS AGREEMENT
Third Amended and Restated Rights Agreement, dated as of May 1, 2001
(this "Agreement"), between InterVoice-Brite, Inc., a Texas corporation (the
"Company"), and Computershare Investor Services, LLC, a Delaware limited
liability company (the "Rights Agent").
WITNESSETH:
WHEREAS, the Board of Directors of the Company has authorized and
declared a dividend of one preferred share purchase right (a "Right") for each
Common Share (as hereinafter defined) of the Company outstanding on May 10, 1991
(the "Record Date"), each Right representing the right to purchase one
eight-hundredths of a Preferred Share (as hereinafter defined), upon the terms
and subject to the conditions herein set forth, and has further authorized and
directed the issuance of one Right with respect to each Common Share that shall
become outstanding between the Record Date and the earliest of the Distribution
Date, the Redemption Date and the Final Expiration Date (as such terms are
hereinafter defined); and
WHEREAS, the Company and NCNB Texas National Bank, as Rights Agent,
entered into that certain Rights Agreement dated as of April 23, 1991 (the
"Original Rights Agreement") and the Company and Society National Bank, as
successor Rights Agent, entered into that certain Amended and Restated Rights
Agreement dated as of December 12, 1994 (the "Amended Rights Agreement") and the
Company and Xxxxxx Trust and Savings Bank entered into that certain Second
Amended and Restated Rights Agreement dated as of October 30, 1999; and
WHEREAS, pursuant to Section 19 of the Amended Rights Agreement,
KeyCorp Shareholder Services ("KeyCorp"), as successor-in-interest to Society
National Bank, became successor Rights Agent under the Amended Rights Agreement;
and
WHEREAS, pursuant to Sections 21 and 28 of the Amended Rights
Agreement, the Company removed KeyCorp as successor Rights Agent under the
Amended Rights Agreement, and appointed Xxxxxx Trust and Savings Bank to serve
as successor Rights Agent under the Second Amended and Restated Rights
Agreement; and
WHEREAS, pursuant to Sections 21 and 28 of the Amended Rights
Agreement, the Company removed Xxxxxx Trust and Savings Bank as successor Rights
Agent under the Second Amended and Restated Rights Agreement, and appointed
Computershare Investor Services, LLC to serve as successor Rights Agent under
the Third Amended Rights Agreement; and
WHEREAS, the Company desires to amend and restate the Amended Rights
Agreement to reflect the appointment of Computershare Investor Services, LLC as
successor Rights Agent and to extend the Final Expiration Date to May 10, 2011
and in the other respects set forth in this Agreement.
WHEREAS, effective as of the date of this Agreement, the Company
desires and directs the Rights Agent to amend and restate the Amended Rights
Agreement in its entirety pursuant to Section 27 of the Amended Rights Agreement
in the manner set forth in this Agreement; and
WHEREAS, as of the date of this Agreement, no Person (as such term is
hereinafter defined) had become an Acquiring Person (as such term is hereinafter
defined);
NOW THEREFORE, in consideration of the premises and of the mutual
agreements, provisions and covenants herein contained and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereby agree to amend and restate the Amended Rights
Agreement in its entirety as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
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(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates (as such terms are
hereinafter defined) of such Person, shall be the Beneficial Owner (as
such term is hereinafter defined) of 20% or more of the Common Shares
of the Company then outstanding, but shall not include the Company, any
Subsidiary (as such term is hereinafter defined) of the Company, any
employee benefit plan of the Company or any Subsidiary of the Company,
or any entity holding Common Shares for or pursuant to the terms of any
such plan. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common Shares by
the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares beneficially owned by such
Person to 20% or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 20% or more of the Common Shares of the Company
then outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company, become the Beneficial Owner
of any additional Common Shares of the Company, then such Person shall
be deemed to be an "Acquiring Person". Notwithstanding the foregoing,
if the Board of Directors of the Company, within ten (10) days after
the first date on which the Company shall become aware that any Person,
together with Affiliates and Associates of such Person, is the
Beneficial Owner of Common Shares of the Company such that such Person
(but for this sentence) would be an Acquiring Person, determines in
good faith that such Person has inadvertently exceeded the thresholds
set forth in this definition of Acquiring Person, and such Person
divests as promptly as practicable a sufficient number of Common Shares
of the Company so that such Person would no longer be an Acquiring
Person, as defined pursuant to the foregoing provisions of this
definition, then such Person shall not be deemed to be an Acquiring
Person for any purposes of this Agreement.
(b) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or
indirectly;
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether
such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (other than customary agreements with and
between underwriters and selling group members with respect to
a bona fide public offering of securities), or upon the
exercise of conversion rights, exchange rights, rights (other
than these Rights), warrants or options, or otherwise;
provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, securities
tendered pursuant to a tender or exchange offer made by or on
behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or
to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation made
pursuant to, and in accordance with, the applicable rules and
regulations promulgated under the Exchange Act and (2) is not
also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with
respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent
contemplated by the proviso to Section 1(c)(ii)(B)) or
disposing of any securities of the Company.
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Notwithstanding anything in this definition of Beneficial
Ownership to the contrary, the phrase "then outstanding", when used
with reference to a Person's Beneficial Ownership of securities of the
Company, shall mean the number of such securities then issued and
outstanding together with the number of such securities not then
actually issued and outstanding which such Person would be deemed to
own beneficially hereunder.
(d) "Business day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of Texas or
the State of Delaware are authorized or obligated by law or executive
order to close.
(e) "Close of business" on any given date shall mean 5:00
P.M., Dallas, Texas time, on such date; provided, however, that if such
date is not a Business Day it shall mean 5:00 P.M., Dallas, Texas time,
on the next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company
shall mean the shares of common stock, no par value, of the Company.
"Common Shares" when used with reference to any Person other than the
Company shall mean the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other Person is
a Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in
Section 3 hereof.
(h) "Final Expiration Date" shall have the meaning set forth
in Section 7 hereof.
(i) "Flip-In Event" shall have the meaning set forth in
Section 11(a)(ii) hereof.
(j) "Flip-Over Event" shall have the meaning set forth in
Section 13(a) hereof.
(k) "Person" shall mean any individual, firm, corporation or
other entity, and shall include any successor (by merger or otherwise)
of such entity.
(l) "Preferred Shares" shall mean shares of Series A Preferred
Stock, par value $100 per share, of the Company having the rights and
preferences set forth in the Form of Statement of Resolution
Establishing and Designating Series A Preferred Stock, $100 Par Value
filed with the Secretary of State of the State of Texas as a part of
the Company's Articles of Incorporation, as amended.
(m) "Redemption Date" shall have the meaning set forth in
Section 7 hereof.
(n) "Shares Acquisition Date" shall mean the first date of
public announcement by the Company or an Acquiring Person that an
Acquiring Person has become such.
(o) "Subsidiary" of any Person shall mean any corporation or
other entity of which a majority of the voting power of the voting
equity securities or equity interest is owned, directly or indirectly,
by such Person.
(p) "Triggering Event" shall mean any Flip-In Event or any
Flip-Over Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall, 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 such co-Rights Agents as it may deem necessary or
desirable.
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Section 3. Issue of Right Certificates.
(a) Until the earlier of (i) the close of business on the
tenth day after the Shares Acquisition Date or (ii) the close of
business on the tenth business day (or such later date as may be
determined by action of the Board of Directors prior to such time as
any person becomes an Acquiring Person) after the date of the
commencement by any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company or any entity holding Common Shares for or
pursuant to the terms of any such plan) of, or of the first public
announcement of the intention of any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company
or of any Subsidiary of the Company or any entity holding Common Shares
for or pursuant to the terms of any such plan) to commence, a tender or
exchange offer the consummation of which would result in any Person
becoming the Beneficial Owner of Common Shares aggregating 20% or more
of the then outstanding Common Shares (including any such date which is
after the date of this Agreement and prior to the issuance of the
Rights; the earlier of such dates being herein referred to as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common
Shares registered in the names of the holders thereof (which
certificates shall also be deemed to be Right Certificates) and not by
separate Right Certificates, and (y) the right to receive Right
Certificates will be transferable only in connection with the transfer
of Common Shares. As soon as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will
countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested and at the expense of the Company,
send) by first-class, insured, postage-prepaid mail, to each record
holder of Common Shares as of the close of business on the Distribution
Date, at the address of such holder shown on the records of the
Company, a Right Certificate, in substantially the form of Exhibit A
hereto (a "Right Certificate"), evidencing one Right for each Common
Share so held. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter,
the Company will send a copy of a Summary of Rights to Purchase
Preferred Shares, in substantially the form of Exhibit B hereto (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 certificates for Common Shares outstanding as
of the Record Date, until the Distribution Date, the Rights will be
evidenced by such certificates registered in the names of the holders
thereof. Until the Distribution Date (or the earlier of the Redemption
Date or the Final Expiration Date), the surrender for transfer of any
certificate for Common Shares outstanding on the Record Date shall also
constitute the transfer of the Rights associated with the Common Shares
represented thereby.
(c) Certificates for Common Shares which become outstanding
(including, without limitation, reacquired Common Shares referred to in
the last sentence of this paragraph (c)) after May 1, 2001 but prior to
the earliest of the Distribution Date, the Redemption Date or the Final
Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legends:
This certificate also evidences and entitles the holder hereof
to certain rights as set forth in a Third Amended and Restated
Rights Agreement between InterVoice-Brite, Inc. and
Computershare Investor Services, LLC, as Rights Agent, dated
as of May 1, 2001 (the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and a copy of
which is on file at the principal executive offices of
InterVoice-Brite, Inc. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be evidenced
by separate certificates and will no longer be evidenced by
this certificate. InterVoice-Brite, Inc. will mail to the
holder of this certificate a copy of the Rights Agreement
without charge after receipt of a written request therefor.
Under certain circumstances, as set forth in the Rights
Agreement, Rights issued to any Person who becomes an
Acquiring Person (as defined in the Rights Agreement) may
become null and void.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Shares represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for
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transfer of any such certificate shall also constitute the transfer of the
Rights associated with the Common Shares represented thereby. In the event that
the Company purchases or acquires any Common Shares after the Record Date but
prior to the Distribution Date, any Rights associated with such Common Shares
shall be deemed cancelled 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
forms of election to purchase Preferred Shares and of assignment to be printed
on the reverse thereof) shall be substantially the same as Exhibit B hereto and
may have such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and as are
not inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange on which the Rights
may from time to time be listed, or to conform to usage. Subject to the
provisions of Section 11 and Section 22 hereof, the Right Certificates shall
entitle the holders thereof to purchase such number of one eight-hundredths of a
Preferred Share as shall be set forth therein at the price per one eight-
hundredths of a Preferred Share set forth therein (the "Purchase Price"), but
the number of such one eight-hundredths of a Preferred Share and the Purchase
Price shall be subject to adjustment as provided herein.
Section 5. Countersignature and Registration.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its
President or any of its Vice Presidents, or its Treasurer, either
manually or by facsimile signature, shall have affixed thereto the
Company's seal or a facsimile thereof, and shall be attested by the
Secretary or an Assistant Secretary of the Company, either manually or
by facsimile signature. The Right Certificates shall be manually
countersigned or by facsimile signature by the Rights Agent and shall
not be valid for any purpose unless countersigned. In case any officer
of the Company who shall have signed any of the Right Certificates
shall cease to be such officer of the Company before countersignature
by the Rights Agent and issuance and delivery by the Company, such
Right Certificates, nevertheless, may be countersigned by the Rights
Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company; and any Right Certificate may
be signed on behalf of the Company by any person who, at the actual
date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the
date of the execution of this Rights Agreement any such person was not
such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its principal office, books for
registration and transfer of the Right Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders
of the Right Certificates, the number of Rights evidenced on its face
by each of the Right Certificates and the date of each of the Right
Certificates.
Section 6. Transfer, Split-up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
(a) Subject to the provisions of Section 14 hereof, at any
time after the close of business on the Distribution Date, and at or
prior to the close of business on the earlier of the Redemption Date or
the Final Expiration Date, any Right Certificate or Right Certificates
(other than Right Certificates representing Rights that have become
void pursuant to Section 11(a)(ii) hereof or that have been exchanged
pursuant to Section 24 hereof) may be transferred, split-up, combined
or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of one
eight-hundredths of a Preferred Share (or, following a Flip- In Event,
Common Shares, other securities, cash or other assets, as the case may
be) as the Right Certificate or Right Certificates entitled such holder
to purchase. Any registered holder desiring to transfer, split-up,
combine or exchange any Right Certificate or Right Certificates 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 or
offices of the Rights Agent designated for such purpose. Thereupon the
Rights Agent shall, subject to Section 14 hereof, countersign and
deliver to the person entitled thereto a Right
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Certificate or Right Certificates, as the case may be, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any
transfer, split-up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory
to them, and, 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 cancellation of the Right
Certificate if mutilated, the Company will execute and deliver a new
Right Certificate of like tenor to the Rights Agent for delivery to the
registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
(a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise provided
herein) in whole or in part at any time after the Distribution Date
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 or offices of the Rights Agent designated for
such purpose, together with payment of the Purchase Price for each one
eight-hundredths of a Preferred Share (or other securities, cash or
other assets, as the case may be) as to which the Rights are exercised,
at or prior to the earliest of (i) the close of business on May 10,
2011 (the "Final Expiration Date"), (ii) the time at which the Rights
are redeemed as provided in Section 23 hereof (the "Redemption Date"),
or (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof.
(b) The Purchase Price for each one eight-hundredths of a
Preferred Share (or other securities, cash or other assets, as the case
may be) purchasable pursuant to the exercise of a Right shall initially
be $37.50, and shall be subject to adjustment from time to time as
provided in Section 11 or 13 hereof and shall be payable in lawful
money of the United States of America in accordance with paragraph (c)
below.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect to each
Right so exercised of the Purchase Price per one eight-hundredths of a
Preferred Share (or other securities, cash or other assets, as the case
may be) to be purchased and an amount equal to any applicable transfer
tax required to be paid by the holder of such Right Certificate in
accordance with Section 10 hereof by certified check, cashier's cheek
or money order payable to the order of the Company, the Rights Agent
shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Shares (or make available, if the Rights Agent is a
transfer agent for such shares) 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)
requisition from the depositary agent depositary receipts representing
such number of one eight-hundredths of a Preferred Share as are to be
purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent
with the depositary agent), and the Company hereby directs the
depositary agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of
issuance of fractional shares in accordance with Section 14 hereof,
(iii) 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,
deliver such cash to or upon the order of the registered holder of such
Right Certificate. In the event that the Company is obligated to issue
other securities (including stock of the Company), the Common Shares of
the Company, pay cash and/or distribute other property pursuant to
Section 11(a) hereof, the Company will make all arrangements necessary
so that such other securities, cash and/or other property are available
for distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Right Certificate
shall exercise less than all the Rights evidenced thereby, a new Right
Certificate evidencing Rights equivalent to the Rights remaining
unexercised shall be issued
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by the Rights Agent to the registered holder of such Right Certificate
or to his duly authorized assigns, subject to the provisions of Section
14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated
to undertake any action with respect to a registered holder of any
Rights Certificate upon the occurrence of any purported exercise
thereof unless the 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 Rights Certificate surrendered for
the exercise and (ii) provided the additional evidence of the identity
of the Beneficial Owner (or former or proposed Beneficial Owner) or
Affiliates thereof as the Company shall reasonably request.
(f) 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 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 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. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificates purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in either
such case shall deliver a certificate of destruction thereof or a certificate of
cancellation thereof, as may be appropriate, to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued
Preferred Shares (and, following the occurrence of a Triggering Event,
out of its authorized and unissued Common Shares and/or other
securities or out of its authorized and issued shares held in its
treasury), the number of Preferred Shares (and following the occurrence
of a Triggering Event, Common Shares and/or other securities) that, as
provided in this Agreement including Section 11(a)(iii) hereof, will be
sufficient to permit the exercise in full of all outstanding Rights.
(b) So long as the Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or securities)
issuable and deliverable upon the exercise of the Rights may be listed
on any national securities exchange or inter-dealer quotation system of
a registered national securities association on which the Preferred
Shares may from time to time be listed, traded or quoted, the Company
shall use reasonable efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to be
listed on such exchange or quotation system upon official notice of
issuance upon such exercise.
(c) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one eight-hundredths
of a Preferred Share (and, following the occurrence of a Triggering
Event, Common Shares and/or other securities) delivered upon exercise
of Rights shall, at the time of delivery of the certificates
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for such shares (subject to payment of the Purchase Price), be duly and
validly authorized and issued and fully paid and nonassessable.
(d) In the event that there shall not be sufficient Preferred
Shares issued but not outstanding or authorized but unissued to permit
the exercise of Rights in accordance with Section 11 hereof, as the
case may be, the Company covenants and agrees that it will take all
such action as may be necessary to authorize additional Preferred
Shares for issuance upon the exercise of Rights pursuant to Section 11
hereof, as the case may be; provided, however, that if the Company is
unable to cause the authorization of additional Preferred Shares, then
the Company shall, or 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 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 equity securities having a value equal to the
value of the Preferred Shares that otherwise would have been issuable
pursuant to Section 11 hereof, 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 hereof, 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 a 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.
Section 10. Preferred Shares Record Date. Each person in whose name any
certificate for Preferred Shares (or Common Shares and/or other securities, as
the case may be) is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the Preferred Shares (or Common
Shares and/or other securities, as the case may be) represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Shares (or
Common Shares and/or other securities, as the case may be) transfer books of the
Company are closed, such person shall be deemed to have become the record holder
of such shares on, and such certificate shall be dated, the next succeeding
Business Day on which the Preferred Shares (or Common Shares and/or other
securities, as the case may be) transfer books of the Company are open. Prior to
the exercise of the Rights evidenced thereby, the holder of a Right Certificate
shall not be entitled to any rights of a shareholder of Preferred Shares of the
Company with respect to shares for which the Rights shall be exercisable,
including, without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivide the outstanding Preferred
Shares, (C) combine the outstanding Preferred Shares into a smaller
number of Preferred Shares, or (D) issue any shares of its capital
stock in a reclassification of the Preferred Shares (including any such
reclassification in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation), except as
otherwise provided in this Section 11(a) hereof, the Purchase Price in
effect at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification,
and the number and kind of shares of capital stock issuable on such
date, shall be proportionately adjusted so that the holder of any Right
exercised
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after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of
Preferred Shares or shares of capital stock which, if such right had
been exercised immediately prior to such date and at a time when the
Preferred Shares transfer books of the Company were open, he would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification. If an event
occurs which would require an adjustment under both this Section
11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided for in
this Section 11(a)(i) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) (A) Subject to Section 24 of this Agreement and
the last sentence of Section 23(a) of this Agreement, in the event any
Person becomes an Acquiring Person (a "Flip-In Event"), each holder of
a Right shall thereafter have a right to receive, upon exercise thereof
at a price equal to the then current Purchase Price multiplied by the
number of one eight-hundredths of a Preferred Share for which a Right
is then exercisable, in accordance with the terms of this Agreement and
in lieu of Preferred Shares, such number of Common Shares of the
Company (such number of Common Shares to be referred to hereinafter as
the "Adjustment Shares") as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of one eight-
hundredths of a Preferred Share for which a Right is then exercisable
and dividing that product by (y) 50% of the then current per share
market price of the Company's Common Shares (determined pursuant to
Section 11(d) hereof) on the date of the occurrence of such event. In
the event that any Person shall become an Acquiring Person and the
Rights shall then be outstanding, the Company shall not take any action
which would eliminate or diminish the benefits intended to be afforded
by the Rights.
(B) From and after the occurrence of a Flip-In Event,
any Rights that are or were acquired or beneficially owned by any
Acquiring Person (or any Associate or Affiliate of such Acquiring
Person) shall be void and any holder of such Rights shall thereafter
have no right to exercise such Rights under any provision of this
Agreement. No Right Certificate shall be issued pursuant to Section 3
that represents Rights beneficially owned by an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof; no Right Certificate shall be issued at
any time upon the transfer of any Rights to an Acquiring Person whose
Rights would be void pursuant to the preceding sentence or any
Associate or Affiliate thereof or to any nominee of such Acquiring
Person, Associate or Affiliate; and any Right Certificate delivered to
the Rights Agent for transfer to an Acquiring Person whose Rights would
be void pursuant to the preceding sentence shall be cancelled.
(iii) In the event that the number of Common Shares
which is authorized by the Company's Articles of Incorporation but not
outstanding or not reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit the exercise in full
of the Rights in accordance with the foregoing subparagraph (ii) of
this Section 11(a), the Company shall, to the extent permitted by
applicable law and regulation: (A) determine the excess of (1) the
value of the Adjustment Shares issuable upon the exercise of a Right
(the "Current Value") over (2) the Purchase Price (such excess to be
referred to hereinafter as the "Spread"), and (B) with respect to each
Right, make adequate provision to substitute for the Adjustment Shares,
upon payment of the applicable Purchase Price, (1) cash, (2) a
reduction in the Purchase Price, (3) Common Shares or other equity
securities of the Company (including, without limitation, shares, or
units of shares, of preferred stock which the Board of Directors has
deemed to have the same value as the Common Shares (such shares of
preferred stock, "common share equivalents")), (4) debt securities of
the Company, (5) other assets or (6) any combination of the foregoing,
having an aggregate value equal to the Current Value, where such
aggregate value has been determined by the Board of Directors based
upon the advice of an investment banking firm selected by the Board of
Directors; provided, however, that if the Company shall not have made
adequate provisions to deliver value pursuant to clause (B) above
within 30 days following the first occurrence of a Flip-In Event (the
"Flip-In Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, Common Shares (to the extent
available) and then, if necessary, cash, which shares and/or cash have
an aggregate value equal to the Spread. If the Board of Directors
determines in good faith that it is likely that sufficient additional
Common Shares could be authorized for issuance upon exercise in full of
the Rights, the 30-day period set forth above may be extended to the
extent necessary, but not more than 90 days after the Flip-In Trigger
Date, in order that the Company may seek shareholder approval for
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the authorization of such additional shares (such period, as it may be
extended, the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the first and/or
second sentences of this Section 11(a)(iii), the Company (x) shall
provide that such action shall apply uniformly to all outstanding
Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate
form of distribution to be made pursuant to such first sentence and to
determine the value thereof. In the event of any such suspension, the
Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as
a public announcement at such time as the suspension is no longer in
effect. For purposes of this Section 11(a)(iii), the value of the
Common Shares shall be the current market price (as determined pursuant
to Section 11(d) hereof) per Common Share on the Flip-In Trigger Date
and the value of any common share equivalent shall be deemed to have
the same value as the Common Shares on such date.
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of Preferred
Shares entitling them (for a period expiring within 45 calendar days
after such record date) to subscribe for or purchase Preferred Shares
(or shares having the same rights, privileges and preferences as the
Preferred Shares ("equivalent preferred shares")) or securities
convertible into Preferred Shares or equivalent preferred shares at a
price per Preferred Share or equivalent preferred share (or having a
conversion price per share, if a security convertible into Preferred
Shares or equivalent preferred shares) less than the then current per
share market price of the Preferred Shares (as defined in Section
11(d)) on such record date, the Purchase Price to be in effect after
such record date shall be determined by multiplying the Purchase Price
in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of Preferred Shares outstanding
on such record date plus the number of Preferred Shares which the
aggregate offering price of the total number of Preferred Shares and/or
equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be
offered) would purchase at such current market price and the
denominator of which shall be the number of Preferred Shares
outstanding on such record date plus the number of additional Preferred
Shares and/or equivalent preferred shares to be offered for
subscription or purchase (or into which the convertible securities so
to be offered are initially convertible); provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock of
the Company issuable upon exercise of one Right. In case such
subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed
with the Rights Agent and shall be binding on the Rights Agent and the
holders of the Rights. Preferred Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed; and in the event that such
rights, options or warrants are not so issued, the Purchase Price shall
be adjusted to be the Purchase Price which would then be in effect if
such record date had not been fixed.
(c) In case the Company shall fix a record date for the making
of a distribution to all holders of the Preferred Shares (including any
such distribution made in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation) of
evidences of indebtedness or assets (other than a regular quarterly
cash dividend or a dividend payable in Preferred Shares) or
subscription rights or warrants (excluding those referred to in Section
11(b) hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of
which shall be the then current per share market price of the Preferred
Shares on such record date, less the fair market value (as determined
in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights
Agent) of the portion of the assets or evidences of indebtedness so to
be distributed or of such subscription rights or warrants applicable to
one Preferred Share and the denominator of which shall be such current
per share market price of the Preferred Shares; provided, however, that
in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the shares of capital
stock of the Company to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is
fixed; and in the event that
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such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii) hereof, the
"current per share market price" of any security (a "Security" for the
purpose of this Section 11(d)(i)) on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the
30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date, and for purposes of computations made
pursuant to Section 11(a)(iii) hereof, the "current per share market
price" of a Security on any date shall be deemed to be the average of
the daily closing prices per share of such Security for the ten
consecutive Trading Days immediately following such date; provided,
however, that in the event that the current per share market price of
the Security is determined during a period following the announcement
by the issuer of such Security of (A) a dividend or distribution on
such Security payable in shares of such Security or securities
convertible into shares of such Security (other than the Rights), or
(B) any subdivision, combination or reclassification of such Security,
and the ex-dividend date for such dividend or distribution, or the
record date for such subdivision, combination or reclassification shall
not have occurred prior to the commencement of the requisite thirty
(30) Trading Day or ten (10) Trading Day period, as set forth above,
then, and in each such case, the "current per share market price" shall
be properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported
in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock
Exchange or, if the Security is not listed or admitted to trading on
the New York Stock Exchange, the last quoted price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such
other system then in use, or, if on any such date the Security is not
quoted by any such organization, as reported in the principal
consolidated transaction reporting system on which the Security is
listed or admitted to trading or, if the Security is not listed or
admitted to trading on any national securities exchange, the average of
the closing bid and asked prices as furnished by a professional market
maker making a market in the Security selected by the Board of
Directors of the Company. The term "Trading Day" shall mean a day on
which the principal national securities exchange on which the Security
is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on
any national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder,
the "current per share market price" of the Preferred Shares shall be
determined in accordance with the method set forth in Section 11(d)(i).
If the Preferred Shares are not publicly traded, the "current per share
market price" of the Preferred Shares shall be conclusively deemed to
be the current per share market price of the Common Shares as
determined pursuant to Section 11(d)(i) (appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof), multiplied by eight hundred. If
neither the Common Shares nor the Preferred Shares are publicly held or
so listed or traded, "current per share market price" shall mean the
fair value per share as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for all
purposes. For all purposes of this Agreement, the "current per share
market price" of one eight-hundredths of a Preferred Share shall be
equal to the "current per share market price" of one Preferred Share
divided by eight hundred.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments which by reason
of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or
to the nearest one one-millionth of a Preferred Share or one
ten-thousandth of any other share or security, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the transaction which
requires such adjustment or (ii) the date of the expiration of the
right to exercise any Rights.
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(f) If as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other
than Preferred Shares, thereafter the number of such other shares so
receivable upon exercise of any Right shall be subject to adjustment
from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Shares
contained in Section 11(a) through (c), inclusive, and the provisions
of Sections 7, 9, 10 and 13 with respect to the Preferred Shares shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to
any adjustment made to the Purchase Price hereunder shall evidence the
right to purchase, at the adjusted Purchase Price, the number of one
eight- hundredths of a Preferred Share purchasable from time to time
hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price
as a result of the calculations made in Sections 11(b) and (c), each
Right outstanding immediately prior to the making of such adjustment
shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one eight-hundredths of a Preferred
Share (calculated to the nearest one one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one
eight-hundredths of a share covered by a Right immediately prior to
this adjustment by (y) the Purchase Price in effect immediately prior
to such adjustment of the Purchase Price, and (ii) dividing the product
so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in
substitution for any adjustment in the number of one eight-hundredths
of a Preferred Share purchasable upon the exercise of a Right. Each of
the Rights outstanding after such adjustment of the number of Rights
shall be exercisable for the number of one eight-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to
such adjustment. Each Right held of record prior to such adjustment of
the number of Rights shall become that number of Rights (calculated to
the nearest one ten-thousandth) obtained by dividing the Purchase Price
in effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to
be made. This record date may be the date on which the Purchase Price
is adjusted or any day thereafter, but, if the Right Certificates have
been issued, shall be at least 10 days later than the date of the
public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right
Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement
for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein and shall be registered in the names of the holders
of record of Right Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one eight-hundredths of a Preferred Share
issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase
Price and the number of one eight-hundredths of a Preferred Share which
were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one eight-hundredths of the then par
value, if any, of the Preferred Shares issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the
opinion of its counsel, be necessary in order that the
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Company may validly and legally issue fully paid and nonassessable
Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date
for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date of the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the Preferred Shares and other capital stock or
securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due
xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares or securities upon the occurrence of the
event requiring such adjustment.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions
in the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that it in its sole
discretion shall determine to be advisable in order that any (i)
consolidation or subdivision of the Preferred Shares, (ii) issuance
wholly for cash of any Preferred Shares at less than the current market
price, (iii) issuance wholly for cash of Preferred Shares or securities
which by their terms are convertible into or exchangeable for Preferred
Shares, (iv) stock dividends or (v) issuance of rights, options or
warrants referred to herein above in this Section 11, hereafter made by
the Company to holders of its Preferred Shares shall not be taxable to
such stockholders.
(n) Anything herein to the contrary notwithstanding, in the
event that at any time after the date of this Agreement and prior to
the Distribution Date, the Company shall (i) declare or pay any
dividend on the Common Shares payable in Common Shares or (ii) effect a
subdivision, combination or consolidation of the Common Shares (by
reclassification or otherwise than by payment of dividends in Common
Shares) into a greater or lesser number of Common Shares, then in any
such case (A) the number of one eight-hundredths of a Preferred Share
purchasable after such event upon proper exercise of each Right shall
be determined by multiplying the number of one eight-hundredths of a
Preferred Share so purchasable immediately prior to such event by a
fraction, the numerator of which is the number of Common Shares
outstanding immediately before such event and the denominator of which
is the number of Common Shares outstanding immediately after such
event, and (B) each Common Share outstanding immediately after such
event shall have issued with respect to it that number of Rights which
each Common Share outstanding immediately prior to such event had
issued with respect to it. The adjustments provided for in this Section
11(n) shall be made successively whenever such a dividend is declared
or paid or such a subdivision, combination or consolidation is
effected.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief statement of the facts accounting for such adjustment,
(b) file with the Rights Agent and with each transfer agent for the Common
Shares or the Preferred Shares a copy of such certificate and (c) mail a brief
summary thereof to each holder of a Right Certificate (or, if prior to the
Distribution Date, to each holder of a Certificate representing Common Shares)
in accordance with Section 25 hereof. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment therein contained and
shall not be obligated or responsible for calculating any adjustment nor shall
it be deemed to have knowledge of such adjustment unless and until it shall have
received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. In the event, directly or indirectly, at any time after a Person
has become an Acquiring Person (a) the Company shall consolidate with, or merge
with and into, any other Person other than a Subsidiary of the Company, (b) any
Person other than a Subsidiary of the Company shall consolidate with the
Company, or merge with and into the Company and the Company shall be the
continuing or surviving corporation of such merger and, in connection with such
merger, all or part of the Common Shares shall be changed into or exchanged for
stock or other securities of any other Person (or the Company) or cash or any
other property, or (c) the Company shall sell or otherwise transfer (or one or
more of its Subsidiaries shall sell or otherwise transfer), in one or more
transactions, assets or earning power aggregating 50% or more of the assets or
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earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person other than the Company or one or more of its wholly-owned
Subsidiaries (any such event described in clauses (a), (b) or (c) being referred
to herein as a "Flip-Over Event"), then, and in each such case, proper provision
shall be made so that (i) each holder of a Right (except as otherwise provided
herein) shall thereafter have the right to receive, upon the exercise thereof at
a price equal to the then current Purchase Price multiplied by the number of one
eight-hundredths of a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of Preferred Shares,
such number of Common Shares of such other Person (including the Company as
successor thereto or as the surviving corporation) as shall equal the result
obtained by (A) multiplying the then current Purchase Price by the number of one
eight-hundredths of a Preferred Share for which a Right is then exercisable and
dividing that product by (B) 50% of the then current per share market price of
the Common Shares of such other Person (determined pursuant to Section 11(d)
hereof) on the date of consummation of such consolidation, merger, sale or
transfer; (ii) the issuer of such Common Shares shall thereafter be liable for,
and shall assume, by virtue of such consolidation, merger, sale or transfer, all
the obligations and duties of the Company pursuant to this Agreement; (iii) the
term "Company" shall thereafter be deemed to refer to such issuer; and (iv) such
issuer shall take such steps (including, but not limited to, the reservation of
a sufficient number of its Common Shares in accordance with Section 9 hereof) in
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the Common Shares thereafter deliverable upon the exercise of
the Rights. The Company shall not consummate any such consolidation, merger,
sale or transfer unless prior thereto the Company and such issuer shall have
executed and delivered to the Rights Agent a supplemental agreement so
providing. The Company shall not enter into any transaction of the kind referred
to in this Section 13 if at the time of such transaction there are any rights,
warrants, instruments or securities outstanding or any agreements or
arrangements which, as a result of the consummation of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the
Rights. The provisions of this Section 13 shall similarly apply to successive
mergers or consolidations or sales or other transfers.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Right Certificates which evidence fractional
Rights. In lieu of such fractional Rights, there shall be paid 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
the purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be
the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights
are not listed or admitted to trading on the New York Stock Exchange,
the last quoted price or, if not so quoted, the average of the high bid
and low asked prices in the over-the-counter market, as reported by
NASDAQ or such other system then in use, or, if on any such date the
Rights are not quoted by any such organization, as reported in the
principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the principal national
securities exchange on which the Rights are listed or admitted to
trading or, if the Rights are not listed or admitted to trading on any
national securities exchange, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in
the Rights selected by the Board of Directors of the Company. If on any
such date no such market maker is making a market in the Rights, the
fair value of the Rights on such date as determined in good faith by
the Board of Directors of the Company shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of
one eight-hundredths of a Preferred Share) upon exercise of the Rights
or to distribute certificates which evidence fractional Preferred
Shares (other than fractions which are integral multiples of one
eight-hundredths of a Preferred Share). Fractions of Preferred Shares
in integral multiples of one eight-hundredths of a Preferred Share
may, at the election of the Company, be evidenced by depositary
receipts, pursuant to an appropriate agreement between the Company and
a depositary selected by it; provided, however, that such agreement
shall provide that the holders of such depositary receipts shall have
all the rights, privileges
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and preferences to which they are entitled as beneficial owners of the
Preferred Shares represented by such depositary receipts. In lieu of
fractional Preferred Shares that are not integral multiples of one
eight-hundredths of a Preferred Share, the Company shall 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. For the
purposes of this Section 14(b), the current market value of a Preferred
Share shall be the closing price of a Preferred Share (as determined
pursuant to the second sentence of Section 11(d)(ii) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Company shall not be required to issue fractions of Common Shares upon
exercise of the Rights or to distribute certificates which evidence
fractional Common Shares. In lieu of fractional Common Shares the
Company may 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 Common
Share. For purposes of this Section 14(c), the current market value of
one Common Share shall be the closing price of one Common Share (as
determined pursuant to Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Right
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Shares); and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Shares), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Right Certificate in the manner provided
in such Right Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and will be entitled to specific performance of
the obligations hereunder, and injunctive relief against actual or threatened
violations of the obligations of any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office of the Rights Agent, duly endorsed
or accompanied by a proper instrument of transfer and with the
appropriate forms and certificates fully executed;
(c) the Company and the Rights Agent may deem and treat the
person in whose name the Right Certificate (or, prior to the
Distribution Date, the associated Common 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 Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent, shall be
affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any
liability to any holder of a Right or other person as a result of its
inability to perform any of its obligations under this Agreement by
reason of any preliminary or permanent injunction or other order,
decree or ruling issued by a court of competent jurisdiction or by a
governmental, regulatory or emissary of
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19
agency or commission or any statute, rule, regulation or executive
order promulgated or enacted by any governmental authority, prohibiting
or otherwise restraining performance of such obligations; provided,
however, that the Company must use reasonable efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the Preferred Shares or any
other securities of the Company which may at any time be issuable 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 or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, until the Right or Rights evidenced by
such Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its
duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability or expense,
incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration of
this Agreement, including the costs and expenses of defending against
any claim of liability in the premises. The costs and expenses of
enforcing this right of indemnification shall also be paid by the
Company. The indemnification provided for hereunder shall survive the
expiration of the Rights and termination of this Agreement.
(b) The Rights Agent may conclusively rely on and 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 Agreement in reliance upon any Right Certificate or certificate
for the Preferred Shares or 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, or otherwise upon the
advice of counsel as set forth in Section 20 hereof.
(c) Notwithstanding anything in this Agreement to the
contrary, in no event shall the Rights Agent be liable for special,
indirect or consequential loss or damage of any kind whatsoever
(including but not limited to lost profits), even if the Rights Agent
has been advised of the likelihood of such loss or damage and
regardless of the form of the action.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent
shall be a party, or any corporation succeeding to the stock transfer
or corporate trust powers of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement
without the execution or filing of any paper or any further act on the
part of any of the parties hereto; provided, that such corporation
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any
of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and in case at that time any of the
Right Certificates shall not have been
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countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions (and no implied duties or obligations shall be read into this
Agreement against the Rights Agent), by all of which the Company and the holders
of Right Certificates, by their acceptance thereof, shall be bound:
(a) Before the Rights Agent acts or refrains from acting, the
Rights Agent may consult with legal counsel (who may be legal counsel
for the Company), and the opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that
any fact or matter be proved or established by the Company prior to
taking 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, the Chief
Executive Officer, the President, any Vice President, 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 Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company
and any other Person only for its own gross negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement
or in the Right Certificates (except its countersignature thereof) or
be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any 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
Agreement or in any Right Certificate; nor shall it be responsible for
any change in the exercisability of the Rights (including the Rights
becoming void pursuant to Section 11(a)(ii) hereof) or any adjustment
in the terms of the Rights (including the manner, method or amount
thereof) provided for in Section 3, 11, 13, 23 or 24, or the
ascertaining of the existence of facts that would require any such
change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after actual notice that such change or
adjustment is required); 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 to be issued pursuant to this
Agreement or any Right Certificate or as to whether any Preferred
Shares will, when issued, be validly authorized and issued, fully paid
and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts, instruments
and assurances as may
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reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Secretary or
the Treasurer of the Company, and to apply to such officers for advice
or instructions in connection with its duties, and it shall not be
liable for any action taken or suffered by it in good faith in
accordance with instructions of any such officer or for any delay in
acting while waiting for those instructions. Any application by the
Rights Agent for written instructions from the Company may, at the
option of the Rights Agent, set forth in writing any action proposed to
be taken or omitted by the Rights Agent under this Agreement and the
date on or after which such action shall be taken or such omission
shall be effective. The Rights Agent shall not be liable for any action
taken by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date
specified in such application (which date shall not be less than ten
Business Days after the date any officer of the Company actually
receives such application, unless any such officer shall have consented
in writing to an earlier date) unless, prior to taking any such action
(or the effective date in the case of an omission), the Rights Agent
shall have received written instructions in response to such
application subject to the proposed action or omission and/or
specifying the action to be taken or omitted.
(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 may be interested, or contract
with or lend money to the Company or otherwise act as fully and freely
as though it were not Rights Agent under this Agreement. Nothing herein
shall preclude the Rights Agent from acting in any other capacity for
the Company or for any other 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) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for
believing that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) The Rights Agent shall not be required to take notice or
be deemed to have any notice of any fact, event or determination
(including, without limitation, any dates or events defined in this
Agreement or the designation of any Person as an Acquiring Person,
Affiliate or Associate) under this Agreement unless and until the
Rights Agent shall be specifically notified in writing by the Company
of such fact, event or determination.
(l) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate attached to
the form of assignment or form of election to purchase, as the case may
be, has not been completed, the Rights Agent shall not take any further
action with respect to such requested exercise or transfer without
first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares or Preferred Shares by registered or certified mail, and,
at the expense of the Company, 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 or Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall
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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 his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be (a) a corporation, limited liability company or trust
company (or similar form of entity under the laws of any state of the United
States or a foreign jurisdiction) authorized to conduct business under the laws
of the United States or any state of the United States, which is authorized
under such laws to exercise corporate trust, fiduciary or stockholder services
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 $10,000,000 or (b) an Affiliate
controlled by an entity described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
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 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Right Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Right Certificates made in
accordance with the provisions of this Agreement.
Section 23. Redemption.
(a) The Board of Directors of the Company may, at its option,
at any time prior to such time as any Person becomes an Acquiring
Person, redeem all but not less than all the then outstanding Rights at
a redemption price of $.00125 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). The redemption 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. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be
exercisable pursuant to Section 11(a)(ii) prior to the expiration of
the Company's right of redemption hereunder.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights pursuant to paragraph
(a) of this Section 23, 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. The Company shall promptly give public notice of any
such redemption; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after such action of the Board of Directors
ordering the redemption of the Rights, the Company shall mail a notice
of redemption to all the holders of the then outstanding Rights 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. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state
the method by which the payment of the Redemption Price will be made.
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
other than that specifically set forth in this Section 23 or in Section
24 hereof, and other than in connection with the purchase of Common
Shares prior to the Distribution Date.
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Section 24. Exchange.
(a) The Board of Directors of the Company may, at its option,
at any time after any Person becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become void pursuant to the provisions of
Section 11(a)(ii) hereof) for Common Shares at an exchange ratio of one
Common Share per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of
Directors shall not be empowered to effect such exchange at any time
after any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or any such
Subsidiary, or any entity holding Common Shares for or pursuant to the
terms of 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.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to paragraph
(a) of this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the only
right thereafter of a holder of such Rights shall be to receive that
number of Common Shares equal to the number of such Rights held by such
holder multiplied by the Exchange Ratio. The Company shall promptly
give public notice of any such exchange; provided 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 of the holders of such Rights at their last addresses
as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the Common
Shares for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial
exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company,
at its option, may substitute Preferred Shares (or equivalent preferred
shares, as such term is defined in Section 11(b) hereof) for Common
Shares exchangeable for Rights, at the initial rate of one
eight-hundredths of a Preferred Share (or equivalent preferred share)
for each Common Share, as appropriately adjusted to reflect adjustments
in the voting rights of the Preferred Shares pursuant to the terms
thereof, so that the fraction of a Preferred Share delivered in lieu of
each Common Share shall have the same voting rights as one Common
Share.
(d) In the event that the number of Common or Preferred Shares
which are authorized by the Company's Articles of Incorporation but not
outstanding or reserved for issuance for purposes other than upon
exercise of the Rights is not sufficient to permit any exchange of
Rights as contemplated in accordance with this Section 24, the Company
may, at its option, take all such action as may be necessary to
authorize additional Common or Preferred Shares.
(e) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional
Common Shares. In lieu of such fractional Common Shares, the Company
shall 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 a whole Common Share. For the purposes of this
paragraph (e), the current market value of a whole Common Share shall
be the closing price of a Common Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or
to make any other distribution to the holders of its Preferred Shares
(other than a regular quarterly cash dividend), (ii) to offer to the
holders of its Preferred Shares rights or warrants to subscribe for or
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to purchase any additional Preferred Shares or shares of stock of any
class or any other securities, rights or options, (iii) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding Preferred Shares), (iv)
to effect any consolidation or merger into or with, or to effect any
sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50%
or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person, (v) to effect the
liquidation, dissolution or winding up of the Company, or (vi) to
declare or pay any dividend on the Common Shares payable in Common
Shares or to effect a subdivision, combination or consolidation of the
Common Shares (by reclassification or otherwise than by payment of
dividends in Common Shares), then, in such case, the Company shall give
to each holder of a Right Certificate, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the
record date for the purposes of such stock dividend, or distribution of
rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by
the holders of the Common Shares and/or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of
any action covered by clause (i) or (ii) above at least 10 days prior
to the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at
least 10 days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of the Common
Shares and/or Preferred Shares, whichever shall be the earlier.
(b) In case a Flip-In Event shall occur, then the Company
shall as soon as practicable thereafter give to each holder of a Right
Certificate, in accordance with Section 26 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)(ii) hereof.
Section 26. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Right Certificate
to or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) as follows:
InterVoice-Brite, Inc.
00000 Xxxxxxxxx Xxxxxxx
Xxxxxx, Xxxxx 00000
Attention: Corporate Secretary
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right Certificate to or on the Rights Agent shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another address
is filed in writing with the Company) as follows:
Computershare Investor Services, LLC
0 Xxxxx Xxxxxxx Xx.
Xxxxxxx Xxxxxxxx 00000
Attention: Xxxxxx Xxxxxxxxxx
Telephone: (000) 000-0000 EXT.4721
Facsimile: (000) 000-0000
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
Section 27. Supplements and Amendments. The Company may from time to
time supplement or amend this Agreement without the approval of any holders of
Right Certificates in order to cure any ambiguity, to correct or
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supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, or to make any other provisions with respect
to the Rights which the Company may deem necessary or desirable, any such
supplement or amendment to be evidenced by a writing signed by the Company and
the Rights Agent; provided, however, that from and after such time as any Person
becomes an Acquiring Person, this Agreement shall not be amended in any manner
which would adversely affect the interests of the holders of Rights. Without
limiting the foregoing, the Company may at any time prior to such time as any
Person becomes an Acquiring Person amend this Agreement to lower the thresholds
set forth in Sections 1(a) and 3(a) to not less than the greater of (i) the sum
of .001% and the largest percentage of the outstanding Common Shares then known
by the Company to be beneficially owned by any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or any
Subsidiary of the Company, or any entity holding Common Shares for or pursuant
to the terms of any such plan) and (ii) 10%. Upon the delivery of a certificate
from an appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27 and
duly authorized by the Board of Directors of the Company, the Rights Agent shall
execute such amendment or supplement; provided, however, that the Rights Agent
may, but shall not be obligated to, enter into any such supplement or amendment
that affects its own rights, duties or immunities under this Agreement.
Notwithstanding anything in this Agreement to the contrary, no supplement or
amendment that changes the rights and duties of the Rights Agent under this
Agreement will be effective against the Rights Agent without the execution of
such supplement or amendment by the Rights Agent.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equitable right, remedy
or claim under this Agreement; but this Agreement shall be for the sole and
exclusive benefit of the Company, the Rights Agent and the registered holders of
the Right Certificates (and, prior to the Distribution Date, the Common Shares).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
Section 31. GOVERNING LAW. THIS AGREEMENT AND EACH RIGHT CERTIFICATE
ISSUED HEREUNDER SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE
STATE OF TEXAS AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE AND
PERFORMED ENTIRELY WITHIN SUCH STATE.
Section 32. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
-22-
26
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
INTERVOICE-BRITE, INC.
Attest:
By: /s/ XXXXX XXXXXX By: /s/ XXX-XXX X. XXXXXX
--------------------------------- ---------------------------------
Title: Executive Secretary Title: Chief Financial Officer
--------------------------- ---------------------------
Name: Xxxxx Xxxxxx Name: Xxx-Xxx X. Xxxxxx
---------------------------- ----------------------------
COMPUTERSHARE INVESTOR SERVICES,
LLC, as Rights Agent
Attest:
By: /s/ XXXXXXX XXXX By: /s/ XXX X. XXXXXX
--------------------------------- ---------------------------------
Title: Relationship Manager Title: Client Services Manager
Name: Xxxxxxx Xxxx Name: Xxx X. Xxxxxx
-23-
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EXHIBIT A
Form of Right Certificate
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER MAY 10, 2011 OR EARLIER IF REDEMPTION OR EXCHANGE
OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $.00125 PER RIGHT AND
TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
Right Certificate
INTERVOICE-BRITE, 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 Third
Amended and Restated Rights Agreement, dated as of May 1, 2001 (the "Rights
Agreement"), between InterVoice-Brite, Inc., a Texas corporation (the
"Company"), and Computer Share Services, LLC, a Delaware limited liability
company, to purchase from the Company at any time after the Distribution Date
(as such term is defined in the Rights Agreement) and prior to 5:00 P.M.,
Dallas, Texas time, on May 10, 2011 at the principal office of the Rights Agent,
or at the office of its successor as Rights Agent, one eight-hundredths of a
fully paid non-assessable share of Series A Preferred Stock, par value $100 per
share (the "Preferred Shares"), of the Company, at a purchase price of $37.50
per one eight-hundredths of a Preferred Share (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one eight-hundredths of a Preferred Share which
may be purchased upon exercise hereof) set forth above, and the Purchase Price
set forth above, are the number and Purchase Price as of ___________, based on
the Preferred Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of one eight-hundredths of a
Preferred Share which may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon the
happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office or office of the Rights Agent designated for
such purpose, 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 of Preferred 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 Certificate (i) may be redeemed by the Company at a redemption price of
$.00125 per Right or (ii) may be exchanged in whole or in part for Preferred
Shares or shares of the Company's Common Stock, no par value.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one eight-hundredths of a Preferred Share, which may, at the
election of
A-1
28
the Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate 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 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 or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of ______________.
ATTEST: INTERVOICE-BRITE, INC.
By:
------------------------------------- ---------------------------------
Name: Name:
-------------------------------- ----------------------------
Title: Title:
------------------------------- ---------------------------
Countersigned:
COMPUTERSHARE INVESTOR SERVICES, LLC
as Rights Agent
By:
----------------------------------
Name:
-----------------------------
Title:
----------------------------
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29
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ____________________________________________ hereby
sells, assigns and transfers unto
________________________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
this Right Certificate, together with all right, title and interest therein, and
does hereby irrevocably constitute and appoint _______________________________
Attorney, to transfer the within Right Certificate on the books of the within-
named Company, with full power of substitution.
Dated:
-------------------------------
------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
--------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
------------------------------------
Signature
A-3
30
[Form of Reverse Side of Right Certificate -- continued]
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise Rights
represented by the Right Certificate.)
To INTERVOICE-BRITE, INC.
The undersigned hereby irrevocably elects to exercise
______________________ Rights represented by this Right Certificate to purchase
the Preferred Shares issuable upon the exercise of such Rights and requests that
certificates for such Preferred Shares be issued in the name of:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated:
--------------------------
------------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
--------------------------------------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not beneficially owned by an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement).
------------------------------------
Signature
--------------------------------------------------------------------------------
A-4
31
[Form of Reverse Side of Right Certificate -- continued]
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon the face
of this Right Certificate in every particular, without alteration or enlargement
or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is not
completed, the Company and the Rights Agent will deem the beneficial owner of
the Rights evidenced by this Right Certificate to be an Acquiring Person or an
Affiliate or Associate thereof (as defined in the Rights Agreement) and such
Assignment or Election to Purchase will not be honored.
A-5
32
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED SHARES
On April 23, 1991, the Board of Directors of InterVoice-Brite, Inc.
(the "Company") declared a dividend of one preferred share purchase right (a
"Right") for each outstanding share of common stock, no par value (the "Common
Shares"), of the Company. The dividend is payable on May 10, 1991 (the "Record
Date") to the stockholders of record on that date. Each Right entitles the
registered holder to purchase from the Company one eight-hundredths of a share
of Series A Preferred Stock, par value $100 per share (the "Preferred Shares"),
of the Company at a price of $37.50 per one eight-hundredths of a Preferred
Share (the "Purchase Price"), subject to adjustment. The description and terms
of the Rights are set forth in a Third Amended and Restated Rights Agreement
(the "Rights Agreement") between the Company and Computershare Investor
Services, LLC as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons (an
"Acquiring Person") have acquired beneficial ownership of 20% or more of the
outstanding Common Shares or (ii) 10 business days (or such later date as may be
determined by action of the Board of Directors prior to such time as any person
or group of affiliated persons becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer or
exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 20% or more of the outstanding Common Shares
(the earlier of such dates being called the "Distribution Date"), the Rights
will be evidenced, with respect to any of the Common Share certificates
outstanding as of the Record Date, by such Common Share certificate.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be transferred
with and only with the Common Shares. Until the Distribution Date (or earlier
redemption or expiration of the Rights), new Common Share certificates issued
after the Record Date upon transfer or new issuance of Common Shares will
contain a notation incorporating the Rights Agreement by reference. Until the
Distribution Date (or earlier redemption or expiration of the Rights), the
surrender for transfer of any certificates for Common Shares outstanding as of
the Record Date, even without such notation, will also constitute the transfer
of the Rights associated with the Common Shares represented by such certificate.
As soon as practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of record
of the Common Shares as of the close of business on the Distribution Date and
such separate Right Certificates alone will evidence the Rights.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on May 10, 2011 (the "Final Expiration Date"), unless the Final
Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by the Company, in each case, as described below.
The Purchase Price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Shares, (ii) upon the grant to holders of the Preferred Shares of certain rights
or warrants to subscribe for or purchase Preferred Shares at a price, or
securities convertible into Preferred Shares with a conversion price, less than
the then-current market price of the Preferred Shares or (iii) upon the
distribution to holders of the Preferred Shares of evidences of indebtedness or
assets (excluding regular periodic cash dividends paid out of earnings or
retained earnings or dividends payable in Preferred Shares) or of subscription
rights or warrants (other than those referred to above).
The number of outstanding Rights and the number of one eight-hundredths
of a Preferred Share issuable upon exercise of each Right are also subject to
adjustment in the event of a stock split of the Common Shares or a stock
dividend on the Common Shares payable in Common Shares or subdivisions,
consolidations or combinations of the Common Shares occurring, in any such case,
prior to the Distribution Date.
B-1
33
Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each Preferred Share will be entitled to receive a dividend payable
in cash, stock or otherwise when, as and if declared by the Board of Directors.
In the event of liquidation, the holders of the Preferred Shares will be
entitled to a minimum preferential liquidation payment of $100 per share but
will be entitled to an aggregate payment of eight hundred times the payment made
per Common Share. Each Preferred Share will have eight hundred votes, voting
together with the Common Shares. Finally, in the event of any merger,
consolidation or other transaction in which Common Shares are exchanged, each
Preferred Share will be entitled to receive eight hundred times the amount
received per Common Share. These rights are protected by customary antidilution
provisions.
Because of the nature of the Preferred Shares' dividend, liquidation
and voting rights, the value of one eight-hundredths interest in a Preferred
Share purchasable upon exercise of each Right should approximate the value of
one Common Share.
In the event that the Company is acquired in a merger or other business
combination transaction or 50% or more of its consolidated assets or earning
power are sold, proper provision will be made so that each holder of a Right
will thereafter have the right to receive, upon the exercise thereof at the then
current exercise price of the Right, that number of shares of common stock of
the acquiring company which at the time of such transaction will have a market
value of two times the exercise price of the Right. In the event that any person
or group of affiliated or associated persons becomes an Acquiring Person, proper
provision shall be made so that each holder of a Right, other than Rights
beneficially owned by the Acquiring Person (which will thereafter be void), will
thereafter have the right to receive upon exercise that number of Common Shares
(or, in certain circumstances, cash, property or other securities of the
Company) having a market value of two times the exercise price of the Right.
At any time after any Person becomes an Acquiring Person and prior to
the acquisition by such person or group of 50% or more of the outstanding Common
Shares, the Board of Directors of the Company may exchange the Rights (other
than Rights owned by such person or group which will have become void), in whole
or in part, at an exchange ratio of one Common Share, or one eight-hundredths of
a Preferred Share (or of a share of a class or series of the Company's preferred
stock having equivalent rights, preferences and privileges), per Right (subject
to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one eight-hundredths of a Preferred
Share, which may, at the election of the Company, be evidenced by depositary
receipts) and in lieu thereof, an adjustment in cash will be made based on the
market price of the Preferred Shares on the last trading day prior to the date
of exercise.
At any time prior to the acquisition by a person or group of affiliated
or associated persons of beneficial ownership of 20% or more of the outstanding
Common Shares, the Board of Directors of the Company may redeem the Rights in
whole, but not in part, at a price of $.00125 per Right (the "Redemption
Price"). The redemption of the Rights may be made effective at such time on such
basis with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price.
No fractional Preferred Shares will be issued (other than fractions
which are integral multiples of one eight-hundredths of a Preferred Share,
which may, at the election of the Company, be evidenced by depositary receipts)
and in lieu thereof, an adjustment in cash will be made based on the market
price of the Preferred Shares on the last trading day prior to the date of
exercise.
The terms of the Rights may be amended by the Board of Directors of the
Company without the consent of the holders of the Rights, including an amendment
to lower certain thresholds described above to not less than the greater of (i)
the sum of .001% and the largest percentage of the outstanding Common Shares
then known to the Company to be beneficially owned by any person or group of
affiliated or associated persons and (ii) 10%, except that from and after such
time as any person or group of affiliated or associated persons becomes an
Acquiring Person no such amendment may adversely affect the interests of the
holders of the Rights.
B-2
34
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 has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A/A
(Amendment No. 3) dated May 1, 2001. A copy of the Rights Agreement is available
free of charge from the Company. This summary description of the Rights does not
purport to be complete and is qualified in its entirety by reference to the
Rights Agreement, which is hereby incorporated herein by reference.
B-3
