RIGHTS AGREEMENT
Exhibit
4.2
This
Rights Agreement, dated as of June 4, 2008, between NATHAN'S FAMOUS, INC.,
a
Delaware corporation (the “Company”), and AMERICAN STOCK TRANSFER AND TRUST
COMPANY (the “Rights Agent”).
W
I T
N E S S E T H :
WHEREAS,
the Board of Directors of the Company has authorized and declared a dividend
distribution (the “Distribution”) of one common share purchase right (a “Right”)
for each outstanding share of the Common Stock (as hereinafter defined)
outstanding at the close of business on June 5, 2008 (the “Record Date”) and has
further authorized the issuance of one Right in respect of each share of Common
Stock of the Company issued between the Record Date and the earlier of the
Distribution Date, the Expiration Date or the Final Expiration Date (as such
terms are hereinafter defined), and under certain other circumstances, each
Right representing the right to purchase one share of Common Stock of the
Company upon the terms and subject to the conditions hereinafter set
forth.
NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein
set
forth, the parties hereby agree as follows:
SECTION
1. Certain
Definitions.
For
purposes of this Agreement, the following terms have the meanings
indicated:
(a) “Acquiring
Person” shall mean any Person (as such term is hereinafter defined) who or that,
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 15% or more of the shares of Common Stock then
outstanding. Notwithstanding the foregoing, (A) the term Acquiring Person
shall not include (i) the Company, (ii) any Subsidiary (as such term
is hereinafter defined) of the Company, (iii) any employee benefit or
compensation plan of the Company or any Subsidiary of the Company, or
(iv) any entity holding shares of Common Stock for or pursuant to the terms
of any such employee benefit or compensation plan of the Company or any
Subsidiary of the Company; and (B) no Person shall become an “Acquiring
Person” (i) as the result of an acquisition of shares of Common Stock by
the Company which, by reducing the number of shares of Common Stock issued
and
outstanding, increases the proportionate number of shares of Common Stock
beneficially owned by such Person to 15% or more of the shares of Common Stock
then outstanding; provided, however, that if a Person shall become the
Beneficial Owner of 15% or more of the shares of Common Stock then outstanding
by reason of share purchases by the Company and shall, following written notice
from, or public disclosure by the Company of such share purchases by the
Company, become the Beneficial Owner of any additional shares of Common Stock
without the prior consent of the Company and shall then Beneficially Own more
than 15% of the shares of Common Stock then outstanding, then such Person shall
be deemed to be an “Acquiring Person,” (ii) as the result of the
acquisition of shares of Common Stock directly from the Company in a private
transaction; provided, however, that if a Person shall become the Beneficial
Owner of 15% or more of the shares of Common Stock then outstanding by reason
of
share purchases or issuances directly from the Company in a private transaction
and shall, after that date, become Beneficial Owner of any additional shares
of
Common Stock without the prior written consent of the Company and shall then
Beneficially Own more than 15% of the shares of Common Stock then outstanding,
then such Person shall be deemed to be an “Acquiring Person,” (iii) as the
result of the acquisition of shares of Common Stock in a transaction approved
by
the Company or (iv) if the Board of Directors determines in good faith that
a Person who would otherwise be an “Acquiring Person,” as defined pursuant to
the foregoing provisions of this Section 1(a), has become such
inadvertently, and if requested by the Company such Person divests, as promptly
as practicable (as determined in good faith by the Board of Directors),
following receipt of written notice from the Company of such event, of
Beneficial Ownership of a sufficient number of shares of Common Stock so that
such Person would no longer be an Acquiring Person, as defined pursuant to
the
foregoing provisions of this Section 1(a), then such Person shall not be
deemed to be an “Acquiring Person” for any purposes of this Agreement; provided,
however, that if such Person shall subsequently acquire any additional shares
of
Common Stock and/or again become the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding, such Person shall be deemed an
“Acquiring Person,” subject to the exceptions set forth in this
Section 1(a).
(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”); provided,
however,
that
the limited partners of a limited partnership shall not be deemed to be
Associates of such limited partnership solely by virtue of their limited
partnership interests.
(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, is deemed to
beneficially own, directly or indirectly, within the meaning of Rule 13d-3
of the General Rules and Regulations under the Exchange Act;
(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 such Person's Affiliates or Associates until such tendered
securities are accepted for purchase of 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 of the Exchange Act,
and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or
any comparable or successor report); or
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(iii) that
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 (including
arrangements regarding the economic benefit of holding such securities) , voting
(except to the extent contemplated by the proviso to Section 1(c)(ii)(B))
or disposing of any securities of the Company.
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, Sunday, or a day on which banking
institutions in the State of New York 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., New York City time, on
such date; provided,
however,
that if
such date is not a Business Day it shall mean 5:00 P.M., New York City
time, on the next succeeding Business Day.
(f) “Common
Stock” when used with reference to the Company shall mean the Common Stock, $.01
par value, of the Company and 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 that ultimately control such
first-mentioned Person.
(g) “Common
Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii)
hereof.
(h) “Distribution
Date” shall have the meaning set forth in Section 3(a) hereof.
(i) “Expiration
Date” shall have the meaning set forth in Section 7(a) hereof.
(j) “Final
Expiration Date” shall have the meaning set forth in Section 7(a)
hereof.
(k) “Interested
Stockholder” shall mean any Acquiring Person or any Affiliate or Associate of an
Acquiring Person or any other Person in which any such Acquiring Person,
Affiliate or Associate has a controlling interest, or any other Person acting
directly or indirectly on behalf of or in concert with any such Acquiring
Person, Affiliate or Associate.
(l) “Person”
shall mean any individual, firm, corporation or other entity.
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(m) “Purchase
Price” shall have the meaning set forth in Section 7(b)
hereof.
(n) “Redemption
Date” shall have the meaning set forth in Section 7(a) hereof.
(o) “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;
provided,
however
that, if
such Person is determined not to have become an Acquiring Person pursuant to
Section l(a)(B)(iii) hereof, then no Shares Acquisition Date shall be
deemed to have occurred and; provided,
further,
that
for the purposes of this definition, a public announcement shall not include
any
report filed by the Company pursuant to the Exchange Act other than a filing
wherein the Company announces that an Acquiring Person has become
such.
(p) “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.
(q) “Triggering
Event” shall mean the occurrence of any event described in Section 11(a)(ii) or
Section 13(a).
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 Stock) 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.
SECTION
3. Issue
of Right Certificates.
(a) Until
the earlier of (i) the tenth day after the Shares Acquisition Date or
(ii) the tenth Business Day (or such later date as may be determined by
action of the Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement (determined in accordance
with Rule 14d-2 under the Exchange Act) 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 Person holding Common Stock for
or
pursuant to the terms of any such plan) or the date of an announcement of an
intention by any such Person to commence, a tender or exchange offer, the
consummation of which would result in a Person becoming an Acquiring Person
(including any such date that 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 “Distribution Date”), (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Stock
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 Rights (and the right to receive Right Certificates therefor) will
be transferable only in connection with the transfer of Common Stock. 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, send) by first-class, insured,
postage-prepaid mail to each record holder of Common Stock 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, substantially in the form of
Exhibit A hereto ( the “Right Certificate”), evidencing one Right for each share
of Common Stock so held. As of the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
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(b) On
the
Record Date or as soon as practicable thereafter, the Company will send a copy
of a Summary of Rights to Purchase Common Stock, in substantially the form
attached hereto as Exhibit B (the “Summary of Rights”), by first-class,
postage prepaid mail, to each record holder of the Common Stock as of the close
of business on the Record Date, at the address of such holder shown on the
records of the Company. In the event that the Company amends this Agreement
pursuant to the terms hereof, the effect of which amendment is to require the
amendment of the Summary of Rights, the Company will mail such amended Summary
of Rights to holders of record of Common Stock on the effective date of any
such
amendment. With respect to certificates for the Common Stock outstanding as
of
the Record Date, until the Distribution Date, the Rights will be evidenced
by
such certificates for the Common Stock registered in the names of the holders
of
the Common Stock. Until the Distribution Date (or earlier of the Redemption
Date
and the Final Expiration Date), the surrender for transfer of any of the
certificates for the Common Stock outstanding on the Record Date shall also
constitute the transfer of the Rights associated with the Common Stock
represented by such certificate.
(c) Rights
shall be issued in respect of all shares of Common Stock which are issued
(whether originally issued or from the Company’s treasury) after the Record Date
but prior to the earliest of the Distribution Date, the Redemption Date or
the
Final Expiration Date. Certificates representing such shares of Common Stock
shall also be deemed to be certificates for Rights and shall have impressed
on,
printed on, written on or otherwise affixed to them the following
legend:
This
certificate also evidences and entitles the holder hereof to certain Rights
as
set forth in a Rights Agreement, as amended, between NATHAN'S FAMOUS, INC.
and
AMERICAN STOCK TRANSFER AND TRUST COMPANY, Rights Agent, dated as of June 4,
2008 (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 NATHAN'S FAMOUS, 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. NATHAN'S FAMOUS, INC. will mail to
the
holder of this certificate a copy of the Rights Agreement (as in effect on
the
date of mailing) without charge promptly after receipt of a written request
therefor. Rights which are or were beneficially owned by Acquiring Persons
or
their Affiliates or Associates (as such terms are defined in the Rights
Agreement) and any subsequent holder of such Rights will be null and
void.
With
respect to such certificates containing the foregoing legend, until the
Distribution Date (or, if earlier, the earlier of the Redemption Date or the
Final Expiration Date), the Rights associated with the Common Stock represented
by such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any of such certificates shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificate. In the event that the Company purchases or acquires any Common
Stock after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Stock shall be deemed canceled and retired so that
the Company shall not be entitled to exercise any Rights associated with the
Common Stock that are no longer outstanding. Notwithstanding this Section 3(c),
the omission of a legend shall not affect the enforceability of any part of
this
Agreement or the rights of any holder of the Rights.
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SECTION
4. Form
of Right Certificates.
(a) The
Right Certificates (and the form of election to purchase shares and of
assignment to be printed on the reverse thereof) shall be substantially the
same
as Exhibit A 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 or 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 7, 11 and 22 hereof, the Right
Certificates, whenever issued, shall entitle the holders thereof to purchase
such number of shares of the Common Stock as shall be set forth therein at
the
Purchase Price (as defined in Section 7(b)), but the number of such shares
and the Purchase Price shall be subject to adjustment as provided
herein.
(b) Notwithstanding
any other provision of this Agreement, any Right Certificate issued pursuant
to
Section 3(a) or Section 22 hereof that represents Rights beneficially
owned by (i) an Acquiring Person or any Associate or Affiliate thereof,
(ii) on or after the Distribution Date by any Person who subsequently
becomes an Acquiring Person (or an Affiliate or Associate of an Acquiring
Person), (iii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such, or (iv) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee prior to or concurrently with
the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person
to holders of equity interests in such Acquiring Person or to any Person with
whom such Acquiring Person has any continuing agreement, arrangement or
understanding regarding the transferred Rights or (B) a transfer which the
Board of Directors of the Company has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect avoidance of
Section 7(e) hereof, and any Right Certificate issued at any time to any
nominee of such Acquiring Person, Associate or Affiliate, and any Right
Certificate issued pursuant to Section 6 or Section 11 upon transfer,
exchange, replacement or adjustment of any other Right Certificate referred
to
in this sentence, shall contain (to the extent feasible) the following
legend:
The
Rights represented by this Right Certificate are or were beneficially owned
by a
Person who was or became an Acquiring Person or an Affiliate or an Associate
of
an Acquiring Person (as such terms are defined in the Rights Agreement). This
Right Certificate and the Rights represented hereby are null and
void.
6
SECTION
5. Countersignature
and Registration.
(a) The Right Certificates shall be executed on behalf of the Company by
its Chairman of the Board, Chief Executive Officer, President, its Chief
Financial Officer or any of its Vice Presidents, either manually or by facsimile
signature, may have affixed thereto the Company’s seal and shall be attested by
the Secretary of the Company, either manually or by facsimile signature. The
Right Certificates shall be manually countersigned by the Rights Agent and
shall
not be valid for any purpose unless so countersigned. In case any officer of
the
Company who shall have signed any of the Right Certificates shall cease to
be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless,
may
be countersigned by the Rights Agent, issued and delivered with the same force
and effect as though the person who signed such Right Certificates had not
ceased to be such officer of the 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 one
of
its offices in New York, New York, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall show the names
and
addresses of the respective holders of the Right Certificates, the number of
Rights evidenced on its face by each of the Right Certificates and the date
of
each of the Right Certificates.
SECTION
6. Transfer,
Split Up, Combination and Exchange of Right Certificates; Mutilated, Destroyed,
Lost or Stolen Right Certificates.
(a) Subject to the provisions of Sections 4(b), 7(e) and 14 hereof, at
any time after the close of business on the Distribution Date, and at or prior
to the close of business on the Expiration Date, any Right Certificate or Right
Certificates 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 shares of Common Stock as the Right Certificate or
Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split-up, combine or exchange any Right
Certificate shall make such request in writing delivered to the Rights Agent,
and shall surrender the Right Certificate or Right Certificates to be
transferred, split up, combined or exchanged at the principal office of the
Rights Agent for such purpose. Neither the Rights Agent nor the Company shall
be
obligated to take any action whatsoever with respect to the transfer of any
such
surrendered Right Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Right Certificates and shall have provided such additional evidence
of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon, the Rights Agent shall, subject to Sections 4(b), 7(e) and 14
hereof, countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates.
(b) Upon
receipt by the Company and the Rights Agent of evidence reasonably satisfactory
to them of the loss, theft, destruction or mutilation of a Right Certificate,
and, in case of loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and reimbursement to the Company and the Rights Agent
of
all reasonable expenses incidental thereto, and upon surrender to the Rights
Agent and cancellation of the Right Certificate if mutilated, the Company will
make and deliver a new Right Certificate of like tenor to the Rights Agent
for
delivery to the registered owner of lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
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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 including, without
limitation, the restrictions set forth in Sections 7(e), 9(c), 11(a)(ii),
11(a)(iii) and 23(b)) in whole or in part at any time after the Distribution
Date upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights Agent at
the
principal office of the Rights Agent in New York, New York, together
with payment of the Purchase Price for each share of Common Stock as to which
the Rights are exercised, at or prior to the close of business on the earlier
of
(i) June 5, 2013 (the “Final Expiration Date”), or (ii) the date on
which the Rights are redeemed as provided in Section 23 (the “Redemption
Date”); or (iii) the time at which the Rights are exchanged as provided in
Section 24 hereof (the earlier of (i), (ii) and (iii) being the “Expiration
Date”).
(b) The
purchase price for each share of Common Stock pursuant to the exercise of a
Right shall initially be $30.00, shall be subject to adjustment from time to
time as provided in Sections 11 and 13 hereof and shall be payable in
lawful money of the United States of America in accordance with
paragraph (c) below (the “Purchase Price”).
(c) Upon
receipt of a Right Certificate representing exercisable Rights, with the form
of
election to purchase duly executed, accompanied by payment of the Purchase
Price
for shares of Common Stock (or other shares, securities, cash, or other assets,
as the case may be) to be purchased and an amount equal to any applicable
transfer tax in cash, or by certified check or bank draft payable to the order
of the Company, the Rights Agent shall thereupon promptly (i) requisition
from any transfer agent of the Common Stock of the Company certificates for
the
number of shares of the Common Stock to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests,
(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, (iii) after receipt of such certificates, cause the same
to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and (iv) when appropriate, after receipt promptly 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 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 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.
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(e) Notwithstanding
anything in this Agreement to the contrary, from and after the occurrence of
a
Triggering Event, any Rights beneficially owned by (i) an Acquiring Person
or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of
an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such, or (iii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes
a
transferee prior to or concurrently with the Acquiring Person becoming such
and
receives such Rights pursuant to either (A) a transfer (whether or not for
consideration) from the Acquiring Person to holders of equity interests in
such
Acquiring Person or to any Person with whom the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B) a transfer which the Board of Directors of the Company has
determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e), shall become
null and void upon the occurrence of a Triggering Event and no holder of such
Rights shall have any right with respect to such Rights under any provision
of
this Agreement from and after the occurrence of a Triggering Event. The Company
shall use all reasonable efforts to insure that the provisions of this
Section 7(e) and Section 4(b) hereof are complied with, but shall have
no liability to any holder of Right Certificates or other Person as a result
of
its failure to make any determinations with respect to an Acquiring Person
or
its Affiliates, Associates or transferees hereunder.
(f) 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 upon the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed and
signed the certificate contained in the form of election to purchase set forth
on the reverse side of the Right Certificate surrendered for such exercise,
and
(ii) provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) or Affiliates or Associates thereof as the
Company shall reasonably request.
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 Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in such
case shall deliver a certificate of destruction thereof to the
Company.
SECTION
9. Reservation
and Availability of Shares 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 shares of Common Stock or
its
authorized and issued Common Stock held in its treasury, the number of shares
of
the Common Stock that will be sufficient to permit the exercise in full of
all
outstanding Rights.
(b) So
long
as the Common Stock issuable upon the exercise of Rights may be listed on any
national securities exchange, from and after the Distribution Date to the
Expiration Date, the Company shall use its best efforts to cause all shares
reserved for such issuance to be listed on such exchange upon official notice
of
issuance upon such exercise.
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(c) The
Company shall use its best efforts to (i) prepare and file, as soon as
practicable following the Distribution Date, a registration statement under
the
Securities Act of 1933 (the “Act”), with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate form,
(ii) cause such registration statement to become effective as soon as
practicable after such filing, and (iii) cause such registration statement
to remain effective (with a prospectus at all times meeting the requirements
of
the Act) until the Expiration Date. The Company will also take such action
as
may be appropriate under the Blue Sky laws of the various states. The Company
may temporarily suspend, for a period of time not to exceed ninety (90)
days, the exercisability of the Rights in order to prepare and file 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.
(d) The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all shares of the Common Stock delivered upon exercise
of Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Purchase Price), be duly and validly authorized
and
issued and fully paid and nonassessable.
(e) The
Company further covenants and agrees that it will pay when due and payable
any
and all federal and state transfer taxes and charges which may be payable in
respect of the issuance or delivery of the Right Certificates or of any shares
of the Common Stock upon the exercise of Rights. The Company shall not, however,
be required (a) to pay any transfer tax which may be payable in respect of
any transfer involved in the transfer or delivery of Right Certificates or
the
issuance or delivery of certificates for the Common Stock in a name other than
that of the registered holder of the Right Certificate evidencing Rights
surrendered for exercise or (b) to issue or deliver any certificates for
shares of the Common Stock upon the exercise of any Rights until any such tax
shall have been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax is due.
SECTION
10. Common
Stock Record Date.
Each
person in whose name any certificate for shares of Common Stock is issued upon
the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the Common Stock 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 Common Stock 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 Common Stock 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 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.
10
SECTION
11. Adjustment
of Purchase Price, Number of Shares or Number of
Rights.
The
Purchase Price, the number 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 outstanding shares of Common Stock payable in
shares of Common Stock, (B) subdivide the outstanding Common Stock,
(C) combine the outstanding Common Stock into a smaller number of shares,
or (D) issue any shares of its capital stock in a reclassification of the
Common Stock (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing 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 (subject to Section 7(e)) the holder of any
Right exercised after such time shall be entitled to receive the aggregate
number and kind of shares of capital stock which, if such Right had been
exercised immediately prior to such date and at a time when the Common Stock
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 Section 11(a)(i) and Section 11(a)(ii), the
adjustment provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) Subject
to Section 24 of this Agreement and the provisions of the next paragraph of
this Section 11(a)(ii), in the event any Person shall become an Acquiring
Person, 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 shares of Common Stock for which a Right is then exercisable,
in accordance with the terms of this Agreement, such number of shares of Common
Stock of the Company as shall equal the result obtained by (x) multiplying
the then current Purchase Price by the then number of shares of Common Stock
for
which a Right is then exercisable and dividing that product by (y) the
Purchase Price or, if less than the Purchase Price, the then current per share
market price of the Company's Common Stock (determined pursuant to
Section 11(d) hereof) on the date on which any Person shall become an
Acquiring Person; provided,
however,
that if
the transaction that would otherwise give rise to the foregoing adjustment
is
also subject to the provisions of Section 13 hereof, then only the
provisions of Section 13 shall apply and no adjustment shall be made
pursuant to this Section 11(a)(ii). 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.
Notwithstanding
the foregoing or anything in this Agreement to the contrary, 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.
11
(iii) In
lieu
of issuing shares of Common Stock in accordance with Section 1l(a)(ii)
hereof, the Company may, if a majority of the Board of Directors then in office
determines that such action is necessary or appropriate and not contrary to
the
interests of holders of Rights, elect to (and, in the event that the Board
of
Directors has not exercised the exchange right contained in Section 24(c)
hereof and there are not sufficient treasury shares and authorized but unissued
shares of Common Stock to permit the exercise in full of the Rights in
accordance with Section 1l(a)(ii), the Company shall) take all such action
as may be necessary to authorize, issue or pay, upon the exercise of the Rights,
cash (including by way of a reduction of the Purchase Price), property, other
securities or any combination thereof having an aggregate value equal to the
shares of Common Stock that otherwise would have been issuable pursuant to
Section 1l(a)(ii) hereof ( “Common Stock Equivalents”), that aggregate
value shall be determined by a nationally recognized investment banking firm
selected by a majority of the Board of Directors then in office. For purposes
of
the preceding sentence, the value of the shares of Common Stock shall be
determined pursuant to Section 11(d) hereof. Any such election by the Board
of Directors must be made within 60 days following the date on which the
event described in Section 1l(a)(ii) hereof shall have occurred. Following
the occurrence of the event described in Section 1l(a)(ii) hereof, a
majority of the Board of Directors then in office may suspend the exercisability
of the Rights for a period of up to 60 days following the date on which the
event described in Section 1l(a)(ii) hereof shall have occurred to the
extent that such directors have not determined whether to exercise their rights
of election under this Section 1l(a)(iii). 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.
(b) In
the
case the Company shall fix a record date for the issuance of rights or warrants
to all holders of Common Stock entitling them (for a period expiring within
45 calendar days after such record date) to subscribe for or purchase
Common Stock (or securities convertible into Common Stock) at a price per share
of Common Stock (or having a conversion price per share of Common Stock, if
a
security is convertible into the Common Stock) less than the current market
price per share of the Common Stock (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 shares
of Common Stock outstanding on such record date plus the number of shares of
Common Stock which the aggregate offering price of the total number of shares
of
Common Stock so to be offered (and/or the aggregate initial conversion price
of
the convertible securities so to be offered) would purchase at such current
market price and the denominator of which shall be the number of shares of
Common Stock outstanding on such record date plus the number of additional
shares of Common Stock to be offered for subscription or purchase (or into
which
the convertible securities so to be offered are initially convertible). In
case
such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be
as
determined in good faith by the Board of Directors of the 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 Rights. Shares of the
Common Stock 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 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
has
not been fixed.
12
(c) In
case
the Company shall fix a record date for the making of a distribution to all
holders of Common Stock (including any such distribution made in connection
with
a consolidation or merger in which the Company is the continuing corporation)
of
evidences of indebtedness, cash (other than a regular periodic cash dividend
at
a rate not in excess of 125% of the rate of the last cash dividend theretofore
paid) assets, stock (other than a dividend payable in Common Stock) or
subscription rights or warrants (excluding those referred to in
Section 11(b)), the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
current market price per share of the Common Stock (as defined in
Section 11(d)) 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 cash, assets, stock or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to one share
of the Common Stock and of which the denominator shall be such current market
price per share of the Common Stock. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such distribution
is
not so made, the Purchase Price shall again be adjusted to be the Purchase
Price
which would then be in effect if such record date had not been
fixed.
(d) For
the
purpose of any computation hereunder, the “current market price” per, or value
of a, share of the Common Stock on any date of determination shall be deemed
to
be the average of the daily closing prices per share of such Common Stock for
the 30 consecutive Trading Days (as such term is hereinafter defined)
immediately prior to such date; provided,
however,
that in
the event that the current market price (or value) per share of the Common
Stock
is determined during the period following the announcement by the issuer of
such
Common Stock of (i) a dividend or distribution on such Common Stock payable
in shares of such Common Stock or securities convertible into shares of such
Common Stock, or (ii) any sub-division, combination or reclassification of
such Common Stock, and prior to the expiration of 30 Trading Days after the
ex-dividend date for such dividend or distribution, or the record date for
such
sub-division, combination or reclassification, then, and in each such case,
the
“current market price” or “value” shall be appropriately 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 shares of the Common Stock are not listed or admitted to trading
on
the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the shares of the Common Stock are listed
or admitted to trading or, if the shares of the Common Stock are not listed
or
admitted to trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then in
use,
or, if on any such date the shares of the Common Stock are not quoted by such
organization, the average of the closing bid and asked prices as furnished
by a
professional market maker making a market in the Common Stock selected by the
Board of Directors of the Company. If on any such date no market maker is making
a market in the Common Stock, the fair value of such shares on such date as
determined in good faith by the Board of Directors of the Company shall be
used.
The term “Trading Day” shall mean a day on which the principal national
securities exchange on which the shares of Common Stock are listed or admitted
to trading is open for the transaction of business or, if the shares of the
Common Stock are not listed or admitted to trading on any national securities
exchange, a Business Day. If the Common Stock is not publicly held or not so
listed or traded, “current market price” per share 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.
13
(e) No
adjustment in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least 1% in such price; provided, however,
that any adjustments which by reason of this Section 11(e) are not required
to be made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the
nearest cent or to the nearest ten-thousandth of a share 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 mandates such
adjustment or (ii) the Expiration Date.
(f) If,
as a
result of an adjustment made pursuant to Section 11(a) [or
Section 13(a)], the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than shares
of the Common Stock, 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 shares contained in Section 11(a), (b), (c), (d), (e), (g),
(h), (i), (j), (k), (l) and (m), and the provisions of Sections 7, 9, 10,
13 and 14 with respect to the shares of the Common Stock 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 shares of the Common Stock 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 shares of Common Stock
(calculated to the nearest ten-thousandth) obtained by (i) multiplying
(x) the number of shares 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.
14
(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 shares of the Common Stock purchasable upon the exercise of a Right. Each
of
the Rights outstanding after such adjustment of the number of Rights shall
be
exercisable for the number of shares of the Common Stock for which a Right
was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest 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 the 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 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 Right Certificates on such
record date Right Certificates evidencing, subject to Section 14, the
additional Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed
to
such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Right Certificates evidencing
all the Rights to which such holders shall be entitled after such adjustment.
Right Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein (and may bear, at the option
of
the Company, the adjusted Purchase Price) and shall be registered in the names
of the holders of record of Right Certificates on the record date specified
in
the public announcement.
(j) Irrespective
of any adjustment or change in the Purchase Price or the number of shares of
the
Common Stock issuable upon the exercise of the Rights, the Right Certificates
theretofore and thereafter issued may continue to express the Purchase Price
per
share and the number of shares 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 the then par value, if any, of the shares of Common Stock issuable upon
exercise of the Rights, the Company shall take any corporate action which may,
in the opinion of its counsel, be necessary in order that the Company may
validly and legally issue fully paid and nonassessable shares of such Common
Stock at such adjusted Purchase Price.
(1) 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 (and shall give the Rights Agent prompt written
notice of such election) until the occurrence of such event the issuing to
the
holder of any Right exercised after such record date the shares of Common Stock
and other capital stock or securities of the Company, if any, issuable upon
such
exercise over and above the shares of the Common Stock 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.
15
(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 Common Stock, (ii) issuance
wholly for cash of any shares of Common Stock at less than the current market
price, (iii) issuance wholly for cash of shares of Common Stock or
securities which by their terms are convertible into or exchangeable for Common
Stock, (iv) stock dividends, or (v) issuance of rights, options or
warrants referred to hereinabove in this Section 11, hereafter made by the
Company to holders of its Common Stock shall not be taxable to such
shareholders.
(n) The
Company covenants and agrees that it shall not, at any time after the
Distribution Date, (i) consolidate with, (ii) merge with or into, or
(iii) sell or transfer (or permit any Subsidiary to sell or transfer), in
one or more transactions assets or earning power aggregating more than 50%
of
the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person (other than a Subsidiary of the Company in a
transaction that complies with this Section 11(n)) if (x) at the time
of or immediately after such consolidation, merger or sale there are any rights,
warrants or other instruments or securities outstanding or agreements in effect
which would substantially diminish or otherwise eliminate the benefits intended
to be afforded by the Rights or (y) prior to, simultaneously with, or
immediately after such consolidation, merger, or sale, the stockholders of
the
Person who constitutes, or would constitute, the “Principal Party” for purposes
of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates.
(o) The
Company covenants and agrees that, after the Distribution Date, it will not,
except as permitted by Sections 23 and 27 hereof, take (nor will it
permit any Subsidiary to take) any action if at the time such is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) The
failure by the Board of Directors to declare a Person to be an Acquiring Person
following such Person becoming the Beneficial Owner of 15% or more of the shares
of Common Stock then outstanding shall not imply that such Person is not an
Acquiring Person or limit the Board of Directors’ right at any time in the
future to declare such Person to be an Acquiring Person.
SECTION
12. Certificate
of Adjusted Purchase Price or Number of Shares.
Whenever
an adjustment is made as provided in Sections 11 and 13, the Company shall
(a) promptly prepare a certificate setting forth such adjustment, and a
brief statement of the facts accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the Common Stock
a
copy of such certificate, and (c) mail a brief summary thereof to each
holder of a Right Certificate (or, prior to the Distribution Date, each holder
of a certificate representing shares of Common Stock) in accordance with
Section 26. The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained and shall have no
duty
with respect to, and shall not be deemed to have knowledge of, such adjustment
unless and until it shall have received such certificate.
16
SECTION
13. Consolidation,
Merger or Sale or Transfer of Assets or Earning Power.
(a) In the event that, following the Distribution Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with and into,
any other Person, (y) any Person (other than a Subsidiary of the Company in
a transaction that complies with Section 11(o)) shall consolidate, merge
with and into the Company, the Company shall be the continuing or surviving
corporation of such merger and, in connection with such merger, all or part
of
the Common Stock shall be changed into or exchanged for stock or other
securities of any other Person or cash or any other property, or (z) 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 more than 50% of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person (other
than
a Subsidiary of the Company in a transaction that complies with
Section 11(o)), then, and in each such case, proper provision shall be made
so that (i) each holder of a Right, except as provided in Section 7(e)
hereof, shall thereafter have the right to receive, upon the exercise thereof
at
the then-current Purchase Price in accordance with the terms of this Agreement,
such number of shares of validly issued, fully paid, non-assessable and freely
tradable Common Stock of the Principal Party (as hereinafter defined), not
subject to any liens, rights of call or first refusal, encumbrances or other
adverse claims, as shall be equal to the result obtained by (1) multiplying
the then current Purchase Price by the then number of shares of Common Stock
for
which a Right is then exercisable immediately prior to the occurrence of such
event (without taking into account any adjustment previously made pursuant
to
Section 11(a)(ii) hereof) and dividing that product by (2) 50% of the
current market price per share of the Common Stock of such Principal Party
(determined in the manner described in Section 11(d)) on the date of
consummation of such consolidation, merger, sale or transfer; (ii) the
Principal Party shall thereafter be liable for, and shall assume, by virtue
of
such consolidation, merger, sale or transfer, all the obligations and duties
of
the Company pursuant to this Agreement; (iii) the term “Company” shall
thereafter be deemed to refer to such Principal Party, it being specifically
intended that the provisions of Section 11 hereof shall apply to such
Principal Party; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient number of shares
of its Common Stock in accordance with Section 9) 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
shares of its Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) hereof shall be of
no effect following the first occurrence of any of the transactions described
in
Section 13(a) hereof.
(b) “Principal
Party” shall mean
(1)
in
the case of any transaction described in (x) or (y) of the first sentence of
Section 13(a), the Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in such merger or
consolidation, and if no securities are so issued, the Person that is the other
party to the merger or consolidation; and
17
(2)
in
the case of any transaction described in (z) of the first sentence in this
Section 13, the Person that is the other party to such transaction;
provided,
however,
that in
any such case, (x) if the Common Stock of such Person is not at such time
and has not been continuously over the preceding 12-month period registered
under Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another corporation the Common Stock of which is and
has
been so registered, “Principal Party” shall refer to such other corporation;
(y) in case such Person is a Subsidiary, directly or indirectly, of more
than one corporation, the Common Stocks of all of which are and have been so
registered, “Principal Party” shall refer to whichever of such corporations is
the issuer of the Common Stock having the greatest market value of shares held
by the public, and (z) in case such Person is owned, directly or
indirectly, by a joint venture formed by two or more Persons that are not owned,
directly or indirectly, by the same Person, the rules set forth in (x) and
(y)
above shall apply to each of the chains of ownership having an interest in
such
joint venture as if such party were a “Subsidiary” of both or all of such joint
venturers and the Principal Parties in each such chain shall bear the
obligations set forth in this Section 13 in the same ratio as their direct
or indirect interests in such Person bear to the total of such
interests.
(c) The
Company shall not consummate any such consolidation, merger, sale or transfer
unless the Principal Party shall have a sufficient number of authorized shares
of its Common Stock that have not been issued or reserved for issuance to permit
the exercise in full of the Rights pursuant to this Section 13 and prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing for the terms set forth
in paragraphs (a) and (b) of this Section 13, and further providing
that, as soon as practicable after the date of any consolidation, merger or
sale
of assets mentioned in paragraph (a) of this Section 13, the Principal
Party will
(i) prepare
and file a registration statement under the Securities Act with respect to
the
Rights and the securities purchasable upon exercise of the Rights on an
appropriate form, will use its best efforts to cause such registration statement
to become effective as soon as practicable after such filing and will use its
best efforts to cause such registration statement to remain effective (with
a
prospectus at all times meeting the requirements of the Act) until the
Expiration Date; and
(ii) use
its
best efforts to qualify or register the Rights and the securities purchasable
upon exercise of the Rights under the blue sky laws of such jurisdictions as
may
be necessary or appropriate;
(iii) list
the
Rights and the securities purchasable upon exercise of the Rights on each
national securities exchange on which the Common Stock was listed prior to
the
consummation of such consolidation, merger, sale or transfer of assets or,
if
the Common Stock was not listed on a national securities exchange prior to
the
consummation of such consolidation, merger, sale or transfer of assets, on
a
national securities exchange; and
18
(iv) deliver
to holders of the Rights historical financial statements for the Principal
Party
and each of its Affiliates which comply in all respects with the requirements
for registration on Form 10 under the Exchange Act.
(d) In
case
the Principal Party which is to be a party to a transaction referred to in
this
Section 13 has a provision in any of its authorized securities or in its
Certificate of Incorporation or By-laws or other instrument governing its
corporate affairs, which provision would have the effect of (i) causing
such Principal Party to issue, in connection with or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then current market price
per share (determined pursuant to Section 11(d)) or securities exercisable
for, or convertible into, shares of Common Stock of such Principal Party at
less
than such then current market price (other than to holders of Rights pursuant
to
this Section 13), or (ii) providing for any special payment, tax or
similar provisions in connection with the issuance of the shares of Common
Stock
of such Principal Party pursuant to the provisions to this Section 13,
then, in such event, the Company shall not consummate any such transaction
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been cancelled, waived
or amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a consequence
of, the proposed transaction.
(e) The
provisions of this Section 13 shall similarly apply to successive mergers
or consolidations or sales or other transfers. In the event that one of the
transactions described in Section 13(a) hereof shall occur at any time
after the occurrence of a transaction described in Section 11(a)(ii)
hereof, the Rights which have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
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, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are
not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by NASDAQ or such other
system then in use or, if on any such date the Rights are not quoted by any
such
organization, the average of the closing bid and asked prices as furnished
by a
professional market maker making a market in the Rights selected by the Board
of
Directors of the Company. If on any such date no such market maker is making
a
market in the Rights the fair value of the Rights on such date as determined
in
good faith by the Board of Directors of the Company shall be
used.
19
(b) The
Company shall not be required to issue fractions of shares of Common Stock
upon
exercise of the Rights or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of fractional shares of Common Stock, the
Company may pay to the registered holders of Right Certificates at the time
such
Right Certificates are exercised as herein provided an amount in cash equal
to
the same fraction of the current market value of a share of the Common Stock.
For purposes of this Section 14(b), the current market value of a share of
the Common Stock shall be the closing price of a share of the Common Stock
(as
determined pursuant to the second sentence of Section 11(d)) for the
Trading Day immediately prior to the date of such exercise.
(c) The
holder of a Right by the acceptance of the Rights expressly waives his right
to
receive any fractional Rights or any fractional shares of Common Stock upon
exercise of a Right.
SECTION
15. Rights
of Action.
All
rights of action in respect of this Agreement are vested in the respective
registered holders of the Right Certificates (and, prior to the Distribution
Date, the registered holders of the Common Stock); and any registered holder
of
any Right Certificate (or, prior to the Distribution Date, of the Common Stock),
without the consent of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the Common Stock), may,
in
his own behalf and for his own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the 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 and subject to the limitations set forth in such Right Certificates
and in this Agreement. Without limiting the foregoing or any remedies available
to the holders of Rights, it is specifically acknowledged that the holders
of
Rights would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations
of
any Person subject to this Agreement.
SECTION
16. Agreement
of Right Holders.
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 transferrable only in connection
with
the transfer of the Common Stock;
(b) after
the
Distribution Date, the Right Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal office of the Rights
Agent, duly endorsed or accompanied by a proper instrument of
transfer;
(c) the
Company and the Rights Agent may deem and treat the Person in whose name the
Right Certificate (or, prior to the Distribution Date, the associated Common
Stock 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 Stock 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
20
(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 administrative agency or commission, or any statute, rule,
regulation, or executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of such obligation;
provided,
however,
the
Company must use its best efforts to have any such order, decree, or ruling
(whether interlocutory or final) 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 Common Stock 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 shareholder of the Company or
any
right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as provided in Section 25), 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.
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
Rights Agent shall be protected and shall incur no liability for or in respect
of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Right Certificate or
certificate for the Common Stock 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. The Rights
Agent shall not be deemed to have knowledge of any event of which it was
supposed to receive notice thereof hereunder, and the Rights Agent shall be
fully protected and shall incur no liability for failing to take any action
in
connection therewith unless and until it has received such notice in
writing.
21
SECTION
19. Merger
or Consolidation or Change of Name of Rights Agent.
(a) Any Person into which the Rights Agent or any successor Rights Agent
may be merged or with which it may be consolidated, or any Person resulting
from
any merger or consolidation to which the Rights Agent or any successor Rights
Agent shall be a party, or any Person succeeding to the corporate trust business
of the Rights Agent or any successor Rights Agent, shall be the successor to
the
Rights Agent under this Agreement without the execution or filing of any paper
or any further act on the part of any of the parties hereto, provided that
such
Person would be eligible for appointment as a successor Rights Agent under
the
provisions of Section 21. 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 so countersigned; and in
case
at that time any of the Right Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Right Certificates either in
the
name of the predecessor Rights Agent or in the name of the successor Rights
Agent; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
(b) In
case
at any time the name of the Rights Agent shall be changed and at such time
any
of the Right Certificates shall have been countersigned but not delivered,
the
Rights Agent may adopt the countersignature under its prior name and deliver
Right Certificates so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, the Rights Agent may countersign
such Right Certificates either in its prior name or in its changed name; and
in
all such cases such Right Certificates shall have the full force provided in
the
Right Certificates and in this Agreement.
SECTION
20. Duties
of Rights Agent.
The
Rights Agent undertakes the duties and obligations imposed by this Agreement
upon the following terms and conditions, by all of which the Company and the
holders of Right Certificates, by their acceptance thereof, shall be
bound:
(a) The
Rights Agent may consult with the 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, the Chief Financial Officer, 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.
22
(c) The
Rights Agent shall be liable hereunder only for its own negligence, bad faith
or
willful misconduct.
(d) The
Rights Agent shall not be liable for or by reason of any of the statements
of
fact or recitals contained in this 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 any Rights becoming
null and void pursuant to Section 7(e)); nor shall it be responsible for
any adjustment required under the provisions of Sections 11 or 13 or
responsible for the manner, method or amount of any such adjustment or the
ascertaining of the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right Certificates
after actual notice of any such adjustment); nor shall it by any act hereunder
be deemed to make any representation or warranty as to the authorization or
reservation of any shares of Common Stock to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares of Common Stock
will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The
Company agrees that it will perform, execute, acknowledge and deliver or cause
to be performed, executed, acknowledged and delivered all such further and
other
acts, instruments and assurances as may reasonably be required by the Rights
Agent for the carrying out or performing by the Rights Agent of the provisions
of this Agreement.
(g) The
Rights Agent is hereby authorized and directed to accept instructions with
respect to the performance of its duties hereunder from any one of the Chairman
of the Board, the Chief Executive Officer, the President, the Chief Financial
Officer, 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 to be taken
b y it in good faith in accordance with instructions of any such
officer.
(h) The
Rights Agent and any shareholder, director, officer or employee of the Rights
Agent may buy, sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend interested 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.
23
(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) If,
with
respect to any Right 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 either not been completed or indicates
an
affirmative response to clauses 1 and/or 2 thereof, the Rights Agent shall
not take any further action with respect to such requested exercise of 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 Stock by registered or
certified mail, and to the holders of the Right Certificates by first class
mail. The Company may remove the Rights Agent or any successor Rights Agent
upon
30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock by
registered or certified mail, and to the holders of the Right Certificates
by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor
to
the Rights Agent. If the Company shall fail to make such appointment within
a
period of 30 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
either (i) a corporation organized and doing business under the laws of the
United States or of the State of New York (or of any other state of the
United States, so long as such corporation is authorized to do business as
a
banking institution in the State of New York), in good standing, having a
principal office in the State of New York, which is authorized under such
laws to exercise corporate trust powers and is subject to supervision or
examination by federal or state authority or which has at the time of its
appointment as Rights Agent a combined capital and surplus of at least
$50 million or (ii) a direct or indirect Subsidiary of such an entity
or its wholly-owned parent. 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 Stock, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
24
SECTION
22. Issuance
of New Right Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the
contrary, the Company may, at its option, issue new Right Certificates
evidencing Rights in such form as may be approved by its Board of Directors
to
reflect any adjustment or change in the Purchase Price per share and the number
or kind or class of shares or other securities or property purchasable under
the
Right Certificates made in accordance with the provisions of this Agreement.
In
addition, subject to Section 11(a)(ii) hereof, in connection with the
issuance of Common Stock on or following the Distribution Date and prior to
the
Expiration Date, the Company shall, with respect to Common Stock so issued
upon
the exercise, conversion or exchange of options, warrants, securities, notes
or
debentures issued by the Company prior to the Distribution Date (other than
shares issues upon exercise or exchange of the Rights), issue Right Certificates
representing the appropriate number of Rights in connection with such issuance;
provided,
however,
that,
(i) no such Right Certificate shall be issued if, and to the extent that,
the Company shall be advised by counsel that such issuance would create
significant risk of material adverse tax consequences to the Company or the
Person to whom such Right Certificate would be issued, and (ii) no such
Right Certificate shall be issued if, and to the extent that, appropriate
adjustment (giving effect to the provisions of Sections 11(a)(ii) and 13
hereto) shall otherwise have been made in lieu of the issuance
thereof.
SECTION
23. Redemption.
(a)
The Company may, at its option and with the approval of the Board of Directors,
at any time prior to the Close of Business on the earlier of (i) the tenth
day
following the Shares Acquisition Date or such later date as may be determined
by
action of a majority of the members of the Board of Directors then in office
and
publicly announced by the Company or (ii) the Final Expiration Date, redeem
all
but not less than all the then outstanding Rights at a redemption price of
$0.0001 per Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof (such redemption
price being herein referred to as the “Redemption Price”) and the Company may,
at its option, pay the Redemption Price either in shares of Common Stock (based
on the current per share market price thereof, as determined pursuant to Section
11(d) hereof, at the time of redemption) or cash. 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.
(b) Immediately
upon the action of the Board of Directors of the Company by the affirmative
vote
of at least a majority of its members ordering the redemption of the Rights,
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 for each Right so held. 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 the action of the Board
of Directors ordering the redemption of the Rights, the Company shall give
notice of such redemption to the holders of the then outstanding Rights by
mailing such notice to all such holders at their last addresses as they appear
upon the registry books of the Rights Agent or, prior to the Distribution Date,
on the registry books of the Transfer Agent for the Common Stock. Any notice
which is mailed in the manner herein provided shall be deemed given, whether
or
not the holder receives the notice. Each 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, and other than in connection
with the repurchase of Common Stock prior to the Distribution
Date.
25
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 7(e) and
Section 11(a)(ii) hereof) for Common Stock or Common Stock Equivalents, or
any combination thereof, at an exchange ratio of one share of Common Stock
or
such Common Stock Equivalents or units representing fractions thereof as would
be deemed to have the same value as one share of Common Stock, per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such exchange ratio being
thereinafter referred to and 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 wholly-owned
subsidiary of the Company, any employee benefit plan of the Company or any
such
subsidiary or any entity holding Common Stock 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 Stock 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 shares of Common Stock and/or Common Stock
Equivalents 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,
however,
that
the failure to give, or any defect in, such notice shall not affect the validity
of such exchange. The Company promptly shall mail a notice of any such exchange
to all 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 Stock and/or Common Stock Equivalents for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will
be
exchanged. Any partial exchange shall be effected pro rata based on the number
of Rights (other than Rights which have become void pursuant to the provisions
of Section 7(e) and Section 11(a)(ii) hereof) held by each holder of
Rights.
(c) In
the
event that there shall not be sufficient Common Stock issued but not outstanding
or authorized but unissued to permit any exchange of Rights as contemplated
in
accordance with this Section 24, the Company shall take all such action as
may be necessary to authorize additional Common Stock for issuance upon exchange
of the Rights.
26
(d) The
Company shall not be required to issue fractions of shares of Common Stock
or to
distribute certificates which evidence fractional shares of Common Stock. In
lieu of such fractional shares of Common Stock, the Company shall pay to the
registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in
cash
equal to the same fraction of the current market value of a whole share of
Common Stock. For the purposes of this paragraph (d), the current market
value of a whole share of Common Stock shall be the closing price of a share
of
Common Stock (as determined pursuant to the second sentence of
Section 11(d) hereof) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24 and the value of any Common Stock
Equivalent shall be deemed to have the same value as the Common Stock on such
date.
SECTION
25. Notice
of Certain Events.
In case
the Company shall propose at any time following the Distribution Date
(a) to pay any dividend payable in stock or any class to the holders of its
Common Stock or to make any other distribution to the holders of its Common
Stock (other than a regular periodic cash dividend at a rate not in excess
of
125% of the rate of the last cash dividend theretofore paid out of earnings
or
retained earnings of the Company), or (b) to offer to the holders of its
Common Stock rights or warrants to subscribe for or to purchase any additional
shares of the Common Stock or shares of stock of any class or any other
securities, rights or options, or (c) to effect any reclassification of its
Common Stock (other than a reclassification involving only the subdivision
of
outstanding Common Stock), or (d) to effect any consolidation or merger
into or with any other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o)), or to effect any sale or
other transfer (or to permit one or more of its Subsidiaries to effect any
sale
or other transfer), in one or more transactions, of more that 50% of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to,
any
other Person or Persons (other than a Subsidiary of the Company in a transaction
which complies with Section 11(o)), or (e) to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Right, in accordance with Section 26, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants, or the
date
on which such reclassification, consolidation, merger, sales transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the Common Stock, if any such date
is to
be fixed, and such notice shall be so given in the case of any action covered
by
clauses (a) or (b) above at least 20 days prior to the record date for
determining holders of the Common Stock for purposes of such action, and in
the
case of any such other action, at least 20 days prior to the date of the
taking of such proposed action or the date of participation therein by the
holders of the Common Stock, whichever shall be the earlier.
In
case
any of the events set forth in Section 11(a)(ii) of this Agreement shall
occur, then (i) the Company shall as soon as practicable thereafter give to
each holder of a Right, to the extent feasible and in accordance with
Section 26, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under
Section ll(a)(ii) and (ii) all references in the preceding paragraph
to Common Stock shall be deemed to refer, if appropriate, to Common Stock
Equivalents.
27
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)
or
by facsimile transmission as follows:
NATHAN'S
FAMOUS, INC.
0000
Xxx
Xxxxxxx Xxxx
Xxxxx
000
Xxxxxxxx,
Xxx Xxxx 00000
Facsimile
No.:
Attention:
Xxxxxx XxXxx
Corporate
Secretary
Subject
to the provisions of Section 21, 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) or by facsimile transmission as
follows:
American
Stock Transfer and Trust Company
00
Xxxxxx
Xxxx
Xxxxx
Xxxxx
Xxx
Xxxx,
Xxx Xxxx 00000
Facsimile
No.:
Attention:
Xxxxxxx Xxxxxx
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.
Prior to
the Distribution Date, the Company may supplement or amend this Agreement in
any
respect without the approval of any holders of Rights and the Rights Agent
shall, if the Company so directs, execute such supplement or amendment. From
and
after the Distribution Date, the Company and the Rights Agent may from time
to
time supplement or amend this Agreement without the approval of any holders
of
Rights in order to (i) cure any ambiguity, (ii) correct or supplement any
provision contained herein which may be defective or inconsistent with any
other
provisions herein, (iii) shorten or lengthen any time period hereunder (which
lengthening or shortening, following the first occurrence of an event set forth
in clauses (i) and (ii) of the proviso to Section 23(a) hereof, shall require
the concurrence of a majority of the members of the Board of Directors then
in
office) or (iv) to change or supplement the provisions hereunder in any manner
that the Company may deem necessary or desirable and that shall not adversely
affect the interests of the holders of Rights (other than an Acquiring Person
or
an Affiliate or Associate of an Acquiring Person); provided, that this Agreement
may not be supplemented or amended to lengthen, pursuant to clause (iii) of
this
sentence, (A) a time period relating to when the Rights may be redeemed at
such
time as the Rights are not then redeemable or (B) any other time period unless
such lengthening is for the purpose of protecting, enhancing or clarifying
the
rights of, and/or the benefits to, the holders of Rights. Upon the delivery
of a
certificate from an appropriate officer of the Company that states that the
proposed supplement or amendment is in compliance with the terms of this Section
27, the Rights Agent shall execute such supplement or amendment. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock. Notwithstanding
any other provision hereof, the Rights Agent’s consent must be obtained
regarding any amendment or supplement pursuant to this Section 27 which alters
the Rights Agent’s rights or duties, which consent shall not be unreasonably
withheld.
28
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. Determinations
and Actions by the Board of Directors, etc. For
all
purposes of this Agreement, any calculation of the number of shares of Common
Stock outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding shares of Common Stock of which
any Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations under
the
Exchange Act. The Board of Directors of the Company (and, where specifically
provided for herein, a majority of the members of the Board of Directors then
in
office) shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board, or the Company (or, where specifically provided for herein, a majority
of
the members of the Board of Directors then in office), or as may be necessary
or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for
the
administration of this Agreement (including a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the
Board
(or, where specifically provided for herein, by a majority of the members of
the
Board of Directors then in office) in good faith, shall (x) be final, conclusive
and binding on the Company, the Rights Agent, the holders of the Rights
Certificates and all other parties and (y) not subject the members of the Board
of Directors to any liability to the holders of the Rights.
SECTION
30. 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 Stock) 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 registered holders of the Common Stock).
29
SECTION
31. Severability.
If any
term, provision, covenant or restriction of this Agreement is held by a court
of
competent jurisdiction or other authority to be invalid, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated; provided, however, that notwithstanding anything in
this Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board of Directors of the Company determines in its good
faith judgment that severing the invalid language from this Agreement would
adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the close of business on the tenth day following the date of such
determination by the Board of Directors.
SECTION
32. 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 New York 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
33. Counterparts.
This
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
SECTION
34. Descriptive
Headings.
Descriptive
headings of the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of
the
provisions hereof.
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
|
Attest:
|
NATHAN'S
FAMOUS, INC.
|
|
|
/s/
Xxxxxx XxXxx
|
By:
|
/s/
Xxxxx Xxxxxxx
|
|
Secretary
|
|
Name:
Xxxxx
Xxxxxxx
|
|
|
Title:
President
|
|
|
Attest:
|
AMERICAN
STOCK TRANSFER AND
TRUST
COMPANY
|
|
|
/s/
Xxxxx Xxxxxx
|
By:
|
/s/
Xxxxxxx X. Xxxxxx
|
|
Xxxxx
Xxxxxx
|
|
Name:
Xxxxxxx
X. Xxxxxx
|
|
Assistant
Secretary
|
|
Title:
Vice
President
|
30
Exhibit
A
[Form
of
Right Certificate]
| Certificate No. R- |
_____________
Rights
|
NOT
EXERCISABLE AFTER JUNE 5, 2013 OR EARLIER IF NOTICE OF REDEMPTION OR EXCHANGE
IS
GIVEN. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY,
AT
$.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. [IF THE RIGHTS
REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON
WHO
WAS OR BECAME AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). THIS RIGHT
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY ARE NULL AND VOID.]*
Right
Certificate
This
certifies that __________________________________, or registered assigns, is
the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement dated as of June 4, 2008 (the “Rights Agreement”) between NATHAN'S
FAMOUS, INC., a Delaware corporation (the “Company”), and AMERICAN STOCK
TRANSFER & TRUST COMPANY (the “Rights Agent”), to purchase from the Company
at any time after the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M. (New York City time) on June 5,
2013, at the principal office of the Rights Agent, or its successors as Rights
Agent, in New York, New York, one fully paid non-assessable share of
the Common Stock, $.01 par value (the “Common Stock”), of the Company, at a
purchase price of $30.00 per 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 shares which may be purchased upon exercise thereof) set forth above,
and the Purchase Price per share set forth above, are the number and Purchase
Price as of June 4, 2008, based on the shares of the Common Stock of the Company
as constituted at such date.
Upon
the
occurrence of a Triggering Event (as such term is defined in the Rights
Agreement), if the Rights evidenced by this Right Certificate are beneficially
owned by (i) an Acquiring Person or an Affiliate or Associate of any such
Acquiring Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of any such Acquiring Person, Associate or Affiliate, or
(iii) under certain circumstances specified in the Rights Agreement, a
transferee of a person who, after such transfer, became an Acquiring Person,
or
an Affiliate or Associate of an Acquiring Person, such Rights shall become
null
and void and no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Triggering Event.
A
-
1
As
provided in the Rights Agreement, the Purchase Price and the number of shares
of
the Common Stock which may be purchased upon the exercise of the Rights
evidenced by this Right Certificate are subject to modification and adjustment
upon the happening of certain events.
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 above-mentioned office of the Rights
Agent.
This
Right Certificate, with or without other Right Certificates, upon surrender
at
the principal office of the Rights Agent, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of shares of the Common
Stock as the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Right Certificate or Right Certificates for the
number of whole Rights not exercised.
Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate (i) may be redeemed by the Company at its option at a
redemption price of $.001 per Right or (ii) may be exchanged in whole or in
part for shares of Common Stock.
No
fractional shares of the Common Stock will be issued upon the exercise of any
Right or Rights evidenced hereby, but in lieu of fractions of a share equal
to
one-half of a share or less, a cash payment will be made, as provided in the
Rights Agreement. No Rights may be exercised that would entitle the holder
to
any fraction of a share of Common Stock greater than one-half of a share unless
concurrently therewith such holder purchases an additional fraction of a share
of Common Stock which, when added to the number of shares of Common Stock to
be
received upon such exercise, equals an integral number of shares of Common
Stock, 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 Common Stock 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 shareholder
of
the Company or any right to vote for the election of directors or upon any
matter submitted to shareholders at any meeting thereof, or to give or withhold
consent to any corporate action, or, to receive notice of meetings or other
actions affecting shareholders (except as provided in the Rights Agreement),
or
to receive dividends or subscription rights, or otherwise, until the Right
or
Rights evidenced by this Right Certificate shall have been exercised 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.
A
-
2
WITNESS
the facsimile signature of the proper officers of the Company and its corporate
seal.
Dated
as
of
..
|
NATHAN'S
FAMOUS, INC.
|
||||
|
|
By:
|
|
||
|
Secretary
|
Name:
|
|||
|
Title:
|
||||
|
Countersigned:
|
||||
|
AMERICAN
STOCK TRANSFER
|
||||
|
&
TRUST COMPANY, as Rights Agent
|
||||
|
By:
|
||||
|
Authorized
Signature
|
||||
A
-
3
(Form
of
Reverse Side of Right Certificate]
FORM
OF ASSIGNMENT
(To
be
executed by the registered holder if such
holder
desires to transfer the Right Certificates.)
FOR
VALUE
RECEIVED ____________________ hereby sells, assigns and transfers
unto
_________________________________________________________________________________________________
(Please
print name and address of transferee)
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.
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.
| Dated: _____________, ______ | ||
|
(month
&
day) (year)
|
Signature |
Signature
Guaranteed:
A
-
4
CERTIFICATE
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1)
this
Right Certificate [ ] is [ ] is not being sold, assigned and transferred by
or
on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Acquiring Person (as such terms are defined pursuant
to
the Rights Agreement);
(2)
after
due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did
not
acquire the Rights evidenced by this Right Certificate from any Person who
is,
was or subsequently became an Acquiring Person or an Affiliate or Associate
of
an Acquiring Person.
| Dated: _____________, _______ | ||
|
(month
&
day) (year)
|
Signature |
NOTICE
The
signature to the foregoing Assignment and Certificate must correspond to the
name as written upon the face of this Right Certificate in every particular,
without alteration or enlargement or any change whatsoever.
A
-
5
FORM
OF ELECTION TO PURCHASE
(To
be
executed if holder desires to exercise the Right Certificate.)
TO:
The
undersigned hereby irrevocably elects to exercise ________________________
Rights represented by this Right Certificate to purchase the shares of the
Common Stock issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name
of:____________________________________________________________________________.
Please
insert social security or other identifying
number:__________________________________
_______________________________________________________________________________
(Please
print name and address)
If
such
number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
_____________________________________________________________________________
(Please
insert social security or other identifying number)
_____________________________________________________________________________
(Please
print name and address)
_____________________________________________________________________________
Dated:
_______________
|
Signature
|
|
|
(Signature
must conform in all respects to name of holder
as specified on the face of this Right Certificate)
|
Signature
Guaranteed:
A
-
6
CERTIFICATE
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1) the
Rights evidenced by this Right Certificate [ ] are [ ] are not being exercised
by or on behalf of a Person who is or was an Acquiring Person or an Affiliate
or
Associate of any such Acquiring Person (as such terms are defined pursuant
to
the Rights Agreement);
(2) after
due
inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did not
acquire the Rights evidenced by this Right Certificate from any Person who
is,
was or became an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated:
_______________, ____
(month
& day) (year)
|
Signature
|
NOTICE
The
signature to the foregoing Election to Purchase and Certificate must correspond
to the name as written upon the fact of this Right Certificate in every
particular, without alteration or enlargement or any change
whatsoever.
A
-
7
Exhibit
B
SUMMARY
OF RIGHTS TO PURCHASE
COMMON
STOCK
On
June
4, 2008, the Board of Directors of NATHAN'S FAMOUS, INC. (the “Company”)
declared a dividend distribution of one Right for each outstanding share of
Common Stock, $.01 par value (the “Common Stock”), of the Company. The
distribution was payable on June 5, 2008, to the shareholders of record on
June
5, 2008 (the “Record Date”). Each Right initially entitles the registered holder
to purchase from the Company a share of Common Stock at a price of $30.00 per
share (the “Purchase Price”), subject to adjustment. The description and terms
of the Rights are set forth in a Rights Agreement (the “Rights Agreement”)
between the Company and AMERICAN STOCK TRANSFER AND TRUST COMPANY, as Rights
Agent (the “Rights Agent”). Until the earlier to occur of (i) ten days
following a public announcement that a person or group of affiliated or
associated persons (an “Acquiring Person”) acquired, or obtained the right to
acquire, beneficial ownership of 15% or more of the outstanding shares of the
Common Stock, or (ii) ten days following the commencement or announcement
of an intention to commence a tender offer or exchange offer by any person
if,
upon consummation thereof, such person would be an Acquiring Person (the earlier
of such dates being called the “Distribution Date”), the Rights will be
evidenced, with respect to any of the Common Stock certificates outstanding
as
of the Record Date by such Common Stock certificate with a copy of this Summary
of Rights attached thereto. The Rights Agreement provides that, until the
Distribution Date, the Rights will be transferred with and only with the Common
Stock. Until the Distribution Date (or earlier redemption or expiration of
the
Rights), new Common Stock certificates issued after the Record Date upon
transfer or new issuance of the Common Stock 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 of the Common Stock certificates outstanding as of the close of business
on
the Record Date even without a copy of this Summary of Rights attached thereto,
will also constitute the transfer of the Rights associated with the Common
Stock
represented by such certificate. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights (“Right
Certificates”) will be mailed to holders of record of the Common Stock as of the
close of business on the Distribution Date and such separate Right Certificates
alone will evidence the Rights.
The
Rights are not exercisable until the Distribution Date. The Rights will expire
on June 5, 2013, unless earlier redeemed by the Company as described
below.
B
-
1
The
Purchase Price payable, and the number of shares of the Common Stock 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
Common Stock, (ii) upon the grant to holders of the Common Stock of certain
rights or warrants to subscribe for shares of the Common Stock or convertible
securities at less than the current market price of the Common Stock, or
(iii) upon the distribution to holders of the Common Stock of evidences of
indebtedness or assets (excluding regular periodic cash dividends out of
earnings or retained earnings at a rate not in excess of 125% of the rate of
the
last cash dividend theretofore paid or dividends payable in the Common Stock)
or
of subscription rights or warrants (other than those referred to
above).
In
the
event that the Company were acquired in a merger or other business combination
transaction or that 50% or more of its assets or earning power were sold, proper
provision shall be made so that each holder of a Right other than Rights that
were or are beneficially owned by the Acquiring Person (which will thereafter
be
void) shall 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 would
have
a market value of two times the exercise price of the Right.
In
the
event that at any time any person shall become an Acquiring Person, each holder
of a Right, other than Rights that were or are beneficially owned by the
Acquiring Person (which will thereafter be void), shall thereafter have the
right to receive, upon the exercise of such Right, at the then current Purchase
Price, one share for each Right or, if the then current market price of the
Common Stock is less than the Purchase Price, that number of shares of the
Common Stock which at the time of such transaction would have a market value
equal to the Purchase Price of the Right. Alternatively, the Company may issue
or pay cash, property, other securities, or any combination thereof (“Common
Stock Equivalents”) having an aggregate value equal to the shares of Common
Stock that would otherwise have been issuable on exercise of a
Right.
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 shares will be issued and, in lieu thereof, an adjustment
in cash will be made based on the market price of the Common Stock on the last
trading date prior to the date of exercise. No Rights may be exercised that
would entitle the holder thereof to any fractional share greater than one-half
of a share unless concurrently therewith such holder purchases an additional
fraction of a share which, when added to the number of shares to be received
upon such exercise, equals an integral number of shares.
At
any
time prior to 5:00 P.M. New York time on the earlier of (i) the tenth
day following the date of a public announcement that a person or group of
affiliated or associated persons has acquired beneficial ownership of 15% or
more of the outstanding shares of the Common Stock of the Company or such later
date as may be determined by action of a majority of the members of the Board
of
Directors then in office and publicly announced by the Company or (ii) June
5,
2013, the Board of Directors of the Company may redeem the Rights in whole,
but
not in part, at a price of $.0001 per Right (the “Redemption Price”).
Immediately upon the action of the Board of Directors of the Company electing
to
redeem the Rights, the Company shall make announcement thereof, and upon such
election, the right to exercise the Rights will terminate and the only right
of
the holders of Rights will be to receive the Redemption Price.
B
-
2
Until
a
Right is exercised, the holder thereof, as such, will have no rights as a
shareholder of the Company, including without limitation, the right to vote
or
to receive dividends.
The
provisions of the Rights Agreement may be amended by the Board of Directors
in
order to cure any ambiguity or correct any defect or inconsistency and by the
Continuing Directors, prior to the Distribution Date, to make changes deemed
to
be in the best interests of the holders of the Rights or after the Distribution
Date, to make such other changes which do not adversely affect the interest
of
the holders of the Rights (excluding the interests of any Acquiring Person
and
its Affiliates and Associates).
A
copy of
the Rights Agreement, as amended, has been filed with the Securities and
Exchange Commission as an Exhibit to a Current Report on Form 8-K
dated June 6, 2008. 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
