AVIS BUDGET GROUP, INC. and MELLON INVESTOR SERVICES LLC as Rights Agent Amended and Restated Rights Agreement Dated as of September 1, 2006
Exhibit
4.1
and
MELLON
INVESTOR SERVICES LLC
as
Rights
Agent
Amended
and Restated
Dated
as
of September 1, 2006
TABLE
OF CONTENTS
Page
|
|||||
Section
1.
|
Certain
Definitions
|
1
|
|||
Section
2.
|
Appointment
of Rights Agent
|
6
|
|||
Section
3.
|
Issuance
of Rights Certificates
|
7
|
|||
Section
4.
|
Form
of Rights Certificates
|
10
|
|||
Section
5.
|
Countersignature
and Registration
|
11
|
|||
Section
6.
|
Transfer,
Split-Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates
|
11
|
|||
Section
7.
|
Exercise
of Rights; Purchase Price; Expiration Date of Rights
|
12
|
|||
Section
8.
|
Cancellation
and Destruction of Rights Certificates
|
14
|
|||
Section
9.
|
Reservation
and Availability of Capital Stock
|
14
|
|||
Section
10.
|
Preferred
Stock Record Date
|
16
|
|||
Section
11.
|
Adjustment
of Purchase Price, Number and Kind of Shares or Number of
Rights
|
16
|
|||
Section
12.
|
Certificate
of Adjusted Purchase Price or Number of Shares
|
24
|
|||
Section
13.
|
Consolidation,
Merger or Sale or Transfer of Assets, Cash Flow or Earning
Power
|
25
|
|||
Section
14.
|
Fractional
Rights and Fractional Shares
|
27
|
|||
Section
15.
|
Rights
of Action
|
28
|
|||
Section
16.
|
Agreement
of Rights Holders
|
29
|
|||
Section
17.
|
Rights
Certificate Holder Not Deemed a Stockholder
|
29
|
|||
Section
18.
|
Concerning
the Rights Agent
|
30
|
|||
Section
19.
|
Merger
or Consolidation or Change of Name of Rights Agent
|
30
|
|||
Section
20.
|
Duties
of Rights Agent
|
31
|
|||
Section
21.
|
Change
of Rights Agent
|
33
|
|||
Section
22.
|
Issuance
of New Rights Certificates
|
34
|
|||
Section
23.
|
Redemption
and Termination
|
34
|
|||
Section
24.
|
Exchange
|
35
|
|||
Section
25.
|
Notice
of Certain Events
|
36
|
|||
Section
26.
|
Notices
|
37
|
|||
Section
27.
|
Supplements
and Amendments
|
38
|
|||
Section
28.
|
Successors
|
38
|
|||
Section
29.
|
Determinations
and Actions by the Board of Directors, etc
|
38
|
|||
Section
30.
|
Benefits
of this Agreement
|
39
|
|||
Section
31.
|
Severability
|
39
|
|||
Section
32.
|
Governing
Law
|
39
|
|||
Section
33.
|
Counterparts
|
39
|
|||
Section
34.
|
Descriptive
Headings
|
39
|
i
EXHIBITS
Exhibit
A
|
--
|
Form
of Certificate of Designation, Preferences and Rights
of
Series A Junior Participating Preferred Stock
|
|
Exhibit
B
|
--
|
Form
of Rights Certificate
|
|
Exhibit
C
|
--
|
Form
of Summary of Rights
|
ii
AMENDED
AND RESTATED RIGHTS
AGREEMENT
AMENDED
AND RESTATED RIGHTS AGREEMENT, dated as of September 1, 2006 (this "Agreement"),
between Avis Budget Group, Inc., a Delaware corporation (the "Company"), and
Mellon Investor Services LLC, a New Jersey limited liability company (the
"Rights Agent").
W
I T
N E S S E T H:
WHEREAS,
on July 13, 2006 (the "Rights Dividend Declaration Date"), the Board of
Directors of the Company (the "Board") authorized and declared a dividend
distribution of one Right (as hereinafter defined) for each share of Common
Stock, par value $0.01 per share, of the Company (the "Common Stock")
outstanding at the close of business on July 21, 2006 (the "Record Date"),
and
has authorized the issuance of one Right (as such number may hereinafter be
adjusted pursuant to the provisions of Section 11(p) hereof) for each share
of
Common Stock issued between the Record Date (whether originally issued or
delivered from the Company's treasury) and the Distribution Date (as hereinafter
defined), each Right initially representing the right to purchase one
one-thousandth of a share of Series A Junior Participating Preferred Stock
of
the Company (the "Preferred Stock") having the rights, powers and preferences
set forth in the form of Certificate of Designation, Preferences and Rights
attached hereto as Exhibit A, upon the terms and subject to the conditions
hereinafter set forth (the "Rights").
NOW,
THEREFORE, in consideration of the premises and the mutual agreements herein
set
forth, the parties hereby agree as follows:
Section
1. Certain
Definitions
1.1.
For purposes of this Agreement, the following terms have the meanings
indicated:
(a) "Acquiring
Person" shall mean any Person who or which, together with all Affiliates and
Associates of such Person, shall be the Beneficial Owner of fifteen
percent (15%) or more of the shares of Common Stock then outstanding, but shall
not include (i) the Company, (ii) any Subsidiary of the Company, (iii) any
employee benefit plan of the Company, or of any Subsidiary of the Company,
or
any Person or entity organized, appointed or established by the Company for
or
pursuant to the terms of any such plan, (iv) any Person who becomes the
Beneficial Owner of fifteen percent (15%) or more of the shares of Common Stock
then outstanding as a result of a reduction in the number of shares of Common
Stock outstanding due to the repurchase of shares of Common Stock by the Company
unless and until such Person, after becoming aware that such Person has become
the Beneficial Owner of fifteen percent (15%) or more of the then outstanding
shares of Common Stock, acquires beneficial ownership of additional shares
of
Common Stock representing one-half of one percent (0.5%) or more of the shares
of Common Stock then outstanding or (v) any such Person who has reported or
is
required to report such ownership on Schedule 13G under the Exchange Act (or
any
comparable or successor report) or on Schedule 13D under the Exchange Act (or
any comparable or successor report) which Schedule 13D does not state any
intention to or reserve the right to control or
1
influence
the management or policies of the Company or engage in any of the actions
specified in Item 4 of such schedule (other than the disposition of the Common
Stock), who inadvertently becomes the Beneficial Owner of fifteen percent (15%)
or more of the shares of Common Stock then outstanding (but less than twenty
percent (20%)) and, within 10 Business Days of being requested by the Company
to
advise it regarding the same, certifies to the Company that such Person acquired
shares of Common Stock in excess of 14.9% inadvertently or without knowledge
of
the terms of the Rights and who or which, together with all Affiliates and
Associates, thereafter does not acquire additional shares of Common Stock while
the Beneficial Owner of fifteen percent (15%) or more of the shares of Common
Stock then outstanding; provided,
however,
that if
the Person requested to so certify fails to do so within 10 Business Days or
breaches or violates such certification, then such Person shall become an
Acquiring Person immediately after such 10 Business Day period or such breach
or
violation.
(b) "Act"
shall mean the Securities Act of 1933, as amended.
(c) "Affiliate"
and "Associate" shall have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under the Exchange
Act.
(d) "Agreement"
shall mean this Agreement as it may from time to time be supplemented, amended,
renewed, restated or extended pursuant to the applicable provisions
hereof.
(e) 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, directly or
indirectly, owns or has the right to acquire (whether such right is exercisable
immediately or only after the passage of time or upon the satisfaction of one
or
more conditions (whether or not within the control of such Person),
compliance with regulatory requirements or otherwise) pursuant to any agreement,
arrangement or understanding (whether or not in writing) or upon the exercise
of
conversion rights, exchange rights, other rights, warrants or options, or
otherwise; provided,
however,
that a
Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own,"
(A) securities tendered pursuant to a tender or exchange offer made by such
Person or any of such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (B) securities issuable upon
exercise of Rights at any time prior to the occurrence of a Triggering Event
(as
hereinafter defined), or (C) securities issuable upon exercise of Rights from
and after the occurrence of a Triggering Event which Rights were acquired by
such Person or any of such Person's Affiliates or Associates prior to the
Distribution Date (as hereinafter defined) or pursuant to Section 3(a) or
Section 22 hereof (the "Original Rights") or pursuant to Section
2
11(i)
hereof in connection with an adjustment made with respect to any Original
Rights;
(ii) which
such Person or any of such Person's Affiliates or Associates, directly or
indirectly, has the right to vote or dispose of or has "beneficial ownership"
of
(as determined pursuant to Rule 13d-3 of the General Rules and Regulations
under
the Exchange Act), including pursuant to any agreement, arrangement or
understanding, whether or not in writing; provided,
however,
that a
Person shall not be deemed the "Beneficial Owner" of, or to "beneficially own,"
any security under this subparagraph (ii) as a result of an agreement,
arrangement or understanding (whether or not in writing) to vote such security
if such agreement, arrangement or understanding: (A) arises solely from a
revocable proxy given in response to a public proxy or consent solicitation
made
pursuant to, and in accordance with, the applicable provisions of the General
Rules and Regulations under the Exchange Act, and (B) is not reportable by
such
Person on Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which
are
beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of acquiring, holding, voting
(except pursuant to a revocable proxy as described in the proviso to
subparagraph (ii) of this paragraph (e)) or disposing of any voting securities
of the Company; provided,
however,
that
nothing in this paragraph (e) shall cause a Person engaged in business as an
underwriter of securities to be the "Beneficial Owner" of, or to "beneficially
own," any securities acquired through such Person's participation in good faith
in a firm commitment underwriting until the expiration of forty days after
the
date of such acquisition, and then only if such securities continue to be owned
by such Person at such expiration of forty days.
(f) "Board"
shall have the meaning set forth in the preamble to this Agreement.
(g) "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.
(h) "Close
of
Business" on any given date shall mean 5:00 P.M., New York City time, on such
date; provided,
however,
that if
such date is not a Business Day, it shall mean 5:00 P.M., New York City time,
on
the next succeeding Business Day.
3
(i) "Common
Stock" shall mean the Common Stock, par value $0.01 per share, of the Company
or
any other shares of capital stock of the Company into which such stock shall
be
reclassified or changed, except that "Common Stock" when used with reference
to
any Person other than the Company shall mean the capital stock of such Person
with the greatest voting power, or the equity securities or other equity
interest having power to control or direct the management, of such
Person.
(j) "Common
Stock Equivalents" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(k) "Company"
shall
have the meaning set forth in the preamble to this Agreement until a successor
corporation or entity shall have become such or until a Principal Party (as
hereinafter defined) shall assume, and thereafter be liable for, all obligations
and duties of the Company hereunder pursuant to the applicable provisions of
this Agreement, and thereafter, "Company" shall mean such successor or Principal
Party, respectively.
(l) "Current
Market Price" shall have the meaning set forth in Section 11(d)(i)
hereof.
(m) "Current
Value" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(n) "Distribution
Date" shall have the meaning set forth in Section 3(a) hereof.
(o) "Equivalent
Preferred Stock" shall have the meaning set forth in Section 11(b)
hereof.
(p) "Exchange
Act" shall mean the Securities Exchange Act of 1934, as amended.
(q) "Exchange
Ratio" shall have the meaning set forth in Section 24 hereof.
(r) "Expiration
Date" shall have the meaning set forth in Section 7(a) hereof.
(s)
"Final
Expiration Date" shall mean the date upon which the Rights expire and shall
be
the earlier of (i) 5:00 P.M., New York City time, on the date that the votes
of
4
the
Company's stockholders, with respect to the Company's 2008 annual meeting of
stockholders, are certified, unless the continuation of the Rights is approved
by the stockholders of the Company by a vote of the majority of the shares
present and entitled to vote at a stockholders meeting at the Company's 2008
annual meeting of stockholders (in which case clause (ii) shall govern) or
(ii)
5:00 P.M., New York City time on July 13, 2016, in each case, unless the Rights
are previously redeemed, exchanged or terminated.
(t) "Person"
shall mean any individual, firm, corporation, partnership, limited liability
company, trust, association, syndicate or other entity and includes, without
limitation, an unincorporated group of persons who, by formal or informal
agreement or arrangement (whether or not in writing), have embarked on a common
purpose or act.
(u) "Preferred
Stock" shall mean shares of Series A Junior Participating Preferred Stock,
par
value $0.01, of the Company, and, to the extent that there are not a sufficient
number of shares of Series A Junior Participating Preferred Stock authorized
to
permit the full exercise of the Rights, any other series of preferred stock
of
the Company designated for such purpose containing terms substantially similar
to the terms of the Series A Junior Participating Preferred Stock.
(v) "Principal
Party" shall have the meaning set forth in Section 13(b) hereof.
(w) "Purchase
Price" shall have the meaning set forth in Section 4(a) hereof.
(x) "Record
Date" shall have the meaning set forth in the preamble of this
Agreement.
(y) "Redemption
Price" shall have the meaning set forth in Section 23(a) hereof.
(z) "Rights"
shall have the meaning set forth in the preamble of this Agreement.
(aa) "Rights
Agent" shall have the meaning set forth in the preamble of this
Agreement.
(bb) "Rights
Certificate" shall have the meaning set forth in Section 3(a)
hereof.
5
(cc) "Rights
Dividend Declaration Date" shall have the meaning set forth in the preamble
of
this Agreement.
(dd) "Section
11(a)(ii) Event" shall mean any event described in Section 11(a)(ii)
hereof.
(ee) "Section
11(a)(ii) Trigger Date" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(ff) "Section
13 Event" shall mean any event described in clauses (x), (y) or (z) of Section
13(a) hereof.
(gg) "Spread"
shall have the meaning set forth in Section 11(a)(iii) hereof.
(hh) "Stock
Acquisition Date" shall mean the first date of public announcement (which,
for
purposes of this definition, shall include, without limitation, a report filed
or amended pursuant to Section 13(d) under the Exchange Act) by the Company
or
an Acquiring Person that an Acquiring Person has become such.
(ii) "Subsidiary"
shall mean, with reference to any Person, any corporation or other entity of
which an amount of securities or other ownership interest having ordinary voting
power sufficient to elect at least a majority of the directors or other Persons
having similar functions of such corporation or other entity are at the time,
directly or indirectly, beneficially owned, or otherwise controlled by such
Person.
(jj) "Substitution
Period" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(kk) "Summary
of Rights" shall have the meaning set forth in Section 3(b) hereof.
(ll) "Trading
Day" shall have the meaning set forth in Section 11(d)(i) hereof.
(mm) "Triggering
Event" shall mean any Section 11(a)(ii) Event or any Section 13
Event.
Section
2. Appointment
of Rights Agent
6
2.1.
The Company hereby appoints the Rights Agent to act as rights 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. Issuance
of Rights Certificates.
(a) Until
the
earlier of (i) the Close of Business on the tenth Business Day (or such
specified or unspecified later date as may be determined by the Board before
the
occurrence of the Distribution Date) after the Stock Acquisition Date (or,
if
the tenth Business Day (or such later date) after the Stock Acquisition Date
occurs before the Record Date, the Close of Business on the Record Date), or
(ii) the close of business on the tenth Business Day (or such specified or
unspecified later date as may be determined by the Board before the occurrence
of the Distribution Date) after the date that a tender or exchange offer 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
or entity organized, appointed or established by the Company for or pursuant
to
the terms of any such plan) is first published or sent or given within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the Exchange
Act, if, upon consummation thereof, such Person would become an Acquiring Person
(the earlier of (i) and (ii) being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the provisions of paragraph
(b) or (c) of this Section 3) by the balances
indicated in the book-entry account system of the transfer agent for the Common
Stock registered in the names of the holders of the Common Stock (which shares
of Common Stock shall also be deemed to represent certificates for Rights)
or,
in the case of certificated shares, the certificates for the Common Stock
registered in the names of the holders of the Common Stock (which certificates
for Common Stock shall also be deemed to be certificates for Rights), and not
by
separate certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock (including
a transfer to the Company). As soon as practicable after the Distribution Date,
the Rights Agent will send by first-class, insured, postage-prepaid mail, to
each record holder of the 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, one or more rights certificates, in substantially the form of Exhibit
B
hereto (the "Rights Certificates"), evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided herein. In the event
that an adjustment in the number of Rights per share of Common Stock has been
made pursuant to Section 11(p) hereof, at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and
cash
is paid in lieu of any fractional Rights. As of and after the Distribution
Date,
the Rights will be evidenced solely by such Rights Certificates. The Company
shall promptly notify the Rights Agent in writing upon the occurrence of the
Distribution Date. Until such notice is received by the Rights Agent, the Rights
Agent may presume conclusively for all purposes that the Distribution Date
has
not occurred.
7
(b) The
Company will make available, as promptly as practicable following the Record
Date, a copy of a Summary of Rights, in substantially the form attached hereto
as Exhibit C (the "Summary of Rights") to any holder of Rights who may so
request from time to time prior to the Expiration Date. With respect to the
Common Stock outstanding as of the Record Date, or issued subsequent to the
Record Date, unless and until the Distribution Date shall occur, the Rights
will
be evidenced by the balances indicated in the book-entry account system of
the
transfer agent for the Common Stock or, in the case of certificated shares,
such
certificates for the Common Stock, and the registered holders of the Common
Stock shall also be the registered holders of the associated Rights. Until
the
earlier of the Distribution Date or the Expiration Date, the transfer of any
shares of Common Stock in respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with such shares of Common
Stock.
(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 earlier of the Distribution Date or the Expiration Date and
shall bear the following legends:
(i) Confirmation
and account statements sent to holders of shares of Common Stock in book-entry
form (which shares of Common Stock shall also be deemed to represent
certificates for Rights) shall bear the following legend:
The
shares of Common Stock, par value $0.01 per share, of Avis Budget Group, Inc.
(the "Company") entitles the holder hereof to certain Rights as set forth in
the
Amended and Restated Rights Agreement between the Company and the Rights Agent
thereunder (the "Rights Agent") dated as of September 1, 2006, as it may be
amended, restated, renewed or extended from time to time (the "Rights
Agreement"), the terms of which are hereby incorporated herein by reference
and
a copy of which is on file at the principal offices of the Rights Agent. 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 the shares
to which this statement relates. The Rights Agent will mail to the holder of
shares to which this statement relates a copy of the Rights Agreement, as in
effect on the date of mailing, without charge, promptly after receipt of a
written request therefor. Under certain circumstances set forth in the Rights
Agreement, Rights beneficially owned (as such term is defined in the Rights
Agreement) by any Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate thereof (as such terms are defined in the Rights
Agreement), whether currently held by or on behalf of such Person or by any
subsequent holder, may become null and void.
8
With
respect to shares of Common Stock in book-entry form for which there has been
sent a confirmation or account statement containing the foregoing legend, until
the earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such shares of Common Stock
shall be evidenced by such shares of Common Stock alone and registered holders
of Common Stock shall also be the registered holders of the associated Rights,
and the transfer of any of such shares of Common Stock shall also constitute
the
transfer of the Rights associated with such shares of Common Stock.
(ii) In
the
case of certificated shares, certificates representing shares of Common Stock
(which certificates shall also be deemed to be certificates for Rights) shall
bear the following legend if such certificates are issued after the Record
Date
but prior to the earlier of the Distribution Date or the Expiration Date:
This
certificate also evidences and entitles the holder hereof to certain Rights
as
set forth in the Amended and Restated Rights Agreement between Avis Budget
Group, Inc. (the "Company") and the Rights Agent thereunder (the "Rights Agent")
dated as of September 1, 2006, as it may be amended, restated, renewed or
extended from time to time (the "Rights Agreement"), the terms of which are
hereby incorporated herein by reference and a copy of which is on file at the
principal offices of the Rights Agent. 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. The Rights Agent 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. Under certain circumstances set forth in the Rights Agreement,
Rights beneficially owned (as such term is defined in the Rights Agreement)
by
any Person who is, was or becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any subsequent holder,
may
become null and void.
With
respect to such certificates containing the foregoing legend, until the earlier
of (i) the Distribution Date or (ii) the Expiration Date, the Rights associated
with the Common Stock represented by such certificates shall be evidenced by
such certificates alone and registered holders of Common Stock shall also be
the
registered holders of the associated Rights, and the transfer of any of such
certificates shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates.
9
Section
4. Form
of Rights Certificates.
(a) The
Rights Certificates (and the forms of election to purchase and of assignment
to
be printed on the reverse thereof) shall each be substantially in the form
set
forth in Exhibit B hereto and may have such marks of identification or
designation and such legends, summaries or endorsements printed thereon as
the
Company may deem appropriate and as are not inconsistent with the provisions
of
this Agreement, or as may be required to comply with any applicable law or
with
any rule or regulation made pursuant thereto or with any rule or regulation
of
any stock exchange on which the Rights may from time to time be listed, or
to
conform to usage. Subject to the provisions of Section 11 and Section 22 hereof,
the Rights Certificates, whenever distributed, shall be dated as of the Record
Date and on their face shall entitle the holders thereof to purchase such number
of one one-thousandths of a share of Preferred Stock as shall be set forth
therein at the price set forth therein (such exercise price per one
one-thousandth of a share, the "Purchase Price"), but the amount and type of
securities purchasable upon the exercise of each Right and the Purchase Price
thereof shall be subject to adjustment as provided herein.
(b) Any
Rights Certificate issued pursuant to Section 3(a), Section 11(i) or Section
22
hereof that represents 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 such Acquiring Person has any
continuing agreement, arrangement or understanding (whether or not in writing)
regarding the transferred Rights or (B) a transfer which the Board, in its
sole
discretion, has determined is part of a plan, arrangement or understanding
which
has as a primary purpose or effect the avoidance of Section 7(e) hereof, and
any
Rights Certificate issued pursuant to Section 6 or Section 11 hereof upon
transfer, exchange, replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent feasible) the
following legend:
The
Rights represented by this Rights Certificate are or were beneficially owned
by
a Person who was or became an Acquiring Person or an Affiliate or Associate
of
an Acquiring Person (as such terms are defined in the Rights Agreement).
Accordingly, this Rights Certificate and the Rights represented hereby may
become null and void in the circumstances specified in Section 7(e) of the
Rights Agreement.
10
Section
5. Countersignature
and Registration .
(a) The
Rights Certificates shall be executed on behalf of the Company by its Chairman
of the Board, its
Chief
Executive Officer, its President or any Vice President (or more senior officer)
of the Company, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Rights Certificates shall be
countersigned by the Rights Agent, either manually or by facsimile signature
and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Rights Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and delivered
by the Company with the same force and effect as though the person who signed
such Rights Certificates had not ceased to be such officer of the Company;
and
any Rights Certificates may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Rights Certificate, shall
be a
proper officer of the Company to sign such Rights Certificate, although at
the
date of the execution of this Rights Agreement any such person was not such
an
officer.
(b) Following
the Distribution Date, the Rights Agent will keep, or cause to be kept, at
its
principal office or offices designated as the appropriate place for surrender
of
Rights Certificates upon exercise or transfer, books for registration and
transfer of the Rights Certificates issued hereunder. Such books shall show
the
names and addresses of the respective holders of the Rights Certificates, the
number of Rights evidenced on its face by each of the Rights Certificates and
the date of each of the Rights Certificates.
Section
6. Transfer,
Split-Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed,
Lost or Stolen Rights Certificates.
(a) Subject
to the provisions of Section 4(b), Section 7(e) and Section 14 hereof, at any
time after the Close of Business on the Distribution Date, and at or prior
to
the Close of Business on the Expiration Date, any Rights Certificate or
Certificates (other than Rights Certificates representing Rights that may have
been exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Rights Certificate or Certificates, entitling
the registered holder to purchase a like number of one one-thousandths of a
share of Preferred Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitles such holder (or former holder in
the
case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates shall
make
such request in writing delivered to the Rights Agent, and shall surrender
the
Rights Certificate or Certificates to be transferred, split up, combined or
exchanged at the principal office or offices of the Rights Agent designated
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
11
such
surrendered Rights Certificate until the registered holder shall have completed
and signed the certificate contained in the form of assignment on the reverse
side of such Rights Certificate 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 Section 4(b), Section 7(e), Section
14 hereof and Section 24 hereof, countersign and deliver to the Person entitled
thereto a Rights Certificate or Rights Certificates, as the case may be, as
so
requested. The Company may require payment from the holder of a Rights
Certificate 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
Rights 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 Rights 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 Rights Certificate, if mutilated, the Company
will
execute and deliver a new Rights Certificate of like tenor to the Rights Agent
for countersignature and delivery to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
Section
7. Exercise
of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject
to Section 7(e) hereof, at any time after the Distribution Date the registered
holder of any Rights Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Section 9(c), Section 11(a)(iii)
and
Section 23(a) hereof) in whole or in part upon surrender of the Rights
Certificate, with the form of election to purchase and the certificate on the
reverse side thereof duly executed, to the Rights Agent at the principal office
or offices of the Rights Agent designated for such purpose, together with
payment of the aggregate Purchase Price with respect to the total number of
one
one-thousandths of a share of Preferred Stock (or other securities, cash or
other assets, as the case may be) as to which such surrendered Rights are then
exercisable,
at
or prior to the earlier of (i) the Final Expiration Date or (ii) the time at
which the Rights are redeemed or exchanged as provided in Section 23 and Section
24 hereof (the earlier of (i) and (ii) being herein referred to as the
"Expiration Date").
(b) The
Purchase Price for each one one-thousandth of a share of Preferred Stock
pursuant to the exercise of a Right initially shall be $80, shall be subject
to
adjustment from time to time as provided in Sections 11 and 13(a) hereof and
shall be payable in accordance with paragraph (c) below.
(c) Upon
receipt of a Rights Certificate representing exercisable Rights, with the form
of election to purchase and the certificate duly executed, accompanied by
payment, with respect to each Right so exercised, of the Purchase Price per
one
one-thousandth of a share
12
of
Preferred Stock (or other shares, securities, cash or other assets, as the
case
may be) to be purchased as set forth below and an amount equal to any applicable
transfer tax, the Rights Agent shall, subject to Sections 7(f) and 20(k) hereof,
thereupon promptly (i) (A) requisition from any transfer agent of the shares
of
Preferred Stock (or make available, if the Rights Agent is the transfer agent
for such shares) certificates for the total number of one one-thousandths of
a
share of Preferred Stock to be purchased and the Company hereby irrevocably
authorizes its transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of shares of Preferred
Stock issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one one-thousandths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred Stock
represented by such receipts shall be deposited by the transfer agent with
the
depositary agent) and the Company will direct the depositary agent to comply
with such request, (ii) requisition from the Company the amount of cash, if
any,
to be paid in lieu of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts, cause the
same
to be delivered to or, upon the order of the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, and (iv) after receipt thereof, deliver such cash, if any, to or upon
the order of the registered holder of such Rights Certificate. The payment
of
the Purchase Price (as such amount may be reduced pursuant to Section 11(a)(iii)
hereof) shall be made in cash or by certified bank check or bank draft payable
to the order of the Company. In the event that the Company is obligated to
issue
other securities (including Common Stock) 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. The Company reserves the right to require prior to the occurrence
of a Triggering Event that, upon any exercise of Rights, a number of Rights
be
exercised so that only whole shares of Preferred Stock would be
issued.
(d) In
case
the registered holder of any Rights Certificate shall exercise less than all
the
Rights evidenced thereby, a new Rights Certificate evidencing the Rights
remaining unexercised shall be issued by the Rights Agent and delivered to,
or
upon the order of, the registered holder of such Rights Certificate, registered
in such name or names as may be designated by such holder, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding
anything in this Agreement to the contrary, from and after the first occurrence
of a Section 11(a)(ii) Event, any Rights beneficially owned by (i) an Acquiring
Person or an 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 (whether or not in writing)
regarding the transferred Rights or (B) a transfer which the Board of Directors
of the Company has determined is part of a plan,
13
arrangement
or understanding which has as a primary purpose or effect the avoidance of
this
Section 7(e), shall become null and void without any further action and no
holder of such Rights shall have any rights whatsoever with respect to such
Rights, whether under any provision of this Agreement or otherwise. 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 Rights Certificates or any other Person as a result of its failure
to make any determinations with respect to an Acquiring Person or any of 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 Rights Certificate surrendered for such exercise, and (ii)
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates of such Beneficial Owner
as
the Company shall reasonably request.
Section
8. Cancellation
and Destruction of Rights Certificates.
All
Rights Certificates surrendered for the purpose of exercise, transfer, split-up,
combination or exchange shall, if surrendered to the Company or 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 Rights
Certificates shall be issued in lieu thereof except as expressly permitted
by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel
and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section
9. Reservation
and Availability of Capital Stock.
(a) The
Company covenants and agrees that it will cause to be reserved and kept
available out of its authorized and unissued shares of Preferred Stock (and,
following the occurrence of a Triggering Event, out of its authorized and
unissued shares of Common Stock and/or other securities or out of its authorized
and issued shares held in its treasury), the number of shares of Preferred
Stock
(and, following the occurrence of a Triggering Event, Common Stock and/or other
securities) that, as provided in this Agreement including Section 11(a)(iii)
hereof, will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) So
long
as the shares of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) issuable and deliverable upon
the
exercise of the Rights may be listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such time as the
Rights become
14
exercisable,
all shares reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) The
Company shall use its best efforts to (i) file, as soon as practicable following
the earliest date after the first occurrence of a Section 11(a)(ii) Event on
which the consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with Section 11(a)(iii) hereof, a
registration statement under the Act, with respect to 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 earlier of (A)
the
date as of which the Rights are no longer exercisable for such securities,
and
(B) the date of the expiration of the Rights. The Company will also take such
action as may be appropriate under, or to ensure compliance with, the securities
or "blue sky" laws of the various states in connection with the exercisability
of the Rights. The Company may temporarily suspend, for a period of time not
to
exceed ninety (90) days after the date set forth in clause (i) of the first
sentence of this Section 9(c), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become effective.
Upon any such suspension, the Company shall issue a public announcement stating
that the exercisability of the Rights has been temporarily suspended, as well
as
a public announcement at such time as the suspension has been rescinded. In
addition, if the Company shall determine that a registration statement is
required following the Distribution Date, the Company may temporarily suspend
the exercisability of the Rights until such time as a registration statement
has
been declared effective. Notwithstanding any provision of this Agreement to
the
contrary, the Rights shall not be exercisable in any jurisdiction if the
requisite qualification in such jurisdiction shall not have been obtained,
the
exercise thereof shall not be permitted under applicable law, or a registration
statement shall not have been declared effective.
(d) The
Company covenants and agrees that it will take all such action as may be
necessary to ensure that all one one-thousandths of a share of Preferred Stock
(and, following the occurrence of a Triggering Event, Common Stock and/or other
securities) 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 Rights Certificates
and of any certificates for a number of one one-thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, however, be required to
pay
any transfer tax which may be payable in respect of any transfer or delivery
of
Rights Certificates to a Person other than, or the issuance or delivery of
a
number of one one-thousandths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in respect of a name other than
that of the registered holder of the Rights Certificates evidencing Rights
surrendered for exercise, nor shall the Company be required to issue or deliver
15
any
certificates (or make any entries in the book-entry account system of the
transfer agent) for a number of one one-thousandths of a share of Preferred
Stock (or Common Stock and/or other securities, as the case may be) in a name
other than that of the registered holder upon the exercise of any Rights until
such tax shall have been paid (any such tax being payable by the holder of
such
Rights Certificates at the time of surrender) or until it has been established
to the Company's satisfaction that no such tax is due.
Section
10. Preferred
Stock Record Date.
Each
person in whose name any certificate or entry in the book-entry account system
of the transfer agent for a number of one one-thousandths of a share of
Preferred Stock (or Common Stock and/or other securities, as the case may be)
is
issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such fractional shares of Preferred Stock (or
Common Stock and/or other securities, as the case may be) represented thereby
on, and such certificate or entry in the book-entry account system shall be
dated, the date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and all applicable transfer
taxes) was made; provided,
however,
that if
the date of such surrender and payment is a date upon which the Preferred Stock
(or Common Stock and/or other securities, as the case may be) transfer books
of
the Company are closed, such Person shall be deemed to have become the record
holder of such shares (fractional or otherwise) on, and such certificate or
entry in the book-entry account system shall be dated, the next succeeding
Business Day on which the Preferred Stock (or Common Stock and/or other
securities, as the case may be) transfer books of the Company are open. Prior
to
the exercise of the Rights evidenced thereby, the holder of a Rights Certificate
shall not be entitled to any rights of a stockholder of the Company with respect
to shares for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions
or to
exercise any preemptive rights, and shall not be entitled to receive any notice
of any proceedings of the Company, except as provided herein.
Section
11. Adjustment
of Purchase Price, Number and Kind of Shares or Number of Rights.
The
Purchase Price, the number and kind of shares covered by each Right and the
number of Rights outstanding are subject to adjustment from time to time as
provided in this Section 11.
(a)(i) In
the
event the Company shall at any time after the date of this Agreement (A) declare
a dividend on the Preferred Stock payable in shares of Preferred Stock, (B)
subdivide or split the outstanding shares of Preferred Stock, (C) combine or
consolidate the outstanding shares of Preferred Stock into a smaller number
of
shares, through a reverse stock split or otherwise, or (D) issue any shares
of
its capital stock in a reclassification of the Preferred Stock (including any
such reclassification in connection with a consolidation or merger in which
the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price
in
effect at the time of the record date for such dividend or of the effective
date
of such subdivision, split, combination, consolidation or reclassification,
and
the number and kind of shares of Preferred Stock or capital stock, as the case
may be, issuable on such date, shall be proportionately adjusted so that the
holder of any Right exercised after such time shall be entitled to receive,
upon
payment of
16
the
Purchase Price then in effect, the aggregate number and kind of shares of
Preferred Stock or capital stock, as the case may be, which, if such Right
had
been exercised immediately prior to such date and at a time when the Preferred
Stock transfer books of the Company were open, such holder would have owned
upon
such exercise and been entitled to receive by virtue of such dividend,
subdivision, split, combination, consolidation or reclassification. If an event
occurs which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii) hereof, the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any adjustment required
pursuant to Section 11(a)(ii) hereof.
(ii) In
the
event any Person shall, at any time after the Rights Dividend Declaration Date,
become an Acquiring Person, unless the event causing such Person to become
an
Acquiring Person is a transaction set forth in Section 13(a) hereof, then,
promptly following the later of the occurrence of such event and the Record
Date, proper provision shall be made so that each holder of a Right (except
as
provided below and in Section 7(e) hereof) shall thereafter have the right
to
receive, upon exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of a number of one one-thousandths
of
a share of Preferred Stock, 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 one one-thousandths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the first occurrence
of a
Section 11(a)(ii) Event, and (y) dividing that product (which, following such
first occurrence, shall thereafter be referred to as the "Purchase Price" for
each Right and for all purposes of this Agreement) by 50% of the Current Market
Price (determined pursuant to Section 11(d) hereof) per share of Common Stock
on
the date of such first occurrence (such number of shares, the "Adjustment
Shares").
(iii) In
the
event that the number of treasury shares and shares of Common Stock which are
authorized by the Company's Amended and Restated Certificate of Incorporation,
as amended, but not outstanding or reserved for issuance for purposes other
than
upon exercise of the Rights, is not sufficient to permit the exercise in full
of
the Rights in accordance with the foregoing subparagraph (ii) of this Section
11(a), the Company shall (A) determine the value of the Adjustment Shares
issuable upon the exercise of a Right (the "Current Value"), and (B) with
respect to each Right (subject to Section 7(e) hereof), make adequate provision
to substitute for the Adjustment Shares, upon the exercise of a Right and
payment of the applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred stock,
such as the Preferred Stock, which the Board has deemed to have essentially
the
same value or economic rights as shares of Common Stock (such shares of
preferred stock being referred to as "Common Stock Equivalents")), (4)
17
debt
securities of the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value equal to the Current Value (less the amount
of any reduction in the Purchase Price), where such aggregate value has been
determined by the Board based upon the advice of a nationally recognized
investment banking firm selected by the Board; provided,
however,
that if
the Company shall not have made adequate provision to deliver value pursuant
to
clause (B) above within thirty (30) days following the later of (x) the first
occurrence of a Section 11(a)(ii) Event and (y) the date on which the Company's
right of redemption pursuant to Section 23(a) expires (the later of (x) and
(y)
being referred to herein as the "Section 11(a)(ii) Trigger Date"), then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right and without requiring payment of the Purchase Price, shares of Common
Stock (to the extent available) and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. For purposes of the
preceding sentence, the term "Spread" shall mean the excess of (i) the Current
Value over (ii) the Purchase Price. If the Board determines in good faith that
it is likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the thirty (30)
day
period set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek stockholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be extended, is herein
called the "Substitution Period"). To the extent that the Company determines
that action should be taken pursuant to the first and/or third sentences of
this
Section 11(a)(iii), the Company (1) shall provide, subject to Section 7(e)
hereof, that such action shall apply uniformly to all outstanding Rights, and
(2) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek such stockholder approval for such
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue
a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this Section 11(a)(iii),
the
value of each Adjustment Share shall be the Current Market Price per share
of
the Common Stock on the Section 11(a)(ii) Trigger Date and the per share or
per
unit value of any Common Stock Equivalent shall be deemed to equal the Current
Market Price per share of the Common Stock on such date.
(b) In
case
the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Stock entitling them to subscribe for
or
purchase
(for a
period expiring within forty-five (45) calendar days after such record date)
Preferred Stock (or shares having the same rights, privileges and preferences
as
the shares of Preferred Stock ("Equivalent Preferred Stock")) or securities
convertible into Preferred Stock or Equivalent Preferred Stock at a price per
share of Preferred Stock or per share of Equivalent Preferred Stock (or having
a
conversion price per share, if a security convertible into Preferred Stock
or
Equivalent Preferred Stock) less than the Current Market Price (as determined
pursuant to
18
Section
11(d) hereof) per share of Preferred Stock 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 Preferred
Stock outstanding on such record date, plus the number of shares of Preferred
Stock which the aggregate offering price of the total number of shares of
Preferred Stock and/or Equivalent Preferred 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 Preferred Stock outstanding on such
record date, plus the number of additional shares of Preferred Stock and/or
Equivalent Preferred 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 by delivery of consideration, part
or
all of which may be in a form other than cash, the value of such consideration
shall be as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be binding on the Rights Agent and the holders of the Rights.
Shares of Preferred 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 had not been fixed.
(c) In
case
the Company shall fix a record date for a distribution to all holders of
Preferred Stock (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing corporation),
cash (other than a regular quarterly cash dividend out of the earnings or
retained earnings of the Company), assets (other than a dividend payable in
Preferred Stock, but including any dividend payable in stock other than
Preferred Stock) or evidences of indebtedness, or of subscription rights or
warrants (excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the Current Market Price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock 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 or
evidences of indebtedness so to be distributed or of such subscription rights
or
warrants applicable to a share of Preferred Stock, and the denominator of which
shall be such Current Market Price (as determined pursuant to Section 11(d)
hereof) per share of Preferred 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 be adjusted to be the
Purchase Price which would have been in effect if such record date had not
been
fixed.
(d)(i) For
the
purpose of any computation hereunder, other than computations made pursuant
to
Section 11(a)(iii) hereof, the Current Market Price per share of Common Stock
on
any date shall be deemed to be the average of the daily closing prices per
share
of such Common Stock for the thirty (30) consecutive Trading Days immediately
prior to such date, and for
19
purposes
of computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Stock on any date shall be deemed to be the average
of
the daily closing prices per share of such Common Stock for the ten (10)
consecutive Trading Days immediately following such date; provided,
however,
that in
the event that the Current Market Price per share of the Common Stock is
determined during a period following the announcement by the issuer of such
Common Stock of (A) a dividend or distribution on such Common Stock payable
in
shares of such Common Stock or securities convertible into shares of such Common
Stock (other than the Rights), or (B) any subdivision, combination,
consolidation, reverse stock split or reclassification of such Common Stock,
and
the ex-dividend date for such dividend or distribution, or the record date
for
such subdivision, combination, consolidation, reverse stock split or
reclassification shall not have occurred prior to the commencement of the
requisite thirty (30) Trading Day or ten (10) Trading Day period, as set forth
above, then, and in each such case, the Current Market Price shall be properly
adjusted to take into account ex-dividend trading. The closing price for each
day shall be the last sale price, regular way, or, in case no such sale takes
place on such day, the average of the closing bid and asked prices, regular
way,
in either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New
York
Stock Exchange or, if the shares of 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 Common Stock
are listed or admitted to trading or, if the shares of 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 the National Association
of Securities Dealers Automated Quotation System ("NASDAQ") or such other system
then in use, or, if on any such date the shares of Common Stock are not quoted
by any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common Stock
selected by the Board. 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 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 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, whose
determination shall be described in a statement filed with the Rights Agent
and
shall be conclusive for all purposes.
(ii) For
the
purpose of any computation hereunder, the Current Market Price per share of
Preferred Stock shall be determined in the same manner as set forth above for
the Common Stock in clause (i) of this Section 11(d)
20
(other
than the last sentence thereof). If the Current Market Price per share of
Preferred Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the Current Market Price per share of
Preferred Stock shall be conclusively deemed to be an amount equal to 1,000
(as
such number may be appropriately adjusted for such events as stock splits,
stock
dividends and recapitalizations with respect to the Common Stock occurring
after
the date of this Agreement) multiplied by the Current Market Price per share
of
the Common Stock. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, Current Market Price per share of the
Preferred Stock shall mean the fair value per share as determined in good faith
by the Board, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes.
(e) Anything
herein to the contrary notwithstanding, no adjustment in the Purchase Price
shall be required unless such adjustment would require an increase or decrease
of at least one percent (1%) in the Purchase Price; provided,
however,
that
any adjustments which by reason of this Section 11(e) are not required to be
made shall be carried forward and taken into account in any subsequent
adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share of Common Stock or other share
or one-millionth of a share of Preferred Stock, 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
(3) 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)(ii) or Section 13(a)
hereof, the holder of any Right thereafter exercised shall become entitled
to
receive any shares of capital stock other than Preferred Stock, thereafter
the
number of such other shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from time to time in
a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a), (b), (c), (e),
(g),
(h), (i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and
14
hereof with respect to the Preferred 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 one one-thousandths of a share of Preferred 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
21
number
of
one one-thousandths of a share of Preferred Stock (calculated to the nearest
one-millionth) obtained by (i) multiplying (x) the number of one one-thousandths
of a share covered by a Right immediately prior to this adjustment, by (y)
the
Purchase Price in effect immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The
Company may elect on or after the date of any adjustment of the Purchase Price
to adjust the number of Rights, in lieu of any adjustment in the number of
one
one-thousandths of a share of Preferred Stock purchasable upon the exercise
of a
Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of one one-thousandths of a share
of
Preferred 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
one-ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price
in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This record date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Rights
Certificates have been issued, shall be at least ten (10) days later than the
date of the public announcement. If Rights Certificates have been issued, upon
each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders
of
record of Rights Certificates on such record date Rights Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option
of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by
the
Company, new Rights Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Rights 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 Rights
Certificates on the record date specified in the public
announcement.
(j) Irrespective
of any adjustment or change in the Purchase Price or the number of one
one-thousandths of a share of Preferred Stock issuable upon the exercise of
the
Rights, the Rights Certificates theretofore and thereafter issued may continue
to express the Purchase Price per one one-thousandth of a share and the number
of one one-thousandth of a share which were expressed in the initial Rights
Certificates issued hereunder.
(k) Before
taking any action that would cause an adjustment reducing the Purchase Price
below the then stated value, if any, of the number of one one-thousandths of
a
share of Preferred 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
22
Company
may validly and legally issue fully paid and nonassessable such number of one
one-thousandths of a share of Preferred Stock at such adjusted Purchase
Price.
(l) In
any
case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company
may elect to defer until the occurrence of such event the issuance to the holder
of any Right exercised after such record date the number of one one-thousandths
of a share of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the number of one
one-thousandths of a share of Preferred 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
(fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything
in this Section 11 to the contrary notwithstanding, the Company shall be
entitled to make such reductions in the Purchase Price, in addition to those
adjustments expressly required by this Section 11, as and to the extent that
in
their good faith judgment the Board of Directors of the Company shall determine
to be advisable in order that any (i) consolidation or subdivision of the
Preferred Stock, (ii) issuance wholly for cash of any shares of Preferred Stock
at less than the Current Market Price, (iii) issuance wholly for cash of shares
of Preferred Stock or securities which by their terms are convertible into
or
exchangeable for shares of Preferred Stock, (iv) stock dividends or (v) issuance
of rights, options or warrants referred to in this Section 11, hereafter made
by
the Company to holders of its Preferred Stock shall not be taxable to such
stockholders.
(n) The
Company covenants and agrees that it shall not, at any time after the
Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary
of
the Company in a transaction which complies with Section 11(o) hereof), or
(iii)
other than pursuant to a pro rata dividend and/or distribution to all of the
then current holders of Common Stock, sell or transfer (or permit any Subsidiary
to sell or transfer), in one transaction, or a series of related transactions,
assets, cash flow 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 or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which complies with Section 11(o) hereof),
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.
23
(o) The
Company covenants and agrees that, after the Distribution Date, it will not,
except as permitted by Section 23 or Section 27 hereof, take (or permit any
Subsidiary to take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish substantially or otherwise
eliminate the benefits intended to be afforded by the Rights.
(p) Anything
in this Agreement to the contrary notwithstanding, except as provided in the
following sentence, in the event that the Company shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution Date (i) declare
a dividend on the outstanding shares of Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding shares of Common Stock, or (iii) combine
the outstanding shares of Common Stock into a smaller number of shares, through
a reverse stock split or otherwise, the number of Rights associated with each
share of Common Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted so that the
number of Rights thereafter associated with each share of Common Stock following
any such event shall equal the result obtained by multiplying the number of
Rights associated with each share of Common Stock immediately prior to such
event by a fraction the numerator which shall be the total number of shares
of
Common Stock outstanding immediately prior to the occurrence of the event and
the denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event. Notwithstanding
the foregoing, in the event that, on or prior to March 31, 2007, the Company
effects, through a reverse stock split or otherwise, a combination of the
outstanding shares of Common Stock into a smaller number of shares, there shall
not be, upon completion of such combination, any adjustment to the number of
Rights associated with each share of Common Stock outstanding
immediately after such combination as compared to the number of
Rights associated with each share of Common Stock outstanding
immediately before such combination (for the sake of clarity, it being
understood that any Rights associated with a share of Common Stock outstanding
immediately after such combination that would otherwise result in a greater
number of Rights associated with a share Common Stock outstanding immediately
after such combination as compared to such number of Rights associated with
a
share of Common Stock outstanding immediately before to such combination, shall
automatically be cancelled upon the completion of such combination without
any
action or payment of any kind). In addition, the Purchase Price and Redemption
Price per Right provided herein shall remain unchanged. For example, if,
immediately prior to completion of such combination, there were one Right (with
a Purchase Price of $80 and a Redemption Price of $.001) associated with each
outstanding share of Common Stock, then, immediately after completion of such
combination, there will be one Right (with a Purchase Price of $80 and a
Redemption Price of $.001) associated with each share of Common Stock then
outstanding.
Section
12. Certificate
of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate and (c) if
a
Distribution Date has occurred, mail a brief summary thereof to each holder
of a
Rights Certificate (or, if prior to the Distribution Date, to each holder of
a
share of Common Stock) in
24
accordance
with Section 26 hereof. The Rights Agent shall be fully protected in relying
on
any such certificate and on any adjustment therein contained.
Section
13. Consolidation,
Merger or Sale or Transfer ofAssets,
Cash
Flow or Earning Power.
(a) In
the
event that, following the Stock Acquisition Date, directly or indirectly, (x)
the Company shall consolidate with, or merge with and into, any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o) hereof), and the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (y) any Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)
hereof) shall consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such consolidation
or merger and, in connection with such consolidation or merger, all or part
of
the outstanding shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other property,
or
(z) the Company shall, other than pursuant to pro rata dividend and/or
distribution to all of the then current holders of Common Stock, sell or
otherwise transfer (or one or more of its Subsidiaries) shall sell or otherwise
transfer), in one transaction or a series of related transactions, assets,
cash
flow or earning power aggregating more than 50% of the assets, cash flow or
earning power of the Company and its Subsidiaries (taken as a whole) to any
Person or Persons (other than the Company or any Subsidiary of the Company
in
one or more transactions each of which complies with Section 11(o) hereof),
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
validly authorized and issued, fully paid, non-assessable and freely tradeable
shares of Common Stock of the Principal Party (as such term is hereinafter
defined), not subject to any liens, encumbrances, rights of first refusal or
other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then current Purchase Price by the number of one one-thousandths
of a share of Preferred Stock for which a Right is exercisable immediately
prior
to the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event
has occurred prior to the first occurrence of a Section 13 Event, multiplying
the number of such one one-thousandths of a share for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event by the Purchase Price in effect immediately prior to such first occurrence
of a Section 11(a)(ii) Event), and (2) dividing that product (which, following
the first occurrence of a Section 13 Event, shall be referred to as the
"Purchase Price" for each Right and for all purposes of this Agreement) by
50%
of the Current Market Price (determined pursuant to Section 11(d)(i) hereof)
per
share of the Common Stock of such Principal Party on the date of consummation
of
such Section 13 Event; (ii) such Principal Party shall thereafter be liable
for,
and shall assume, by virtue of such Section 13 Event, 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 only to such
Principal Party following the first occurrence of a Section 13 Event; (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 connection
with the consummation of any such transaction as may be necessary to assure
that
the provisions hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of
25
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 Section 13 Event.
(b) "Principal
Party" shall mean:
(i) in
the
case of any transaction described in clause (x) or (y) of the first sentence
of
Section 13(a) hereof, 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 such merger or consolidation; and
(ii) in
the
case of any transaction described in clause (z) of the first sentence of Section
13(a) hereof, the Person that is the party receiving the greatest portion of
the
assets, cash flow or earning power transferred pursuant to such transaction
or
transactions; provided,
however,
that in
any such case, (1) if the Common Stock of such Person is not at such time and
has not been continuously over the preceding twelve (12) month period registered
under Section 12 of the Exchange Act, and such Person is a direct or indirect
Subsidiary of another Person the Common Stock of which is and has been so
registered, "Principal Party" shall refer to such other Person; and (2) in
case
such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Stock of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such Persons is the issuer of
the
Common Stock having the greatest aggregate market value.
(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 which have not been issued or reserved for issuance to
permit the exercise in full of the Rights in accordance with this Section 13
and
unless prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent confirming
that the requirements of Section 13(a) and Section 13(b) hereof shall promptly
be performed in accordance with their terms 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 Act, with respect to the Rights
and
the securities purchasable upon exercise of the Rights on an appropriate form,
and will use its best efforts to cause such registration statement to (A) become
effective as soon as practicable after such filing and (B) remain effective
(with a prospectus at all times meeting the requirements of the Act) until
the
Expiration Date;
26
(ii) take
all
such other action as may be necessary to enable the Principal Party to issue
the
securities purchasable upon exercise of the Rights, including but not limited
to
the registration or qualification of such securities under all requisite
securities laws of jurisdictions of the various states and the listing of such
securities on such exchanges and trading markets as may be necessary or
appropriate; and
(iii) will
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 (or any successor form) under the
Exchange Act.
(d) The
provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13
Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event,
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, except prior to
the
Distribution Date as provided in Section 11(p) hereof, or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, the Company shall pay to the registered holders of the Rights
Certificates with regard to which such fractional Rights would otherwise be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For 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 of the Rights for any Trading 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. 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 shall be used.
27
(b) The
Company shall not be required to issue fractions of shares of Preferred Stock
(other than fractions which are integral multiples of one one-thousandth of
a
share of Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock). In lieu of fractional shares of Preferred Stock that are
not
integral multiples of one one-thousandth of a share of Preferred Stock, the
Company may pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the
same
fraction of the current market value of one one-thousandth of a share of
Preferred Stock. For purposes of this Section 14(b), the current market value
of
one one-thousandth of a share of Preferred Stock shall be one one-thousandth
of
the closing price of a share of Preferred Stock (as determined pursuant to
Section 11(d)(ii) hereof) for the Trading Day immediately prior to the date
of
such exercise.
(c) Following
the occurrence of a Triggering Event, the Company shall not be required to
issue
fractions of 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 Rights Certificates at the time such Rights are exercised as herein provided
an amount in cash equal to the same fraction of the current market value of
one
(1) share of Common Stock. For purposes of this Section 14(c), the current
market value of one share of Common Stock shall be the closing price per share
of Common Stock (as determined pursuant to Section 11(d)(i) hereof) on the
Trading Day immediately prior to the date of such exercise.
(d) The
holder of a Right by the acceptance of the Rights expressly waives such holder's
right to receive any fractional Rights or any fractional shares upon exercise
of
a Right, except as permitted by this Section 14.
Section
15. Rights
of Action.
All
rights of action in respect of this Agreement, excepting the rights of action
given to the Rights Agent under Section 18 hereof, are vested in the respective
registered holders of the Rights Certificates (and, prior to the Distribution
Date, the registered holders of the Common Stock); and any registered holder
of
any Rights Certificate (or, prior to the Distribution Date, of the Common
Stock), without the consent of the Rights Agent or of the holder of any other
Rights Certificate (or, prior to the Distribution Date, of the Common Stock),
may, in the holder's own behalf and for the holder's own benefit, enforce,
and
may institute and maintain any suit, action or proceeding against the Company
to
enforce, or otherwise act in respect of, the holder's right to exercise the
Rights evidenced by such Rights Certificate in the manner provided in such
Rights Certificate and in this Agreement. Without limiting the foregoing or
any
remedies available to the holders of Rights, it is specifically acknowledged
that the holders of Rights would not have an adequate remedy at law for any
breach of this Agreement and shall be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this
Agreement.
28
Section
16. Agreement
of Rights Holders.
Every
holder of a Right by accepting the same consents and agrees with the Company
and
the Rights Agent and with every other holder of a Right that:
(a) prior
to
the Distribution Date, the Rights will be transferable only in connection with
the transfer of shares of Common Stock;
(b) after
the
Distribution Date, the Rights Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the principal office or offices
of
the Rights Agent designated for such purposes, duly endorsed or accompanied
by a
proper instrument of transfer and with the appropriate forms and certificates
fully executed;
(c) subject
to Section 6(a) and Section 7(f) hereof, the Company and the Rights Agent may
deem and treat the person in whose name a Rights Certificate (or, prior to
the
Distribution Date, the associated balance indicated in the book-entry account
system of the transfer agent for the Common Stock or, in the case of
certificated shares, 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 Rights Certificates or the
associated balance indicated in the book-entry account system of the transfer
agent for the Common Stock or, in the case of certificated shares, 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, subject to the last sentence of Section 7(e) hereof, shall be
required to be affected by any notice to the contrary; and
(d) notwithstanding
anything in this Agreement to the contrary, neither the Company nor the Rights
Agent shall have any liability to any holder of a Right or other Person as
a
result of its inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other order, decree
or
ruling issued by a court of competent jurisdiction or by a governmental,
regulatory or 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
lifted or otherwise overturned as soon as possible.
Section
17. Rights
Certificate Holder Not Deemed a Stockholder.
No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
one-thousandths of a share of Preferred 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 Rights
Certificate be construed to confer upon the holder of any Rights Certificate,
as
such, any of the rights of a stockholder of the Company or any right to vote
for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or
to
receive notice of meetings or other actions affecting stockholders (except
as
provided in Section 25 hereof), or to receive dividends or subscription rights,
or
29
otherwise,
until the Right or Rights evidenced by such Rights Certificate shall have been
exercised in accordance with the provisions hereof.
Section
18. Concerning
the Rights Agent.
(a) The
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 disbursements 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 (each as determined by a court
of
competent jurisdiction) 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.
(b) The
Rights Agent shall be protected and shall incur no liability for or in respect
of any action taken, suffered or omitted by it in connection with its
administration of this Agreement in reliance upon any Rights Certificate or
the
balance indicated in the book-entry account system of the transfer agent for
the
Common Stock or, in the case of certificated shares, certificate for 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.
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, stock transfer or other
stockholder services 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; but only if such Person would be eligible for appointment as
a
successor Rights Agent under the provisions of Section 21 hereof. In case at
the
time such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been countersigned but
not
delivered, any such successor Rights Agent may adopt the countersignature of
a
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the name of the
successor Rights Agent; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this
Agreement.
30
(b) In
case
at any time the name of the Rights Agent shall be changed and at such time
any
of the Rights Certificates shall have been countersigned but not delivered,
the
Rights Agent may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, the Rights Agent may countersign
such Rights Certificates either in its prior name or in its changed name; and
in
all such cases such Rights Certificates shall have the full force provided
in
the Rights 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 Rights Certificates, by their acceptance thereof, shall be
bound:
(a) The
Rights Agent may consult with legal counsel (who may be legal counsel for the
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 (including, without
limitation, the identity of any Acquiring Person and the determination of
Current Market Price) 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 the Chairman
of
the Board, the Chief Executive Officer, the President, any Vice President,
the
Treasurer, any Assistant Treasurer, the Secretary or any Assistant Secretary
of
the Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered in
good
faith by it under the provisions of this Agreement in reliance upon such
certificate.
(c) The
Rights Agent shall be liable hereunder only for its own gross negligence, bad
faith or willful misconduct (each as determined by a court of competent
jurisdiction), provided,
however,
that
the Rights Agent shall under no circumstances be liable for indirect,
consequential, special or punitive damages hereunder. Anything herein to the
contrary notwithstanding, any liability of the Rights Agent under this Agreement
will be limited in the aggregate to an amount equal to three times the amount
of
fees paid by the Company to the Rights Agent.
(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 Rights Certificates
or be
required to verify the same (except as to its countersignature on such Rights
Certificates), but all such statements and recitals are and shall be deemed
to
have been made by the Company only.
31
(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
Rights 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 Rights Certificate; nor shall it be responsible
for
any adjustment required under the provisions of Section 11, Section 13 or
Section 24 hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would require
any
such adjustment (except with respect to the exercise of Rights evidenced by
Rights Certificates after 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 or Preferred Stock
to
be issued pursuant to this Agreement or any Rights Certificate or as to whether
any shares of Common Stock or Preferred Stock will, when so 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 the Chairman of the
Board, the Chief Executive Officer, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant 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 by it in good faith in accordance with instructions of
any
such officer.
(h) The
Rights Agent and any stockholder, director, officer or employee of the Rights
Agent may buy, sell or deal in any of the Rights or other securities of the
Company or become pecuniarily interested in any transaction in which the Company
may be interested, or contract with or lend money to the Company or otherwise
act as fully and freely as though it were not Rights Agent under this Agreement.
Nothing herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other Person.
(i) The
Rights Agent may execute and exercise any of the rights or powers hereby vested
in it or perform any duty hereunder either itself or by or through its attorneys
or agents, and the Rights Agent shall not be answerable or accountable for
any
act, default, neglect or misconduct of any such attorneys or agents or for
any
loss to the Company resulting from any such act, default, neglect or misconduct;
provided,
however,
reasonable care was exercised in the selection and continued employment
thereof.
32
(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 (other than internal costs incurred by the Rights Agent
in providing services to the Corporation in the ordinary course of its business
as Rights Agent) 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 Rights Certificate surrendered to the Rights Agent for exercise
or transfer, the certificate attached to the form of assignment or form of
election to purchase, as the case may be, has either not been completed or
indicates an affirmative response to clause 1 and/or 2 thereof, the Rights
Agent
shall not take any further action with respect to such requested exercise or
transfer without first consulting with the Company.
Section
21. Change
of Rights Agent.
The
Rights Agent or any successor Rights Agent may resign and be discharged from
its
duties under this Agreement upon thirty (30) days' notice in writing mailed
to
the Company, and to each transfer agent of the Common Stock and Preferred Stock,
by registered or certified mail, and, if such resignation occurs after the
Distribution Date, to the registered holders of the Rights Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer agent
of the Common Stock and Preferred Stock, by registered or certified mail, and,
if such removal occurs after the Distribution Date, to the holders of the Rights
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 thirty (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
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a legal business entity organized
and
doing business under the laws of the United States or any State thereof, in
good
standing, having an office in the State of New York, which is authorized under
such laws to exercise corporate trust, stock transfer or stockholder services
powers and which has at the time of its appointment as Rights Agent a combined
capital and surplus of at least $50,000,000 or (b) an affiliate of a legal
business entity described in clause (a) of this sentence. After appointment,
the
successor Rights Agent shall be vested with the same powers, rights, duties
and
responsibilities as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall deliver and transfer
to the successor Rights Agent any property at the time held by it hereunder,
and
execute and deliver any further assurance, conveyance, act or deed necessary
for
the purpose. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock and the Preferred Stock, and, if
such appointment occurs after the Distribution Date, mail a notice thereof
in
writing to the registered holders of the Rights Certificates. Failure
33
to
give
any notice provided for in this Section 21, however, or any defect therein,
shall not affect the legality or validity of the resignation or removal of
the
Rights Agent or the appointment of the successor Rights Agent, as the case
may
be.
Section
22. Issuance
of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the Rights to
the
contrary, the Company may, at its option, issue new Rights Certificates
evidencing Rights in such form as may be approved by the Board to reflect any
adjustment or change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the Rights Certificates
made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock following the
Distribution Date and prior to the redemption or expiration of the Rights,
the
Company (a) shall, with respect to shares of Common Stock so issued or sold
pursuant to the exercise of stock options or under any employee plan or
arrangement, granted or awarded as of the Distribution Date, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate
by
the Board, issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided,
however,
that
(i) no such Rights Certificate shall be issued if, and to the extent that,
the
Company shall be advised by counsel that such issuance would create a
significant risk of material adverse tax consequences to the Company or the
Person to whom such Rights Certificate would be issued, and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate adjustment
shall otherwise have been made in lieu of the issuance thereof.
Section
23. Redemption
and Termination.
(a) The
Board
may, at its option, at any time prior to the earlier of (i) the Close of
Business on the tenth Business Day (or such specified or unspecified later
date
as may be determined by the Board before the Rights cease to be redeemable)
following the Stock Acquisition Date (or, if the Stock Acquisition Date shall
have occurred prior to the Record Date, the Close of Business on the tenth
Business Day following the Record Date), or (ii) the Final Expiration Date,
(x)
redeem all but not less than all of the then outstanding Rights at a redemption
price of $0.001 per Right, as such amount may be appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after
the date hereof (such redemption price being hereinafter referred to as the
"Redemption Price") or (y) amend this Agreement to change the Final Expiration
Date to another date, including without limitation an earlier date.
Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable after the first occurrence of a Section 11(a)(ii)
Event
until such time as the Company's right of redemption hereunder has expired.
The
Company may, at its option, pay the Redemption Price in cash, shares of Common
Stock (based on the Current Market Price, as defined in Section 11(d)(i) hereof,
of the Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors.
(b) Immediately
upon the action of the Board ordering the redemption of the Rights, evidence
of
which shall have been filed with the Rights Agent 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
34
so
held.
Promptly after the action of the Board ordering the redemption of the Rights,
the Company shall give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to all such
holders at each holder's last address as it appears 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.
Section
24. Exchange.
(a) The
Board
may, at its option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which
shall
not include Rights that have
become void pursuant to the provisions of Section 7(e) hereof) for Common Stock
at an exchange ratio of 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 hereinafter referred
to as the "Exchange Ratio"). Notwithstanding the foregoing, the Board shall
not
be empowered to effect such exchange at any time after any Person (other than
the Company, any Subsidiary of the Company, any employee benefit plan of the
Company or any such Subsidiary, or any entity holding Common 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 of the Company then outstanding.
(b) Immediately
upon the action of the Board ordering the exchange of any Rights pursuant to
subsection (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 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 for Rights will be effected and, in the event of any partial
exchange, the number of Rights which will be exchanged. Any partial exchange
shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(e) hereof) held
by each holder of Rights.
(c) In
any
exchange pursuant to this Section 24, the Company, at its option, may substitute
Preferred Stock (or Equivalent Preferred Stock, as such term is defined in
paragraph (b) of Section 11 hereof) for Common Stock exchangeable for Rights,
at
the initial rate of one one-thousandth of a share of Preferred Stock (or
Equivalent Preferred Stock) for each
35
share
of
Common Stock, as appropriately adjusted to reflect stock splits, stock dividends
and other similar transactions after the date hereof.
(d) In
the
event that there shall not be sufficient shares of Common Stock issued but
not
outstanding or authorized but unissued to permit any exchange of Rights as
contemplated in accordance with this Section 24, the Company shall take all
such
action as may be necessary to authorize additional shares of Common Stock for
issuance upon exchange of the Rights.
(e) The
Company shall not be required to issue fractions of shares of Common Stock
or,
in the case of certificated shares, to distribute certificates which evidence
fractional shares of Common Stock. In lieu of such fractional shares of Common
Stock, there shall be paid to the registered holders of the Rights Certificates
with regard to which such fractional shares of Common Stock would otherwise
be
issuable, an amount in cash equal to the same fraction of the current market
value of a whole share of Common Stock. For the purposes of this subsection
(e),
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)(i) hereof) for the Trading Day immediately prior to the date
of
exchange pursuant to this Section 24.
Section
25. Notice
of Certain Events.
(a) In
case
the Company shall propose, at any time after the Distribution Date, (i) to
pay
any dividend payable in stock of any class to the holders of Preferred Stock
or
to make any other distribution to the holders of Preferred Stock (other than
a
regular quarterly cash dividend out of earnings or retained earnings of the
Company), or (ii) to offer to the holders of Preferred Stock rights or warrants
to subscribe for or to purchase any additional shares of Preferred Stock or
shares of stock of any class or any other securities, rights or options, or
(iii) to effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of
Preferred Stock), or (iv) 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) hereof), or,
other
than pursuant to a pro rata dividend and/or distribution to all of the then
current holders of Common Stock, 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 transaction or a series of related transactions, of more than 50% of the
assets, cash flow or earning power of the Company and its Subsidiaries (taken
as
a whole) to any other Person or Persons (other than the Company and/or any
of
its Subsidiaries in one or more transactions each of which complies with Section
11(o) hereof), or (v) 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
Rights Certificate, to the extent feasible and in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend, distribution of rights or warrants,
or
the date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of the shares of Preferred Stock, if any
such date is to be
36
fixed,
and such notice shall be so given in the case of any action covered by clause
(i) or (ii) above at least twenty (20) days prior to the record date for
determining holders of the shares of Preferred Stock for purposes of such
action, and in the case of any such other action, at least twenty (20) days
prior to the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Preferred Stock, whichever
shall be the earlier.
(b) In
case
any of the events set forth in Section 11(a)(ii) hereof shall occur, then,
in
any such case, (i) the Company shall as soon as practicable thereafter give
to
each holder of a Rights Certificate, to the extent feasible and in accordance
with Section 26 hereof, 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 11(a)(ii) hereof, and (ii) all references in the preceding paragraph
to
Preferred Stock shall be deemed thereafter to refer to Common Stock and/or,
if
appropriate, other securities.
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 Rights 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 by the Rights Agent with
the Company) as follows:
0
Xxxxxx
Xxx, Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention:
General Counsel
With
a
copy to:
Skadden,
Arps, Slate, Xxxxxxx & Xxxx LLP
Xxxx
Xxxxx Xxxxxx
Xxx
Xxxx,
XX 00000
Attention:
Xxxxxx Xxxx, Esq.
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 Rights
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 by the Rights Agent with the Company) as follows:
Mellon
Investor Services LLC
000
Xxxxxxxxxx Xxxxxxxxx
Xxxxxx
Xxxx, XX 00000
Attention:
Client Relationship Executive
With
a
copy to:
37
Mellon
Investor Services LLC
000
Xxxxxxxxxx Xxxxxxxxx
Xxxxxx
Xxxx, XX 00000
Attention:
General Counsel
Notices
or demands authorized by this Agreement to be given or made by the Company
or
the Rights Agent to the holder of any Rights Certificate (or, if prior to the
Distribution Date, to the holder of shares of Common Stock) 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 and the Rights Agent shall, if the Company
so directs, supplement or amend any provision of this Agreement without the
approval of any holders of shares of Common Stock. From and after the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Rights Certificates in order (i) to cure any ambiguity, (ii) to correct
or
supplement any provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen any time period
hereunder or (iv) to change or supplement the provisions hereunder in any manner
which the Company may deem necessary or desirable and which shall not adversely
affect the interests of the holders of Rights Certificates (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person). Upon
the
delivery of a certificate from an appropriate officer of the Company which
states that the proposed supplement or amendment is in compliance with the
terms
of this Section 27, 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 anything herein to the contrary, this Agreement may not be
amended (other than pursuant to clauses (i) or (ii) of the preceding sentence)
at a time when the Rights are not redeemable. Notwithstanding anything herein
to
the contrary, the Rights Agent may, but shall not be obligated to, enter into
any supplement or amendment that affects the Rights Agent's own rights, duties,
obligations or immunities under this Agreement.
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 or any other class of capital 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 shall have
the
exclusive power and authority to administer this Agreement and to exercise
all
rights and powers specifically granted to the Board or to the Company, or as
may
be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i) interpret the provisions of
this
Agreement, and (ii) make all determinations deemed necessary or
38
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 in good faith, shall (x) be final, conclusive and binding
on
the Company, the Rights Agent, the holders of the Rights and all other parties,
and (y) not subject the Board, or any of the directors on the Board 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 other than the
Company, the Rights Agent and the registered holders of the Rights Certificates
(and, prior to the Distribution Date, registered holders of 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 Rights Certificates (and, prior to
the
Distribution Date, registered holders of the Common Stock).
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 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 Business Day following the date of such
determination by the Board. Without limiting the foregoing, if any provision
requiring a specific group of directors of the Company to act is held to by
any
court of competent jurisdiction or other authority to be invalid, void or
unenforceable, such determination shall then be made by the Board of Directors
of the Company in accordance with applicable law and the Company's Amended
and
Restated Certificate of Incorporation and By-laws.
Section
32. Governing
Law.
This
Agreement, each Right and each Rights Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Delaware and for
all
purposes shall be governed by and construed in accordance with the laws of
such
State applicable to contracts made and to be performed entirely within such
State.
Section
33. Counterparts.
This
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be deemed to be an original, and all such
counterparts shall together constitute but one and the same
instrument.
Section
34. Descriptive
Headings.
Descriptive headings of the several sections of this Agreement are inserted
for
convenience only and shall not control or affect the meaning or construction
of
any of the provisions hereof.
39
IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed, all as of the day and year first above written.
Attest:
By:
/s/ Xxxxx X. Xxxxxxxx
Name:
Xxxxx X. Xxxxxxxx
Title:
EVP & General Counsel
|
By:
/s/ Xxxx X. Sera
Name:
Xxxx X. Sera
Title:
SVP & Secretary
|
Mellon
Investor Services LLC
|
|
Attest:
By:
/s/Xxxxxxx Xxxx
Name:
Xxxxxxx Xxxx
Title:
Client Relationship Executive
|
By:/s/Sajoo
X. Xxxxxx
Name:
Sajoo X. Xxxxxx
Title:
Director, Client Relationship Management
|
Exhibit
A
FORM
OF
CERTIFICATE
OF DESIGNATION, PREFERENCES AND
RIGHTS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
of
Pursuant
to Section 151 of the General Corporation Law
of
the
State of Delaware
We,
the
undersigned officers of Avis Budget Group, Inc., a Delaware corporation (the
"Corporation"), pursuant to the provisions of Sections 103 and 151 of the
General Corporation Law of the State of Delaware, do hereby state and certify
that pursuant to the authority vested in the Board of Directors of the
Corporation by the Amended and Restated Certificate of Incorporation of the
Corporation, the Board of Directors on July 13, 2006, duly adopted the following
resolution creating a series of 2,500,000 shares of Preferred Stock designated
as Series A Junior Participating Preferred Stock:
RESOLVED,
that pursuant to the authority vested in the Board of Directors of this
Corporation in accordance with the provisions of its Amended and Restated
Certificate of Incorporation, a series of Preferred Stock of the Corporation
be
and it hereby is created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional and other
special rights of the shares of such series, and the qualifications, limitations
or restrictions thereof are as follows:
Section
1. Designation
and Amount.
The
shares of such series shall be designated as "Series A Junior Participating
Preferred Stock" and the number of shares constituting such series shall be
2,500,000.
Section
2. Dividends
and Distributions.
(A) Subject
to the prior and superior rights of the holders of any shares of any series
of
Preferred Stock ranking prior and superior to the shares of Series A Junior
Participating Preferred Stock with respect to dividends, the holders of shares
of Series A Junior Participating Preferred Stock shall be entitled to receive,
when, as and if declared by the Board of Directors out of funds legally
available for the purpose, quarterly dividends payable in cash on the
15th
day of
March, June, September and December in each year (each such date being
A-1
referred
to herein as a "Quarterly Dividend Payment Date"), commencing on the first
Quarterly Dividend Payment Date after the first issuance of a share or fraction
of a share of Series A Junior Participating Preferred Stock, in an amount per
share (rounded to the nearest cent) equal to the greater of (a) $0.10 or (b)
subject to the provision for adjustment hereinafter set forth, 1,000 times
the
aggregate per share amount of all cash dividends, and 1,000 times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification
or
otherwise), declared on the Common Stock, par value $0.01 per share, of the
Corporation (the "Common Stock"), since the immediately preceding Quarterly
Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment
Date, since the first issuance of any share or fraction of a share of Series
A
Junior Participating Preferred Stock. In the event the Corporation shall at
any
time after the Rights Dividend Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock, through a reverse
stock split or otherwise, into a smaller number of shares, then in each such
case the amount to which holders of shares of Series A Junior Participating
Preferred Stock were entitled immediately prior to such event under clause
(b)
of the preceding sentence shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such
event; provided that notwithstanding clause (iii) above, no such adjustment
shall occur with respect to any combination of the Corporation's outstanding
shares of Common Stock, through a reverse stock split or otherwise, occurring
on
or prior to March 31, 2007.
(B) The
Corporation shall declare a dividend or distribution on the Series A Junior
Participating Preferred Stock as provided in Paragraph (A) above immediately
after it declares a dividend or distribution on the Common Stock (other than
a
dividend payable in shares of Common Stock); provided that, in the event no
dividend or distribution shall have been declared on the Common Stock during
the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $.10 per share on the Series
A
Junior Participating Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends
shall begin to accrue and be cumulative on outstanding shares of Series A Junior
Participating Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares of Series A Junior Participating
Preferred Stock, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends
on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date
after
the record date for the determination of holders of shares of Series A Junior
Participating Preferred Stock entitled to receive a quarterly dividend and
before such Quarterly Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such Quarterly Dividend
Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends
paid on the shares of Series A Junior Participating Preferred Stock in an amount
less than the total amount of such dividends at the time accrued and payable
on
A-2
such
shares shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record date
for
the determination of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than thirty (30) days
prior
to the date fixed for the payment thereof.
Section
3. Voting
Rights.
The
holders of shares of Series A Junior Participating Preferred Stock shall have
the following voting rights:
(A) Subject
to the provision for adjustment hereinafter set forth, each share of Series
A
Junior Participating Preferred Stock shall entitle the holder thereof to one
thousand (1,000) votes on all matters submitted to a vote of the stockholders
of
the Corporation. In the event the Corporation shall at any time after the Rights
Dividend Declaration Date (i) declare any dividend on Common Stock payable
in
shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii)
combine the outstanding Common Stock into a smaller number of shares, through
a
reverse stock split or otherwise, then in each such case the number of votes
per
share to which holders of shares of Series A Junior Participating Preferred
Stock were entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction the numerator of which is the number
of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event; provided that notwithstanding
clause (iii) above, no such adjustment shall occur with respect to any
combination of the Corporation's outstanding shares of Common Stock, through
a
reverse stock split or otherwise, occurring on or prior to March 31,
2007.
(B) Except
as
otherwise provided herein or by law, the holders of shares of Series A Junior
Participating Preferred Stock and the holders of shares of Common Stock shall
vote together as one class on all matters submitted to a vote of stockholders
of
the Corporation.
(C) (i)
If at
any time dividends on any Series A Junior Participating Preferred Stock shall
be
in arrears in an amount equal to six (6) quarterly dividends thereon, the
occurrence of such contingency shall xxxx the beginning of a period (herein
called a "default period") which shall extend until such time when all accrued
and unpaid dividends for all previous quarterly dividend periods and for the
current quarterly dividend period on all shares of Series A Junior Participating
Preferred Stock then outstanding shall have been declared and paid or set apart
for payment. During each default period, all holders of Preferred Stock
(including holders of the Series A Junior Participating Preferred Stock) with
dividends in arrears in an amount equal to six (6) quarterly dividends thereon,
voting as a class, irrespective of series, shall have the right to elect two
(2)
directors.
(ii) During
any default period, such voting right of the holders of Series A Junior
Participating Preferred Stock may be exercised initially at a special meeting
called pursuant to subparagraph (iii) of this Section 3(C) or at
A-3
any
annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that such voting right shall not be exercised unless
the
holders of ten percent (10%) in number of shares of Preferred Stock outstanding
shall be present in person or by proxy. The absence of a quorum of the holders
of Common Stock shall not affect the exercise by the holders of Preferred Stock
of such voting right. At any meeting at which the holders of Preferred Stock
shall exercise such voting right initially during an existing default period,
they shall have the right, voting as a class, to elect directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2)
directors or, if such right is exercised at an annual meeting, to elect two
(2)
directors. If the number which may be so elected at any special meeting does
not
amount to the required number, the holders of the Preferred Stock shall have
the
right to make such increase in the number of directors as shall be necessary
to
permit the election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect directors in any
default period and during the continuance of such period, the number of
directors shall not be increased or decreased except by vote of the holders
of
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series A Junior
Participating Preferred Stock.
(iii) Unless
the holders of Preferred Stock shall, during an existing default period, have
previously exercised their right to elect directors, the Board of Directors
may
order, or any stockholder or stockholders owning in the aggregate not less
than
ten percent (10%) of the total number of shares of Preferred Stock outstanding,
irrespective of series, may request, the calling of a special meeting of the
holders of Preferred Stock, which meeting shall thereupon be called by the
President, a Vice-President or the Secretary of the Corporation. Notice of
such
meeting and of any annual meeting at which holders of Preferred Stock are
entitled to vote pursuant to this Paragraph (C)(iii) shall be given to each
holder of record of Preferred Stock by mailing a copy of such notice to him
at
his last address as the same appears on the books of the Corporation. Such
meeting shall be called for a time not earlier than 20 days and not later than
60 days after such order or request or in default of the calling of such meeting
within 60 days after such order or request, such meeting may be called on
similar notice by any stockholder or stockholders owning in the aggregate not
less than ten percent (10%) of the total number of shares of Preferred Stock
outstanding. Notwithstanding the provisions of this Paragraph (C)(iii), no
such
special meeting shall be called during the period within 60 days immediately
preceding the date fixed for the next annual meeting of the stockholders.
(iv) In
any
default period, the holders of Common Stock, and other classes of stock of
the
Corporation if applicable, shall continue to be entitled to elect the whole
number of directors until the holders of Preferred Stock shall have exercised
their right to elect two (2) directors voting as a class, after the exercise
of
which right (x) the directors so elected by the holders of Preferred
A-4
Stock
shall continue in office until their successors shall have been elected by
such
holders or until the expiration of the default period, and (y) any vacancy
in
the Board of Directors may (except as provided in Paragraph (C)(ii) of this
Section 3) be filled by vote of a majority of the remaining directors
theretofore elected by the holders of the class of stock which elected the
director whose office shall have become vacant. References in this Paragraph
(C)
to directors elected by the holders of a particular class of stock shall include
directors elected by such directors to fill vacancies as provided in clause
(y)
of the foregoing sentence.
(v) Immediately
upon the expiration of a default period, (x) the right of the holders of
Preferred Stock as a class to elect directors shall cease, (y) the term of
any
directors elected by the holders of Preferred Stock as a class shall terminate,
and (z) the number of directors shall be such number as may be provided for
in
the certificate of incorporation or by-laws irrespective of any increase made
pursuant to the provisions of Paragraph (C)(ii) of this Section 3 (such number
being subject, however, to change thereafter in any manner provided by law
or in
the certificate of incorporation or by-laws). Any vacancies in the Board of
Directors effected by the provisions of clauses (y) and (z) in the preceding
sentence may be filled by a majority of the remaining directors.
(D) Except
as
set forth herein, holders of Series A Junior Participating Preferred Stock
shall
have no special voting rights and their consent shall not be required (except
to
the extent they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section
4. Certain
Restrictions.
(A) Whenever
quarterly dividends or other dividends or distributions payable on the Series
A
Junior Participating Preferred Stock as provided in Section 2 are in arrears,
thereafter and until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Junior Participating Preferred Stock
outstanding shall have been paid in full, the Corporation shall not
(i) declare
or pay dividends on, make any other distributions on, or redeem or purchase
or
otherwise acquire for consideration any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding up) to the Series
A
Junior Participating Preferred Stock;
(ii) declare
or pay dividends on or make any other distributions on any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution
or
winding up) with the Series A Junior Participating Preferred Stock, except
dividends paid ratably on the Series A Junior Participating Preferred Stock
and
all such parity stock on which dividends are payable or in arrears in proportion
to the total amounts to which the holders of all such shares are then entitled;
A-5
(iii) redeem
or
purchase or otherwise acquire for consideration shares of any stock ranking
on a
parity (either as to dividends or upon liquidation, dissolution or winding
up)
with the Series A Junior Participating Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares of
any
such parity stock in exchange for shares of any stock of the Corporation ranking
junior (either as to dividends or upon dissolution, liquidation or winding
up)
to the Series A Junior Participating Preferred Stock; or
(iv) purchase
or otherwise acquire for consideration any shares of Series A Junior
Participating Preferred Stock, or any shares of stock ranking on a parity with
the Series A Junior Participating Preferred Stock, except in accordance with
a
purchase offer made in writing or by publication (as determined by the Board
of
Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and
other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among the
respective series or classes.
(B) The
Corporation shall not permit any subsidiary of the Corporation to purchase
or
otherwise acquire for consideration any shares of stock of the Corporation
unless the Corporation could, under Paragraph (A) of this Section 4, purchase
or
otherwise acquire such shares at such time and in such manner.
Section
5. Reacquired
Shares.
Any
shares of Series A Junior Participating Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such shares shall upon
their cancellation become authorized but unissued shares of Preferred Stock
and
may be reissued as part of a new series of Preferred Stock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein.
Section
6. Liquidation,
Dissolution or Winding Up.
(A)
Upon any liquidation (voluntary or otherwise), dissolution or winding up of
the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock unless, prior
thereto, the holders of shares of Series A Junior Participating Preferred Stock
shall have received an amount equal to $1,000 per share of Series A Junior
Participating Preferred Stock, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not declared, to the date of
such payment (the "Series A Liquidation Preference"). Following the payment
of
the full amount of the Series A Liquidation Preference, no additional
distributions shall be made to the holders of shares of Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares
of
Common Stock shall have received an amount per share (the "Common Adjustment")
equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 1,000 (as appropriately adjusted as set forth in subparagraph
(C) below to reflect such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock) (such number in clause
(ii),
the "Adjustment Number"). Following the
A-6
payment
of the full amount of the Series A Liquidation Preference and the Common
Adjustment in respect of all outstanding shares of Series A Junior Participating
Preferred Stock and Common Stock, respectively, holders of Series A Junior
Participating Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to 1 with respect to such
Preferred Stock and Common Stock, on a per share basis, respectively.
(B) In
the
event, however, that there are not sufficient assets available to permit payment
in full of the Series A Liquidation Preference and the liquidation preferences
of all other series of preferred stock, if any, which rank on a parity with
the
Series A Junior Participating Preferred Stock, then such remaining assets shall
be distributed ratably to the holders of such parity shares in proportion to
their respective liquidation preferences. In the event, however, that there
are
not sufficient assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed ratably to the
holders of Common Stock.
(C) In
the
event the Corporation shall at any time after the Rights Dividend Declaration
Date (i) declare any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, through a reverse stock split
or
otherwise, then in each such case the Adjustment Number in effect immediately
prior to such event shall be adjusted by multiplying such Adjustment Number
by a
fraction the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to
such
event; provided that notwithstanding clause (iii) above, no such adjustment
shall occur with respect to any combination of the Corporation's outstanding
shares of Common Stock, through a reverse stock split or otherwise, occurring
on
or prior to March 31, 2007.
Section
7. Consolidation,
Merger, etc.
In case
the Corporation shall enter into any consolidation, merger, combination or
other
transaction in which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other property, then in any
such
case the shares of Series A Junior Participating Preferred Stock shall at the
same time be similarly exchanged or changed in an amount per share (subject
to
the provision for adjustment hereinafter set forth) equal to 1,000 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common
Stock
is changed or exchanged. In the event the Corporation shall at any time after
the Rights Dividend Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares,
through a reverse stock split or otherwise, then in each such case the amount
set forth in the preceding sentence with respect to the exchange or change
of
shares of Series A Junior Participating Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is the number
of
shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event; provided that notwithstanding
clause (iii) above, no such adjustment shall occur with
A-7
respect
to any combination of the Corporation's outstanding shares of Common Stock,
through a reverse stock split or otherwise, occurring on or prior to March
31,
2007.
Section
8. No
Redemption.
The
shares of Series A Junior Participating Preferred Stock shall not be
redeemable.
Section
9. Ranking.
The
Series A Junior Participating Preferred Stock shall rank junior to all other
series of the Corporation's Preferred Stock as to the payment of dividends
and
the distribution of assets, unless the terms of any such series shall provide
otherwise.
Section
10. Amendment.
At any
time when any shares of Series A Junior Participating Preferred Stock are
outstanding, the Amended and Restated Certificate of Incorporation of the
Corporation nor this Certificate of Designation shall be amended in any manner
which would materially alter or change the powers, preferences or special rights
of the Series A Junior Participating Preferred Stock so as to affect them
adversely without the affirmative vote of the holders of a majority or more
of
the outstanding shares of Series A Junior Participating Preferred Stock, voting
separately as a class.
Section
11. Fractional
Shares.
Series
A Junior Participating Preferred Stock may be issued in fractions of a share
which shall entitle the holder, in proportion to such holder's fractional
shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series
A
Junior Participating Preferred Stock.
IN
WITNESS WHEREOF, we have executed and subscribed this Certificate and do affirm
the foregoing as true under the penalties of perjury this 13th day of July
2006.
_______________________________
Name:
Title:
|
|
Attest:
By:__________________________________
Name:
Title:
|
A-8
Exhibit
B
[Form
of
Rights Certificate]
(b) Certificate
No. R-________
Rights
NOT
EXERCISABLE AFTER THE EARLIER OF (I) 5:00 P.M., NEW YORK CITY TIME, ON THE
DATE
THAT THE VOTES OF THE COMPANY'S STOCKHOLDERS, WITH RESPECT TO THE COMPANY'S
2008
ANNUAL MEETING OF STOCKHOLDERS, ARE CERTIFIED, UNLESS THE CONTINUATION OF THE
RIGHTS IS APPROVED BY THE STOCKHOLDERS OF THE COMPANY BY A VOTE OF THE MAJORITY
OF THE SHARES PRESENT AND ENTITLED TO VOTE AT A STOCKHOLDERS MEETING AT THE
COMPANY'S 2008 ANNUAL MEETING OF STOCKHOLDERS (IN WHICH CASE CLAUSE (II) SHALL
GOVERN) OR (II) 5:00 P.M., NEW YORK CITY TIME ON JULY 13, 2016, IN EACH CASE,
UNLESS THE RIGHTS ARE PREVIOUSLY REDEEMED, EXCHANGED OR TERMINATED. 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. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON (AS SUCH TERM IS DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e)
OF SUCH AGREEMENT.]1
Rights
Certificate
This
certifies that ______________________, or registered assigns, is the registered
owner of the number of Rights set forth above, each of which entitles the owner
B-1
thereof,
subject to the terms, provisions and conditions of the Rights Agreement, dated
as of July 13, 2006 (the "Rights Agreement"), as it may be amended, restated,
renewed or extended from time to time, between Avis Budget Group, Inc., a
Delaware corporation (the "Company"), and Mellon Investor Services LLC, a New
Jersey limited liability company (the "Rights Agent"), to purchase from the
Company at any time prior to the earlier of (i) 5:00 P.M., New York City time,
on the date that the votes of the Company's stockholders, with respect to the
Company's 2008 annual meeting of stockholders, are certified, unless the
continuation of the Rights is approved by the stockholders of the Company by
a
vote of the majority of the shares present and entitled to vote at a
stockholders meeting at the Company's 2008 annual meeting of stockholders (in
which case clause (ii) shall govern) or (ii) 5:00 P.M., New York City time
on
July 13, 2016, in each case, unless the Rights are previously redeemed,
exchanged or terminated, at the office or offices of the Rights Agent designated
for such purpose, or its successors as Rights Agent, one one-thousandth of
a
fully paid, non-assessable share of Series A Junior Participating Preferred
Stock (the "Preferred Stock") of the Company, at a purchase price of $80 per
one
one-thousandth of a share (the "Purchase Price"), upon presentation and
surrender of this Rights Certificate with the Form of Election to Purchase
and
related Certificate duly executed. The number of Rights evidenced by this Rights
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 July 13, 2006, based on the Preferred Stock
as constituted at such date. The Company reserves the right to require prior
to
the occurrence of a Triggering Event (as such term is defined in the Rights
Agreement) that a number of Rights be exercised so that only whole shares of
Preferred Stock will be issued.
Upon
the
occurrence of a Section 11(a)(ii) Event (as such term is defined in the Rights
Agreement), if the Rights evidenced by this Rights 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 Section 11(a)(ii) Event.
As
provided in the Rights Agreement, the Purchase Price and the number and kind
of
shares of Preferred Stock or other securities, which may be purchased upon
the
exercise of the Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events, including
Triggering Events.
This
Rights 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 Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability
of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned office of
the
Rights Agent and are also available upon written request to the Rights
Agent.
B-2
This
Rights Certificate, with or without other Rights Certificates, upon surrender
at
the office of the Rights Agent designated for such purpose, may be exchanged
for
another Rights Certificate or Rights Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number
of
one one-thousandths of a share of Preferred Stock as the Rights evidenced by
the
Rights Certificate or Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be exercised in part,
the
holder shall be entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole Rights not
exercised.
Subject
to the provisions of the Rights Agreement, the Rights evidenced by this
Certificate may be redeemed by the Company at its option at any time prior
to
the earlier of the Close of Business on (A) the tenth Business Day following
the
Stock Acquisition Date (as such time period may be extended pursuant to the
Rights Agreement), and (B) the Final Expiration Date at a redemption price
of
$0.001 per Right.
No
fractional shares of Preferred Stock will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock, which may, at
the
election of the Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights Agreement. The
Company, at its election, may require that a number of Rights be exercised
so
that only whole shares of Preferred Stock would be issued.
No
holder
of this Rights Certificate shall be entitled to vote or receive dividends or
be
deemed for any purpose the holder of shares of Preferred 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
stockholder of the Company or any right to vote for the election of directors
or
upon any matter submitted to stockholders at any meeting thereof, or to give
consent to or withhold consent from any corporate action, or, to receive notice
of meetings or other actions affecting stockholders (except as provided in
the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This
Rights Certificate shall not be valid or obligatory for any purpose until it
shall have been countersigned by the Rights Agent.
B-3
WITNESS
the facsimile signature of the proper officers of the Company and its corporate
seal.
Dated
as
of _________ __, ____.
ATTEST:
|
Avis
Budget Group, Inc.
|
__________________________________
Secretary
|
By:_______________________________
Title:
|
Countersigned:
Mellon
Investor Services LLC
By:_______________________________
Authorized
Signature
|
[Form
of
Reverse Side of Rights Certificate]
FORM
OF ASSIGNMENT
(To
be
executed by the registered holder if such
holder
desires to transfer the Rights Certificate.)
FOR
VALUE RECEIVED ___________________________________
hereby
sells, assigns and transfers unto
______________________________________________
______________________________________________________________________________
(Please
print name and address of transferee)
______________________________________________________________________________
this
Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute
and
appoint __________________ Attorney, to transfer the within Rights
Certificate on the books of the within
named
Company, with full power of substitution.
Dated:
__________________,__
|
___________________________________
Signature
Signature
Guaranteed:
B-4
Certificate
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1)
this
Rights 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 Rights Certificate from any Person who
is,
was or subsequently became an Acquiring Person or an Affiliate or Associate
of
an Acquiring Person.
Dated:
_______________, __
|
_______________________________
Signature:
|
(d) Signature
Guaranteed:
B-5
NOTICE
The
signature to the foregoing Assignment and Certificate must correspond to the
name as written upon the face of this Rights Certificate in every particular,
without alteration or enlargement or any change whatsoever.
B-6
FORM
OF ELECTION TO PURCHASE
(To
be
executed if holder desires to exercise Rights
represented
by the Rights Certificate.)
To:
AVIS
BUDGET GROUP, INC.
The
undersigned hereby irrevocably elects to exercise __________ Rights represented
by this Rights Certificate to purchase the shares of Preferred Stock issuable
upon the exercise of the Rights (or such other securities of the Company or
of
any other person which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name of and
delivered to:
Please
insert social security
or
other
identifying number
(Please
print name and address)
If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a new Rights Certificate for the balance of such Rights shall be registered in the name of and delivered to:
Please
insert social security
or
other
identifying number
(Please
print name and address)
Dated:
_______________,__
|
_______________________________
Signature:
|
Signature
Guaranteed:
B-7
Certificate
The
undersigned hereby certifies by checking the appropriate boxes
that:
(1)
the
Rights evidenced by this Rights 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 Rights Certificate from any Person who
is,
was or became an Acquiring Person or an Affiliate or Associate of an Acquiring
Person.
Dated:
_______________,__
|
_______________________________
Signature:
|
Signature
Guaranteed:
B-8
NOTICE
The
signature to the foregoing Election to Purchase and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
B-9
Exhibit
C
FORM
OF
SUMMARY
OF RIGHTS TO PURCHASE
PREFERRED
STOCK
On
July
13, 2006, the Board of Directors (the "Board") of Avis Budget Group, Inc. (the
"Company") authorized and declared a dividend distribution of one right (a
"Right") for each outstanding share of Common Stock, par value $0.01 per share,
of the Company (the "Common Stock"), to stockholders of record at the close
of
business on July 21, 2006 (the "Record Date"). Each Right entitles the
registered holder to purchase from the Company a unit consisting of one
one-thousandth of a share (a "Unit") of Series A Junior Participating Preferred
Stock, par value $0.01 per share (the "Preferred Stock") at a purchase price
of
$80 per Unit, subject to adjustment (the "Purchase Price"). The description
and
terms of the Rights are set forth in a Rights Agreement (the "Rights
Agreement"), dated as of July 13, 2006, between the Company and Mellon Investor
Services LLC, a New Jersey limited liability company, as Rights Agent.
Initially,
the Rights will be attached to the shares of Common Stock underlying the
balances indicated in the book-entry account system of the transfer agent for
the Common Stock or, in the case of certificated shares, all Common Stock
certificates representing shares then outstanding, and no separate rights
certificates ("Rights Certificates") will be distributed. Subject to certain
exceptions specified in the Rights Agreement, the Rights will separate from
the
Common Stock and a distribution date (a "Distribution Date") will occur upon
the
earlier of (i) 10 business days (or such later date as the Board shall
determine) following a public announcement that a person or group of affiliated
or associated persons (an "Acquiring Person") has acquired beneficial ownership
of fifteen percent (15%) or more of the outstanding shares of Common Stock
(the
"Stock Acquisition Date"), other than as a result of repurchases of stock by
the
Company or certain inadvertent actions by institutional or certain other
stockholders or (ii) 10 business days (or such later date as the Board shall
determine) following the commencement of a tender offer or exchange offer that
would result in a person or group becoming an Acquiring Person. Until the
Distribution Date, (i) the Rights will be evidenced by the balances indicated
in
the book-entry account system of the transfer agent for the Common Stock
registered in the names of the holders of the Common Stock or, in the case
of
certificated shares, the Common Stock certificates, and will be transferred
with
and only with such shares or, in the case of certificated shares, Common Stock
certificates, (ii) confirmation and account statements sent to the holders
of
shares of Common Stock in book-entry form or, in the case of certificated
shares, new Common Stock certificates issued after the Record Date, will contain
a notation incorporating the Rights Agreement by reference and (iii) the
transfer of any shares of Common Stock or, in the case of certificated shares,
certificates for Common Stock, outstanding will also constitute the transfer
of
the Rights associated with such shares of Common Stock or, in the case of
certificated shares, the Common Stock represented by such certificates. Pursuant
to the Rights Agreement, the Company reserves the right to require prior to
the
occurrence of a Triggering Event (as defined below) that, upon any exercise
of
Rights, a number of Rights be exercised so that only whole shares of Preferred
Stock will be issued.
C-1
The
Rights are not exercisable until the Distribution Date and will expire on the
earlier of (i) 5:00 P.M., New York City time, on the date that the votes of
the
Company's stockholders, with respect to the Company's 2008 annual meeting of
stockholders, are certified, unless the continuation of the Rights is approved
by the stockholders of the Company by a vote of the majority of the shares
present and entitled to vote at a stockholders meeting at the Company's 2008
annual meeting of stockholders (in which case clause (ii) shall govern) or
(ii)
5:00 P.M., New York City time on July 13, 2016, in each case, unless the Rights
are previously redeemed, exchanged or terminated.
As
soon
as practicable after the Distribution Date, Rights Certificates will be mailed
to holders of record of the Common Stock as of the close of business on the
Distribution Date and, thereafter, the separate Rights Certificates alone will
represent the Rights.
In
the
event that a person or group of affiliated or associated persons becomes an
Acquiring Person, each holder of a Right will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain circumstances, cash,
property or other securities of the Company) having a value equal to two times
the exercise price of the Right. Notwithstanding any of the foregoing, following
the occurrence of the event set forth in this paragraph, all Rights that are,
or
(under certain circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void. However,
Rights are not exercisable following the occurrence of the event set forth
above
until such time as the Rights are no longer redeemable by the Company as set
forth below.
For
example, at an exercise price of $80 per Right, each Right not owned by an
Acquiring Person (or by certain related parties) following the event set forth
in the preceding paragraph would entitle its holder to purchase $160 worth
of
Common Stock (or other consideration, as noted above) for $80. Assuming that
the
Common Stock had a per share value of $16 at such time, the holder of each
valid
Right would be entitled to purchase ten shares of Common Stock for $80.
In
the
event that, at any time following the Stock Acquisition Date, (i) the Company
engages in a merger or other business combination transaction in which the
Company is not the surviving corporation, (ii) the Company engages in a merger
or other business combination transaction in which the Company is the surviving
corporation and the Common Stock of the Company is changed or exchanged, or
(iii) other than pursuant to a pro rata dividend and/or distribution to all
of
the then current holders of Common Stock, 50% or more of the Company's assets,
cash flow or earning power is sold or transferred, each holder of a Right
(except Rights which have previously been voided as set forth above) shall
thereafter have the right to receive, upon exercise, common stock of the
acquiring company having a value equal to two times the exercise price of the
Right. The events set forth in this paragraph and in the second preceding
paragraph are referred to as the "Triggering Events."
At
any
time after a person becomes an Acquiring Person and prior to the acquisition
by
such person or group of 50% or more of the outstanding Common Stock, the Board
may exchange the Rights (other than Rights owned by such person or group which
have become void), in whole or in part, for Common Stock or Preferred Stock
at
an exchange ratio of one share of Common Stock, or one one-thousandth of a
share
of Preferred Stock (or of a share
C-2
of
a
class or series of the Company's preferred stock having equivalent rights,
preferences and privileges), per Right (subject to adjustment).
The
Purchase Price payable, and the number of Units of Preferred 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 Preferred
Stock, (ii) if holders of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible securities at less
than
the current market price of the Preferred Stock, or (iii) upon the distribution
to holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With
certain exceptions, no adjustment in the Purchase Price will be required until
cumulative adjustments amount to at least 1% of the Purchase Price. No
fractional Units will be issued and, in lieu thereof, an adjustment in cash
will
be made based on the market price of the Preferred Stock on the last trading
date prior to the date of exercise.
At
any
time until ten business days following the Stock Acquisition Date, the Company
may redeem the Rights in whole, but not in part, at a price of $0.001 per Right
(payable in cash, Common Stock or other consideration deemed appropriate by
the
Board of Directors) or amend the Rights Agreement to change the Final Expiration
Date to another date, including without limitation an earlier date. Immediately
upon the action of the Board of Directors ordering redemption of the Rights,
the
Rights will terminate and the only right of the holders of Rights will be to
receive the $0.001 redemption price.
Until
a
Right is exercised, the holder thereof, as such, will have no separate rights
as
a stockholder of the Company, including, without limitation, the right to vote
or to receive dividends in respect of Rights. While the distribution of the
Rights will not be taxable to stockholders or to the Company, stockholders
may,
depending upon the circumstances, recognize taxable income in the event that
the
Rights become exercisable for Common Stock (or other consideration) of the
Company or for common stock of the acquiring company or in the event of the
redemption of the Rights as set forth above.
Any
of
the provisions of the Rights Agreement may be amended by the Board of Directors
of the Company prior to the Distribution Date. After the Distribution Date,
the
provisions of the Rights Agreement may be amended by the Board in order to
cure
any ambiguity, to make changes which do not adversely affect the interests
of
holders of Rights, or to shorten or lengthen any time period under the Rights
Agreement. The foregoing notwithstanding, no amendment may be made at such
time
as the Rights are not redeemable.
A
copy of
the Rights Agreement has been or will be filed with the Securities and Exchange
Commission as an Exhibit to a Registration Statement on Form 8-A/Current Report
on Form 8-K. A copy of the Rights Agreement is available free of charge from
the
Rights Agent. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
C-3