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RIGHTS AGREEMENT
DATED AS OF DECEMBER 16, 1997
BY AND BETWEEN
CHECKFREE HOLDINGS CORPORATION
AND
THE FIFTH THIRD BANK
AS RIGHTS AGENT
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EXHIBIT 4.1
TABLE OF CONTENTS
Page
Section 1. Certain Definitions.................................................................2
Section 2. Appointment of Rights Agent.........................................................7
Section 3. Issuance of Right Certificates......................................................7
Section 4. Form of Right Certificates..........................................................9
Section 5. Countersignature and Registration...................................................9
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates .............10
Section 7. Exercise of Rights.................................................................10
Section 8. Cancellation and Destruction of Right Certificates ................................12
Section 9. Reservation and Availability of Capital Stock......................................12
Section 10 Securities Record Date.............................................................13
Section 11. Adjustment of Exercise Price, Number of Shares Issuable
Upon Exercise of Rights or Number of Rights........................................14
Section 12. Certificate of Adjusted Exercise Price or Number of Shares
Issuable Upon Exercise of Rights...................................................19
Section 13. Consolidation, Merger, or Sale or Transfer of
Assets or Earning Power............................................................19
Section 14. Fractional Rights and Fractional Shares............................................22
Section 15. Rights of Action...................................................................22
Section 16. Agreement of Right Holders.........................................................23
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Section 17. Right Holder and Right Certificate Holder
Not Deemed a Stockholder...........................................................23
Section 18. Concerning the Rights Agent........................................................23
Section 19. Merger or Consolidation or Change of Name of Rights Agent .........................24
Section 20. Duties of Rights Agent.............................................................24
Section 21. Change of Rights Agent.............................................................26
Section 22. Issuance of New Right Certificates.................................................27
Section 23. Redemption of Rights...............................................................27
Section 24. Exchange of Rights.................................................................28
Section 25. Notice of Certain Events...........................................................29
Section 26. Notices............................................................................29
Section 27. Supplements and Amendments.........................................................30
Section 28. Certain Covenants..................................................................31
Section 29. Successors.........................................................................31
Section 30. Benefits of this Agreement.........................................................31
Section 31. Severability.......................................................................32
Section 32. Governing Law......................................................................32
Section 33. Counterparts.......................................................................32
Section 34. Descriptive Headings...............................................................32
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TABLE OF EXHIBITS
Exhibit A Form of Certificate of Incorporation
Exhibit B Form of Right Certificate
Exhibit C Form of Summary of the Rights
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RIGHTS AGREEMENT
This Rights Agreement ("Agreement") is made and entered into as of
December 16, 1997, by and between CHECKFREE HOLDINGS CORPORATION, a
Delaware corporation (the "Company"), and THE FIFTH THIRD BANK (the "Rights
Agent").
WHEREAS, the Board of Directors of the Company has
authorized and declared a dividend of one preferred stock
purchase right (a "Right") for each Common Share (as
hereinafter defined) of the Company, which dividend is
payable on December 19, 1997 (the "Record Date"), to the
holders of record of Common Shares as of the Close of
Business (as hereinafter defined) on such date;
WHEREAS, the Board of Directors of the Company has
further authorized and directed the issuance of one
(subject to adjustment of such number as provided in this
Agreement) Right for (A) each Common Share that shall be
issued by the Company at any time after the Record Date
and prior to the earliest of the date of the first
Section 11(a)(ii) Event, the date of the first Section
13(a) Event, the Redemption Date or the Expiration Date
(as such terms are hereinafter defined), and (B) each
Common Share that shall be issued by the Company at any
time on or after the earlier of the date of the first
Section 11(a)(ii) Event or the date of the first Section
13(a) Event and prior to the earlier of the Redemption
Date or the Expiration Date pursuant to the exercise of
conversion rights, exchange rights, rights (other than
Rights), warrants or options that shall have been issued
or granted prior to the earlier of the date of the first
Section 11(a)(ii) Event or the date of the first Section
13(a) Event, unless the Board of Directors shall provide
otherwise at the time of the issuance or grant of such
conversion rights, exchange rights, rights (other than
Rights), warrants or options; and
WHEREAS, in connection with the matters referred to
herein, the Company desires to appoint the Rights Agent
to act on behalf of the Company for the benefit of the
holders of Rights, and the Rights Agent is willing so to
act;
NOW, THEREFORE, in consideration of the foregoing
recitals and the mutual agreements set forth herein, and
for the benefit of the holders of Rights, the parties
hereto hereby agree as follows:
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SECTION 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms have the
meanings indicated:
(a) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 promulgated under the Exchange Act, as
in effect on the date hereof.
(b) A Person shall be deemed the "Beneficial Owner" of and shall
be deemed to "Beneficially Own":
(i) any securities that such Person or any of such
Person's Affiliates or Associates beneficially owns, directly or
indirectly, for purposes of Section 13(d) of the Exchange Act and
Rule 13d-3 promulgated under the Exchange Act, in each case as in
effect on the date hereof;
(ii) any securities that such Person or any of such
Person's Affiliates or Associates has the right to acquire
(whether such right is exercisable immediately, or only after the
passage of time, compliance with regulatory requirements, the
fulfillment of a condition, or otherwise) pursuant to any
agreement, arrangement or understanding, or upon the exercise of
conversion rights, exchange rights, rights (other than the
Rights), warrants or options, or otherwise, provided that a Person
shall not be deemed the Beneficial Owner of, or to Beneficially
Own, securities tendered pursuant to a tender offer or exchange
offer made by or on behalf of such Person or any of such Person's
Affiliates or Associates until such tendered securities are
accepted for purchase or exchange;
(iii) any securities that such Person or any of such
Person's Affiliates or Associates has the right to vote, alone or
in concert with others, pursuant to any agreement, arrangement or
understanding, provided that a Person shall not be deemed the
Beneficial Owner of, or to Beneficially Own, any security if the
agreement, arrangement or understanding to vote such security (A)
arises solely from a revocable proxy given to such Person or any
of such Person's Affiliates or Associates in response to a public
proxy solicitation made pursuant to and in accordance with the
applicable rules and regulations of the Exchange Act, and (B) is
not also then reportable on Schedule 13D under the Exchange Act
(or any comparable or successor report);
(iv) any securities that are Beneficially Owned, directly
or indirectly, by any other Person with which such Person or any
of such Person's Affiliates or Associates has any agreement,
arrangement or understanding for the purpose of acquiring,
holding, voting (other than voting pursuant to a revocable proxy
as described in the proviso to Section 1(b)(iii) hereof) or
disposing of any securities of the Company; and
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(v) on any day on or after the Distribution Date, all
Rights that prior to such date were represented by certificates
for Common Shares that such Person Beneficially Owns on such day.
Notwithstanding anything to the contrary in this Section 1(b), a Person
engaged in business as an underwriter of securities shall not be deemed 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 40 days after the date of such
acquisition.
(c) "Business Day" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the States of Georgia or
Ohio are authorized or obligated by law or executive order to close.
(d) "Close of Business" on any given date shall mean 5:00 o'clock
p.m., Cincinnati, Ohio time, on such date; provided, however, that if such
date is not a Business Day, it shall mean 5:00 o'clock p.m., Cincinnati,
Ohio time, on the next succeeding Business Day.
(e) "Closing Price" of a stock or other security on any day shall
be the last sale price, regular way, per share of such stock or unit of
such other security on such day 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 such stock or other security is 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
such stock or other security is listed or admitted to trading or, if such
stock or other security is not listed or admitted to trading on any
national securities exchange, the last quoted sale price or, if not so
quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of
Securities Dealers, Inc. Automated Quotations System ("NASDAQ") or such
other system then in use or, if on any such date such stock or other
security is not quoted by any such organization, the average of the closing
bid and asked prices as furnished by a professional market maker that makes
a market in such stock or other security and that is selected by the Board
of Directors of the Company.
(f) "Common Share" shall mean one share of the Common Stock, par
value $.01 per share, of the Company, unless used with reference to a
Person other than the Company, in which case it shall mean one share of the
class of capital stock (or equity interest) of such other Person having the
greatest voting power per share or, if such Person is a Subsidiary of
another Person, of the Person that ultimately controls such Person.
(g) "Common Share Equivalent" shall have the meaning ascribed to
it in Section 11(a)(iii) hereof.
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(h) "Current Market Price" per share of a stock or unit of any
other security on any date shall mean the average of the daily Closing
Prices of such stock or other security for the 30 consecutive Trading Days
through and including the Trading Day immediately preceding the date in
question; provided, however, that if any event shall have caused the
Closing Price on any Trading Day during such 30-day period not to be fully
comparable with the Closing Price on the date in question (or, if no
Closing Price is available on the date in question, on the Trading Day
immediately preceding the date in question), then each such noncomparable
Closing Price so used shall be appropriately adjusted by the Board of
Directors of the Company in order to make the Closing Price on each Trading
Day during the period used for the determination of the Current Market
Price fully comparable with the Closing Price on such date in question (or,
if applicable, the immediately preceding Trading Day). "Current Market
Price" per share of any stock or unit of such other security that is not
publicly held or so listed or traded, and "Current Market Price" of any
other property, shall mean the fair value per share of such stock or unit
of such other security, or the fair value of such other property,
respectively, as determined in good faith by the Board of Directors of the
Company based upon such appraisals or valuation reports of such independent
experts as the Board of Directors shall in good faith determine
appropriate, which determination shall be described in a statement filed by
the Company with the Rights Agent.
(i) "Distribution Date" shall have the meaning ascribed to it in
Section 3 hereof.
(j) "Exchange Act" shall mean the Securities Exchange Act of 1934,
as amended.
(k) "Exchange Ratio" shall have the meaning ascribed to it in
Section 24(a) hereof.
(l) "Exempt Person" shall mean the Company, any wholly-owned
Subsidiary of the Company, any employee benefit plan of the Company or of a
Subsidiary of the Company, and any Person holding Voting Shares for or
pursuant to the terms of any such employee benefit plan.
(m) "Exercise Price" shall have the meaning ascribed to it in
Section 7(c) hereof.
(n) "Expiration Date" shall mean December 16, 2007, unless the
Distribution Date shall occur on or prior to such date and the Rights shall
have separated from the Common Shares pursuant to the terms of this
Agreement, in which case "Expiration Date" shall mean the date which is the
tenth anniversary of the Distribution Date.
(o) "Person" shall mean any individual, firm, partnership,
corporation, association, group (as such term is used in Rule 13d-5
promulgated under the Exchange Act as in effect on the date hereof) or
other entity, and shall include any successor (by merger or otherwise) of
such entity.
(p) "Preferred Share" shall mean one share of the Series A Junior
Participating Cumulative Preferred Stock, par value $0.01 per share, of the
Company, which shall have the rights and preferences set forth in the form
of Certificate of Incorporation attached hereto as Exhibit A.
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(q) "Preferred Share Equivalents" shall have the meaning ascribed
to it in Section 11(b) hereof.
(r) "Record Date" shall have the meaning ascribed to it in the
recitals hereto.
(s) "Redemption Date" shall mean the date of the action of the
Board of Directors of the Company authorizing and directing the redemption
of the Rights pursuant to Section 23(a) hereof or the exchange of the
Rights pursuant to Section 24(a) hereof.
(t) "Redemption Price" shall have the meaning ascribed to it in
Section 23(a) hereof.
(u) "Right" shall have the meaning ascribed to it in the recitals
hereto.
(v) "Rights Agent" shall have the meaning ascribed to it in the
recitals hereto.
(w) "Section 11(a)(ii) Event" shall have the meaning ascribed to it in
Section 11(a)(ii) hereof.
(x) "Section 13(a) Event" shall have the meaning ascribed to it in
Section 13(a) hereof.
(y) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(z) "Subsidiary" of any Person shall mean any corporation or other
Person of which equity securities or equity interests representing a
majority of the voting power are owned, directly or indirectly, or which is
effectively controlled, by such Person.
(aa) "Surviving Person" shall have the meaning ascribed to it in
Section 13(a) hereof.
(bb) "Trading Day" shall mean, as to any stock or other security,
a day on which the principal national securities exchange on which such
stock or other security is listed or admitted to trading is open for the
transaction of business or, if such stock or other security is not listed
or admitted to trading on any national securities exchange, a Business Day.
(cc) "Unavailable Adjustment Shares" has the meaning ascribed to it in
Section 11(a)(iii) hereof.
(dd) "Voting Share" shall mean (i) a Common Share of the Company
and (ii) any other share of capital stock of the Company entitled to vote
generally in the election of directors or entitled to vote together with
the Common Shares in respect of any merger, consolidation, sale of all or
substantially all of the Company's assets, liquidation, dissolution or
winding up. References in this Agreement to a percentage or portion of the
outstanding Voting Shares shall be deemed a reference to the percentage or
portion of the total votes entitled to be cast by the holders of the
outstanding Voting Shares.
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(ee) "15% Ownership Date" shall mean the first date after the
declaration by the Board of Directors referred to in the first recital
hereto of public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant to Section 13(d)
of the Exchange Act) by the Company or a 15% Stockholder containing the
facts by virtue of which a Person has become a 15% Stockholder.
(ff) "15% Stockholder" shall mean any Person that, together with
all Affiliates and Associates of such Person, shall be the Beneficial Owner
of such number of Voting Shares of the Company as constitutes a percentage
of the then outstanding Voting Shares that is equal to or greater than 15%;
provided, however, that the term "15% Stockholder" shall not include: (i)
an Exempt Person; (ii) any Person that, together with all Affiliates and
Associates of such Person, became the Beneficial Owner of 15% or more of
the Voting Shares of the Company on or prior to December 24, 1997
("Existing Owner"), unless and until such Existing Owner, after December
24, 1997, becomes the Beneficial Owner of additional Voting Shares
representing 1% or more of the Voting Shares or, after first becoming the
Beneficial Owner of less than 15% of the Voting Shares, again becomes the
owner of 15% or more of the Voting Shares; or (iii) any Person if such
Person would not otherwise be a 15% Stockholder but for a reduction in the
number of outstanding Voting Shares resulting from a stock repurchase
program or other similar plan of the Company or from a self-tender offer of
the Company, which plan or tender offer commenced on or after the date
hereof, provided, however, that the term "15% Stockholder" shall include
such Person from and after the first date upon which (A) such Person, since
the date of the commencement of such plan or tender offer, shall have
acquired Beneficial Ownership of, in the aggregate, a number of Voting
Shares of the Company equal to 1% or more of the Voting Shares of the
Company then outstanding and (B) such Person, together with all Affiliates
and Associates of such Person, shall Beneficially Own 15% or more of the
Voting Shares of the Company then outstanding. In calculating the
percentage of the outstanding Voting Shares that are Beneficially Owned by
a Person for purposes of this subsection (ff), Voting Shares that are
Beneficially Owned by such Person shall be deemed outstanding, and Voting
Shares that are not Beneficially Owned by such Person and that are subject
to issuance upon the exercise or conversion of outstanding conversion
rights, exchange rights, rights (other than Rights), warrants or options
shall not be deemed outstanding. Notwithstanding the foregoing, if the
Board of Directors of the Company determines in good faith that a Person
that would otherwise be a 15% Stockholder pursuant to the foregoing
provisions of this Section 1(ff) and Section 1(b) hereof has become such
inadvertently, and such Person (a) promptly notifies the Board of Directors
of such status and (b) as promptly as practicable thereafter, either
divests of a sufficient number of Voting Shares so that such Person would
no longer be a 15% Stockholder, or causes any other circumstance, such as
the existence of an agreement respecting Voting Shares, to be eliminated
such that such Person would no longer be a 15% Stockholder as defined
pursuant to this Section 1(ff) and 1(b), then such Person shall not be
deemed to be a 15% stockholder for any purposes of this Agreement. Any
determination made by the Board of Directors of the Company as to whether
any Person is or is not a 15% Stockholder shall be conclusive and binding
upon all holders of Rights.
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SECTION 2. APPOINTMENT OF RIGHTS AGENT.
The Company hereby appoints the Rights Agent to act as agent for
the Company and the holders of Rights 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, upon ten days' prior written notice to the
Rights Agent. The Rights Agent shall have no duty to supervise, and shall
in no event be liable for, the acts or omissions of any such co-Rights
Agent.
SECTION 3. ISSUANCE OF RIGHT CERTIFICATES.
(a) "Distribution Date" shall mean the date, after the date
hereof, that is the earliest of (i) the tenth Business Day (or such later
day as shall be designated by the Board of Directors of the Company)
following the date of the commencement of, or the first public announcement
of the intent of any Person, other than an Exempt Person, to commence, a
tender offer or exchange offer, the consummation of which would cause any
Person to become a 15% Stockholder, (ii) the date of the first Section
11(a)(ii) Event or (iii) the date of the first Section 13(a) Event.
(b) Until the Distribution Date, (i) the Rights shall be
represented by certificates for Common Shares (all of which certificates
for Common Shares shall be deemed to be Right Certificates) and not by
separate Right Certificates, (ii) the record holder of the Common Shares
represented by each of such certificates shall be the record holder of the
Rights represented thereby and (iii) the Rights shall be transferable only
in connection with the transfer of Common Shares. Until the earliest of the
Distribution Date, the Redemption Date or the Expiration Date, the
surrender for transfer of such certificates for Common Shares shall also
constitute the surrender for transfer of the Rights represented thereby.
(c) As soon as practicable after the Distribution Date, and after
notification by the Company, the Rights Agent shall send, at the Company's
expense, by first-class, postage-prepaid mail to each record holder of
Common Shares, as of the Close of Business on the Distribution Date, at the
address of such holder shown on the records of the Company, a Right
Certificate substantially in the form of Exhibit B hereto representing one
Right for each Common Share so held. From and after the Distribution Date,
the Rights shall be represented solely by such Right Certificates and may
only be transferred by the transfer of such Right Certificates, and the
holders of such Right Certificates, as listed in the records of the Company
or any transfer agent or registrar for such Rights, shall be the record
holders of such Rights.
(d) As soon as practicable after the Record Date, the Company
shall send a copy of a Summary of the Rights in substantially the form
attached hereto as Exhibit C by first-class, postage-prepaid mail to each
record holder of Common Shares as of the Close of Business on the Record
Date at the address of such holder shown on the records of the Company.
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(e) Certificates for Common Shares issued at any time after the
Record Date and prior to the earliest of the Distribution Date, the
Redemption Date or the Expiration Date, shall have impressed on, printed
on, written on or otherwise affixed to them the following legend:
This certificate also represents Rights that entitle the holder
hereof to certain rights as set forth in a Rights Agreement dated as of
December 16, 1997 by and between the Corporation and The Fifth Third Bank,
as Rights Agent (the "Rights Agreement"), the terms and conditions of which
are hereby incorporated herein by reference and a copy of which is on file
at the principal executive offices of the Corporation.
Under certain circumstances specified in the Rights Agreement,
such Rights will be represented by separate certificates and will no longer
be represented by this certificate. Under certain circumstances specified
in the Rights Agreement, Rights beneficially owned by certain persons may
become null and void. The Corporation will mail to the record holder of
this certificate a copy of the Rights Agreement without charge promptly
following receipt of a written request therefor.
(f) Certificates for Common Shares issued at any time on or after
the Distribution Date and prior to the earlier of the Redemption Date or
the Expiration Date shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate does not represent any Right issued
pursuant to the terms of a Rights Agreement dated as of
December 16, 1997 by and between the Corporation and The
Fifth Third Bank, as Rights Agent.
(g) In the event that at any time on or after the earlier of the
date of the first Section 11(a)(ii) Event or the date of the first Section
13(a) Event and prior to the earlier of the Redemption Date or the
Expiration Date, the Company shall issue any Common Shares pursuant to the
exercise of conversion rights, exchange rights, rights (other than Rights),
warrants or options that shall have been issued or granted prior to the
earlier of the date of the first Section 11(a)(ii) Event or the date of the
first Section 13(a) Event, then, unless the Board of Directors of the
Company shall have provided otherwise at the time of the issuance or grant
of such conversion rights, exchange rights, rights (other than Rights),
warrants or options, the Rights Agent shall, as soon as practicable after
the date of such event, send by first-class, postage-prepaid mail to the
record holder of such Common Shares, at the address of such holder as shown
on the records of the Company, a Right Certificate substantially in the
form of Exhibit B hereto representing one Right for each Common Share so
issued.
(h) Notwithstanding the foregoing provisions of this Section 3,
the Rights Agent shall not send any Right Certificate to any 15%
Stockholder or any of its Affiliates or Associates or to any Person if the
Rights held by such Person are Beneficially Owned by a 15% Stockholder or
any of its Affiliates or Associates. Any determination made by the Board of
Directors of the Company as
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to whether any Common Shares are or were Beneficially Owned at any time by
a 15% Stockholder or an Affiliate or Associate of a 15% Stockholder shall
be conclusive and binding upon all holders of Rights.
SECTION 4. FORM OF RIGHT CERTIFICATES.
The Right Certificates and the form of assignment, including
certificate, and the form of election to purchase, including certificate,
printed on the reverse thereof, when, as and if issued, shall be
substantially the same as Exhibit B hereto, and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate and as are not
inconsistent with the provisions of this Agreement, or as may be required
to comply with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock exchange upon
which the Rights or the securities of the Company issuable upon exercise of
the Rights may from time to time be listed, or to conform to usage. Subject
to Section 22 hereof, Right Certificates, whenever issued, that are issued
in respect of Common Shares that were issued and outstanding as of the
Close of Business on the Distribution Date, shall be dated as of the
Distribution Date.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its
President or any Vice President, either manually or by facsimile signature,
and may have affixed thereto the Company's seal or a facsimile thereof
attested by its Secretary or any Assistant Secretary, either manually or by
facsimile signature. The Right Certificates shall be countersigned by an
authorized signatory of the Rights Agent (which need not be the same
authorized signatory for all of the Right Certificates) and shall not be
valid for any purpose unless so countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to
be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates may
nevertheless be countersigned by an authorized signatory of the Rights
Agent and issued and delivered by the Company with the same force and
effect as though the person who signed such Right Certificates had not
ceased to be such officer of the Company. Any Right Certificate may be
signed on behalf of the Company by any person who at the actual date of
such execution shall be a proper officer of the Company to sign such Right
Certificate, even though such person was not such an officer at the date of
the execution of this Agreement.
(b) Following the Distribution Date, the Rights Agent shall keep
or cause to be kept at its offices in Cincinnati, Ohio books for
registration and transfer of the Right Certificates issued hereunder. Such
books shall show the names and addresses of the respective holders of Right
Certificates, the number of Rights represented on its face by each Right
Certificate and the date of each Right Certificate.
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SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 6(c), 7(d) and 14
hereof, at any time after the Close of Business on the Distribution Date,
and so long as the Rights represented thereby remain outstanding, any one
or more Right Certificates may be transferred, split up, combined or
exchanged for one or more Right Certificates representing the same
aggregate number of Rights as the Right Certificates surrendered. Any
registered holder desiring to transfer, split up, combine or exchange one
or more Right Certificates shall make such request in writing delivered to
the Rights Agent, and shall surrender the Right Certificates to be
transferred, split up, combined or exchanged at the office of the Rights
Agent with the form of assignment, including certificate, on the reverse
side thereof completed and duly executed, with signature guaranteed and
such other and further documentation as the Rights Agent may reasonably
request. Thereupon, the Rights Agent shall countersign and deliver to the
person entitled thereto one or more Right Certificates, as so requested.
The Company may require payment of a sum sufficient to cover any tax or
governmental charge that may be imposed in connection with any transfer,
split up, combination or exchange of Right Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them and,
at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of such Right Certificate, if mutilated,
along with signature guarantees and such other and further documentation as
the Rights Agent may reasonably request, the Company shall issue and
deliver to the Rights Agent for delivery to the record holder of such Right
Certificate a new Right Certificate of like tenor in lieu of such lost,
stolen, destroyed or mutilated Right Certificate.
(c) Notwithstanding anything to the contrary in this Section 6,
the Rights Agent shall not countersign and deliver a Right Certificate to
any Person if the Rights Agent knows such Right Certificate represents, or
would represent when held by such Person, Rights that had become or would
become null and void pursuant to Section 7(d) hereof.
SECTION 7. EXERCISE OF RIGHTS.
(a) Until the Distribution Date, no Right may be exercised.
(b) Subject to Section 7(d) and (g) hereof and the other
provisions of this Agreement, at any time after the Close of Business on
the Distribution Date and prior to the Close of Business on the earlier of
the Redemption Date or the Expiration Date, the registered holder of any
Right Certificate may exercise the Rights represented thereby in whole or
in part upon surrender of such Right Certificate, with the form of election
to purchase, including certificate, on the reverse side thereof completed
and duly executed, with signature guaranteed, to the Rights Agent at the
office or agency of the Rights Agent in Cincinnati, Ohio, along with a
signature guarantee and such other
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and further documentation as the Rights Agent may reasonably request,
together with payment of the Exercise Price for each Right exercised. Upon
the exercise of an exercisable Right and payment of the Exercise Price in
accordance with the provisions of this Agreement, the holder of such Right
shall be entitled to receive, subject to adjustment as provided herein, one
one-hundredth of a Preferred Share (or, following the occurrence of a
Section 11(a)(ii) Event or a Section 13(a) Event, Common Shares, other
securities, cash and/or other property in accordance with the provisions of
this Agreement).
(c) The Exercise Price for the exercise of each Right shall
initially be $95 (Ninety-five dollars) and shall be payable in lawful money
of the United States of America in accordance with Section 7(f) hereof. The
Exercise Price and the number of Preferred Shares (or, following the
occurrence of a Section 11(a)(ii) Event or a Section 13(a) Event, Common
Shares, cash and/or other property in accordance with the provisions of
this Agreement) to be acquired upon exercise of a Right shall be subject to
adjustment from time to time as provided in Sections 7(e), 11 and 13 hereof
and the other provisions of this Agreement.
(d) Notwithstanding anything in this Agreement to the contrary,
from and after the earlier of the date of the first Section 11(a)(ii) Event
or the date of the first Section 13(a) Event, any Rights that are or were
Beneficially Owned by a 15% Stockholder or any Affiliate or Associate of a
15% Stockholder at any time on or after the Distribution Date shall be null
and void, and for all purposes of this Agreement such Rights shall
thereafter be deemed not to be outstanding, and any holder of such Rights
(whether or not such holder is a 15% Stockholder or an Affiliate or
Associate of a 15% Stockholder) shall thereafter have no right to exercise
such Rights.
(e) Prior to the Distribution Date, if the Board of Directors of
the Company shall have determined that such action adequately protects the
interests of the holders of Rights, the Company may, in its discretion,
substitute for all or any portion of the Preferred Shares that would
otherwise be issuable (after the Close of Business on the Distribution
Date) upon the exercise of each Right and payment of the Exercise Price,
(i) cash, (ii) other equity securities of the Company, (iii) debt
securities of the Company, (iv) other property or (v) any combination of
the foregoing, in each case having an aggregate Current Market Price equal
to the aggregate Current Market Price of the Preferred Shares for which
substitution is made. Subject to Section 7(d) hereof, in the event that the
Company takes any action pursuant to this Section 7(e), such action shall
apply uniformly to all outstanding Rights.
(f) Upon receipt of a Right Certificate representing exercisable
Rights, with the form of election to purchase, including certificate,
completed and duly executed, with signature guaranteed, accompanied by
payment of the Exercise Price for each Right to be exercised and an amount
equal to any applicable transfer tax required to be paid by the holder of
such Right Certificate in accordance with Section 9 hereof by certified
check or cashier's check payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) requisition from the transfer agent of
the Preferred Shares (or, following the occurrence of a Section 11(a)(ii)
Event or a Section 13(a) Event, Common Shares, other securities, cash
and/or other property in accordance with the provisions of
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this Agreement), certificates for the number of Preferred Shares (or such
other securities) to be purchased, and the Company hereby irrevocably
authorizes such transfer agent to comply with all such requests, and/or, as
provided in Section 14 hereof, requisition from the depositary agent
described therein depositary receipts representing such number of
one-hundredths of a Preferred Share (or such other securities) as are to be
purchased (in which case certificates for the Preferred Shares (or such
other securities) represented by such receipts shall be deposited by the
transfer agent with such depositary agent) and the Company hereby directs
such depositary agent to comply with such request, (ii) when appropriate,
requisition from the Company the amount of cash to be paid in lieu of
issuance of fractional Preferred Shares (or such other securities) in
accordance with Section 14 hereof, (iii) after receipt of such
certificates, depositary receipts or cash, cause the same to be delivered
to or upon the order of the registered holder of such Right Certificate,
registered in such name or names as may be designated by such holder and
(iv) when appropriate, after receipt thereof, deliver such cash to or upon
the order of the registered holder of such Right Certificate.
(g) Notwithstanding the foregoing provisions of this Section 7,
the exercisability of the Rights shall be suspended for such period as
shall reasonably be necessary for the Company to register under the
Securities Act and any applicable securities law of any jurisdiction the
Preferred Shares to be issued pursuant to the exercise of the Rights;
provided, however, that nothing contained in this Section 7 shall relieve
the Company of its obligations under Section 9(c) hereof.
(h) In case the registered holder of any Right Certificate shall
exercise less than all of the Rights represented thereby, a new Right
Certificate representing Rights equivalent to the Rights remaining
unexercised shall be issued by the Rights Agent to the registered holder of
such Right Certificate or to such holder's duly authorized assigns, subject
to the provisions of Section 14 hereof.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the
Company or to any of its agents, be delivered to the Rights Agent for
cancellation or in canceled form, or, if surrendered to the Rights Agent,
shall be canceled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by this Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any other Right Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The
Rights Agent shall deliver all canceled Right Certificates to the Company
or shall, at the written request of the Company, destroy such canceled
Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) Subject to Section 7(e) hereof, the Company shall cause to be
reserved and kept available out of its authorized and unissued equity
securities (or out of its authorized and issued
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equity securities held in its treasury), the number of such equity
securities that will from time to time be sufficient to permit the exercise
in full of all outstanding Rights.
(b) In the event that any securities issuable upon exercise of the
Rights are listed on any national securities exchange, the Company shall
use its best efforts, from and after such time as the Rights become
exercisable, to cause all such securities issued or reserved for such
issuance to be listed on such exchange upon official notice of issuance
upon such exercise.
(c) If necessary to permit the issuance of securities upon
exercise of the Rights, the Company shall use its best efforts, from and
after the Distribution Date, to register such securities under the
Securities Act and any applicable securities laws and to keep such
registration effective until the earlier of the Redemption Date or the
Expiration Date.
(d) The Company shall take all such action as may be necessary to
ensure that all securities delivered upon exercise of the Rights shall, at
the time of delivery of the certificates for such securities (subject to
payment of the Exercise Price), be duly and validly authorized and issued
and fully paid and nonassessable securities.
(e) The Company shall pay when due and payable any and all federal
and state transfer taxes and charges that may be payable in respect of the
issuance or delivery of the Right Certificates or of any securities upon
the exercise of Rights. The Company shall not, however, be required to pay
any transfer tax that may be payable in respect of any transfer or delivery
of a Right Certificate to a Person other than, or the issuance or delivery
of a certificate for securities in respect of a name other than that of,
the registered holder of the Right Certificate representing Rights
surrendered for exercise, or to issue or deliver any certificate for
securities upon the exercise of any Right until any such tax shall have
been paid (any such tax being payable by the holder of such Right
Certificate at the time of surrender) or until it has been established to
the Company's satisfaction that no such tax is due.
(f) With respect to the Common Shares and/or other securities
issuable pursuant to Section 11(a)(ii) and (iii) hereof, the foregoing
covenants shall be applicable only upon and following the occurrence of a
Section 11(a)(ii) Event.
SECTION 10. SECURITIES RECORD DATE.
Each person in whose name any certificate for securities of the
Company is issued upon the exercise of Rights shall for all purposes be
deemed to have become the holder of record of the securities represented
thereby on, and such certificate shall be dated, the date upon which the
Right Certificate representing such Rights was duly surrendered and payment
of the Exercise Price (and any applicable transfer taxes) was made;
provided, however, that if the date of such surrender and payment is a date
upon which the securities transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such securities
on, and such certificate shall
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be dated, the next succeeding Business Day on which the securities transfer
books of the Company are open.
SECTION 11. ADJUSTMENT OF EXERCISE PRICE, NUMBER OF SHARES ISSUABLE UPON
EXERCISE OF RIGHTS OR NUMBER OF RIGHTS.
The Exercise Price, the number and kind of securities that may be
purchased upon exercise of a Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) In the event that the Company shall at any time after the
Close of Business on the Record Date and prior to the Close of
Business on the earlier of the Redemption Date or the Expiration
Date (A) declare or pay any dividend on the Preferred Shares
payable in Preferred Shares or Voting Shares, (B) subdivide the
outstanding Preferred Shares, (C) combine the outstanding
Preferred Shares into a smaller number of Preferred Shares or (D)
issue Preferred Shares or Voting Shares in a reclassification of
the Preferred Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is
the continuing or surviving corporation), then, and upon each such
event, the number and kind of Preferred Shares or other securities
issuable upon the exercise of a Right on the date of such event
shall be proportionately adjusted so that the holder of any Right
exercised on or after such date shall be entitled to receive, upon
the exercise thereof and payment of the Exercise Price, the
aggregate number and kind of Preferred Shares or other securities
or other property, as the case may be, that, if such Right had
been exercised immediately prior to such date and at a time when
such Right was exercisable and the transfer books of the Company
were open, such holder would have owned upon such exercise and
would have been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification. If an event occurs
that 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 (a "Section 11(a)(ii) Event") that a
15% Ownership Date shall have occurred and neither the Redemption
Date nor the Expiration Date shall have occurred prior to the
tenth Business Day following such 15% Ownership Date, then, and
effective as of the end of such tenth Business Day, proper
provision shall be made so that except as provided in Section 7(d)
hereof, each holder of a Right shall thereafter have the right to
receive, upon the exercise thereof in accordance with the terms of
this Agreement and payment of the then current Exercise Price, in
lieu of the securities or other property otherwise purchasable
upon such exercise, such number of Common Shares of the Company as
shall equal the result obtained by multiplying the then current
Exercise Price by the then number of one-hundredths of a Preferred
Share for which a Right was exercisable (or, if the Distribution
Date shall not have occurred prior to the date of such Section
11(a)(ii) Event, the number of one-hundredths of a Preferred Share
for which a Right would have been
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exercisable if the Distribution Date had occurred on the Business
Day immediately preceding the date of such Section 11(a)(ii)
Event) immediately prior to such Section 11(a)(ii) Event, and
dividing that product by 50% of the Current Market Price
(determined pursuant to Section 11(d) hereof) of a Common Share on
the date of occurrence of the relevant Section 11(a)(ii) Event
(such number of shares being hereinafter referred to as the
"Adjustment Shares"). Successive adjustments shall be made
pursuant to this paragraph each time a Section 11(a)(ii) Event
occurs.
(iii) In the event that on the date of a Section
11(a)(ii) Event the aggregate number of Common Shares that are
authorized by the Company's Restated Certificate of Incorporation
but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights is less than the aggregate number
of Adjustment Shares thereafter issuable upon the exercise in full
of the Rights in accordance with Section 11(a)(ii) hereof (the
excess of such number of Adjustment Shares over and above such
number of Common Shares being hereinafter referred to as the
"Unavailable Adjustment Shares"), then, and upon each such event,
the Company shall substitute for the pro rata portion of the
Unavailable Adjustment Shares that would otherwise be issuable
thereafter upon the exercise of each Right and payment of the
Exercise Price, (A) cash, (B) other equity securities of the
Company (including, without limitation, shares of preferred stock
of the Company or units of such shares having the same Current
Market Price as one Common Share (a "Common Share Equivalent")),
(C) debt securities of the Company, (D) other property or (E) any
combination of the foregoing, in each case having an aggregate
Current Market Price equal to the aggregate Current Market Price
of the Unavailable Adjustment Shares for which substitution is
made. Subject to Section 7(d) hereof, in the event that the
Company takes any action pursuant to this Section 11(a)(iii), such
action shall apply uniformly to all outstanding Rights.
(b) In the event that the Company shall, at any time after the
Close of Business on the Record Date and prior to the Close of Business on
the earlier of the Redemption Date or the Expiration Date, fix a record
date prior to the earlier of the Redemption Date or the Expiration Date for
the issuance of rights, options or warrants to all holders of Preferred
Shares entitling them initially to subscribe for or purchase Preferred
Shares (or shares having the same rights, privileges and preferences as the
Preferred Shares ("Preferred Share Equivalents")) or securities convertible
into Preferred Shares or Preferred Share Equivalents, at a price per
Preferred Share or Preferred Share Equivalent (or having a conversion price
per share, if a security convertible into Preferred Shares or Preferred
Share Equivalents) less than the Current Market Price per Preferred Share
on such record date, then, and upon each such event, the Exercise Price to
be in effect after such record date shall be determined by multiplying the
Exercise Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be equal to the sum of the number of
Preferred Shares outstanding on such record date plus the number of
Preferred Shares that the aggregate offering price of the total number of
Preferred Shares and/or Preferred Share Equivalents to be so offered
(and/or the aggregate initial conversion price of the convertible
securities to be so offered) would purchase at such Current Market Price,
and the denominator of which shall be equal to the
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number of Preferred Shares outstanding on such record date plus the number
of additional Preferred Shares and/or Preferred Share Equivalents to be
offered for subscription or purchase (or into which the convertible
securities to be so offered are initially convertible); provided, however,
that if such rights, options or warrants are not exercisable immediately
upon issuance but become exercisable only upon the occurrence of a
specified event or the passage of a specified period of time, then the
adjustment to the Exercise Price shall be made and become effective only
upon the occurrence of such event or such passage of time, and such
adjustment shall be made as if the record date for the issuance of such
rights, options or warrants had been the business day immediately preceding
the date upon which such rights, options or warrants became exercisable.
Preferred Shares owned by or held for the account of the Company shall not
be deemed outstanding for the purpose of any such computation. Such
adjustment to the Exercise Price 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 Exercise Price shall be adjusted to be the Exercise Price
that would then be in effect if such record date had not been fixed.
(c) In the event that the Company shall, at any time after the
Close of Business on the Record Date and prior to the Close of Business on
the earlier of the Redemption Date or the Expiration Date, fix a record
date for the making of a distribution to all holders of the Preferred
Shares (including any such distribution made in connection with a
consolidation or merger in which the Company is the surviving corporation)
of securities or assets (other than a distribution of securities for which
an adjustment is required under Section 11(a)(i) or (b) hereof or a regular
quarterly cash dividend), then the Exercise Price to be in effect after
such record date shall be determined by multiplying the Exercise Price in
effect immediately prior to such record date by a fraction, the numerator
of which shall be equal to the excess of the Current Market Price per
Preferred Share on such record date over and above the fair market value of
the portion of the securities or assets to be so distributed with respect
to one Preferred Share, and the denominator of which shall be equal to such
Current Market Price per Preferred Share. Such adjustments shall be made
successively whenever such a record date is fixed, and in the event that
such a distribution is not so made, the Exercise Price shall be adjusted to
be the Exercise Price that would then be in effect if such record date had
not been fixed.
(d) For the purpose of any computation under this Section 11, if
the Preferred Shares are not publicly held or traded, the "Current Market
Price" per Preferred Share shall be conclusively deemed to be the Current
Market Price per Common Share multiplied by 100.
(e) No adjustment in the Exercise Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Exercise Price; provided, however, that any adjustments that by reason of
this Section 11(e) are not required to be made shall be cumulated and taken
into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest
one-hundredth of a Common Share or other share or one-ten thousandth of a
Preferred Share, as the case may be.
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(f) If, as a result of an adjustment made pursuant to Section
11(a) hereof, the holder of any Right thereafter exercised shall become
entitled to receive any securities of the Company other than Preferred
Shares, the number of such other securities so receivable upon exercise of
any Right shall be subject to adjustment from time to time in a manner and
on terms as nearly equivalent as practicable to the provisions with respect
to Preferred Shares contained in this Section 11, and the other provisions
of this Agreement with respect to Preferred Shares shall apply on like
terms to any such other securities.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Exercise Price hereunder shall represent the right
to purchase, at the adjusted Exercise Price, the number of one-hundredths
of a Preferred Share purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i) below, upon each adjustment of the Exercise Price
as a result of the calculations made in Sections 11(b) and (c) hereof, each
Right outstanding immediately prior to the making of such adjustment shall
thereafter represent the right to purchase, at the adjusted Exercise Price,
that number of one-hundredths of a Preferred Share (calculated to the
nearest one-ten thousandth of a Preferred Share) obtained by multiplying
(i) the number of one-hundredths of a Preferred Share purchasable upon the
exercise of one Right immediately prior to such adjustment of the Exercise
Price by (ii) the Exercise Price in effect immediately prior to such
adjustment, and dividing the product so obtained by the Exercise Price in
effect immediately after such adjustment.
(i) The Company may elect, on or after the date of any adjustment
of the Exercise Price, to adjust the number of Rights instead of making any
adjustment in the number of Preferred Shares purchasable upon the exercise
of a Right. Each of the Rights outstanding after such adjustment of the
number of Rights shall be exercisable for the number of one-hundredths of a
Preferred Share for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest one one-hundredth of a Right) obtained by dividing the Exercise
Price in effect immediately prior to the adjustment of the Exercise Price
by the Exercise Price in effect immediately after such adjustment of the
Exercise Price. The Company shall make a public announcement of its
election to adjust the number of Rights pursuant to this Section 11(i),
indicating the record date for the adjustment and, if known at the time,
the amount of the adjustment to be made. Such record date may be the date
on which the Exercise Price is adjusted or any day thereafter, but, if
separate Right Certificates have been issued, it shall be at least 10 days
after the date of such public announcement. If separate Right Certificates
have been issued, upon each adjustment of the number of Rights pursuant to
this Section 11(i), the Company shall, as promptly as practicable, cause to
be distributed to holders of record of Right Certificates on such record
date Right Certificates representing, 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, cause to be distributed
to such holders of record in substitution and replacement for the Right
Certificates held by such holders prior to the date of such adjustment, and
upon surrender thereof if required by the Company, new Right Certificates
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representing all the Rights to which such holders shall be entitled after
such adjustment. Right Certificates to be so distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear,
at the option of the Company, the adjusted Exercise Price) and shall be
registered in the names of the holders of record of Right Certificates on
the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Exercise Price
or the number of one-hundredths of a Preferred Share issuable upon the
exercise of one Right, the Right Certificates theretofore and thereafter
issued may continue to express the Exercise Price per one one-hundredth of
a Preferred Share and the number of Preferred Shares issuable upon the
exercise of one Right that were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Exercise Price below one one-hundredth of the then par value,
if any, of the Preferred Shares issuable upon exercise of the Rights, the
Company shall take any corporate action that may, in the advice or opinion
of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable one one-hundredths of a
Preferred Share at such adjusted Exercise Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Exercise Price be made effective as of a record date for
a specified event, the Company may elect to defer, until the occurrence of
such event, the issuance to the holder of any Right exercised after such
record date of the number of one-hundredths of a Preferred Share and other
capital stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one-hundredths of a Preferred Share
and other capital stock or securities of the Company, if any, issuable upon
such exercise on the basis of the Exercise Price in effect prior to such
adjustment; provided, however, that the Company shall deliver to such
holder a due ▇▇▇▇ or other appropriate instrument representing such
holder's right to receive such additional shares 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 further adjustments in the
number of one-hundredths of a Preferred Share that may be purchased upon
exercise of one Right, and such further adjustments in the Exercise Price,
in addition to those adjustments expressly required by this Section 11, as
and to the extent that it in its sole discretion shall determine to be
advisable in order that any (i) consolidation or subdivision of the
Preferred Shares, (ii) issuance wholly for cash of any Preferred Shares at
less than the Current Market Price thereof, (iii) issuance wholly for cash
of Preferred Shares or securities that by their terms are convertible into
or exchangeable for Preferred Shares, (iv) dividends on Preferred Shares
payable in Preferred Shares or (v) issuance of rights, options or warrants
referred to Section 11(b) hereof, hereafter made by the Company to holders
of its Preferred Shares shall not be taxable to such stockholders.
(n) In the event that the Company shall, at any time after the
Close of Business on the Record Date and prior to the Close of Business on
the earliest of the date of the first Section 11(a)(ii)
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Event, the date of the first Section 13(a) Event, the Redemption Date or
the Expiration Date, (i) pay any dividend on the Common Shares payable in
Common Shares, (ii) subdivide the outstanding Common Shares, (iii) combine
the outstanding Common Shares into a smaller number of Common Shares or
(iv) issue Common Shares in a reclassification of the Common Shares
(including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation),
then, and upon each such event, the Exercise Price to be in effect after
such event shall be determined by multiplying the Exercise Price in effect
immediately prior to such event by a fraction, the numerator of which shall
be equal to the number of Common Shares outstanding immediately prior to
such event and the denominator of which shall be equal to the number of
Common Shares outstanding immediately after such event. Successive
adjustments shall be made pursuant to this Section 11(n) each time such a
dividend is paid or such a subdivision, combination or reclassification is
effected. If an event occurs that would require an adjustment under both
this Section 11(n) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(n) shall be in addition to, and shall be made prior
to, any adjustment required pursuant to Section 11(a)(ii) hereof.
SECTION 12. CERTIFICATE OF ADJUSTED EXERCISE PRICE OR NUMBER OF SHARES
ISSUABLE UPON EXERCISE OF RIGHTS.
Whenever an adjustment is made as provided in Section 11 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment and a brief statement of the facts giving rise to such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the securities issuable upon exercise of the Rights a copy of such
certificate and (c) mail a brief summary thereof to each holder of Rights
in accordance with Section 25 hereof. Notwithstanding the foregoing
sentence, the failure of the Company to make such certification or to give
such notice shall not affect the validity or the force and effect of such
adjustment. Any adjustment to be made pursuant to Sections 11 or 13 hereof
shall be effective as of the date of the event giving rise to such
adjustment.
SECTION 13. CONSOLIDATION, MERGER, OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER.
(a) In the event (a "Section 13(a) Event") that, at any time on or
after the 15% Ownership Date and prior to the earlier of the Redemption
Date or the Expiration Date, (1) the Company shall, directly or indirectly,
consolidate with or merge with and into any other Person and the Company
shall not be the continuing or surviving corporation in such consolidation
or merger, (2) any Person shall, directly or indirectly, consolidate with
or merge with and into the Company and the Company shall be the continuing
or surviving corporation in such merger and, in connection with such
merger, all or part of the Common Shares shall be changed into or exchanged
for stock or other securities of any Person or cash or any other property,
or (3) the Company and/or any one or more of its Subsidiaries shall,
directly or indirectly, sell or otherwise transfer, in one or more
transactions (other than transactions in the ordinary course of business),
assets or earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to any Person
or Persons other than the Company or one or more of its wholly owned
Subsidiaries (such
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Persons, together with the Persons described in clauses (1) and (2) above
shall be collectively referred to in this Section 13 as the "Surviving
Person"), then, and in each such case, proper provision shall be made so
that:
(i) except as provided in Section 7(d) hereof, each
holder of a Right shall thereafter have the right to receive, upon
the exercise thereof in accordance with the terms of this
Agreement and payment of the then current Exercise Price, in lieu
of the securities or other property otherwise purchasable upon
such exercise, such number of validly authorized and issued, fully
paid and nonassessable Common Shares of the Surviving Person as
shall be equal to a fraction, the numerator of which is the
product of the then current Exercise Price multiplied by the
number of one-hundredths of a Preferred Share purchasable upon the
exercise of one Right immediately prior to the first Section 13(a)
Event (or, if the Distribution Date shall not have occurred prior
to the date of such Section 13(a) Event, the number of
one-hundredths of a Preferred Share that would have been so
purchasable if the Distribution Date had occurred on the Business
Day immediately preceding the date of such Section 13(a) Event,
or, if a Section 11(a)(ii) Event has occurred prior to such
Section 13(a) Event, the product of the number of one-hundredths
of a Preferred Share purchasable upon the exercise of a Right (or,
if the Distribution Date shall not have occurred prior to the date
of such Section 11(a)(ii) Event, the number of one-hundredths of a
Preferred Share that would have been so purchasable if the
Distribution Date had occurred on the Business Day immediately
preceding the date of such Section 11(a)(ii) Event) immediately
prior to such Section 11(a)(ii) Event, multiplied by the Exercise
Price in effect immediately prior to such Section 11(a)(ii)
Event), and the denominator of which is 50% of the Current Market
Price per Common Share of the Surviving Person on the date of
consummation of such Section 13(a) Event;
(ii) the Surviving Person shall thereafter be liable for
and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant
to this Agreement;
(iii) the term, "Company," shall thereafter be deemed to
refer to the Surviving Person; and
(iv) the Surviving Person shall take such steps
(including, but not limited to, the reservation of a sufficient
number of its Common Shares in accordance with Section 9 hereof)
in connection with such consummation as may be necessary to ensure
that the provisions hereof shall thereafter be applicable to its
Common Shares thereafter deliverable upon the exercise of Rights.
(b) Notwithstanding the foregoing, if the Section 13(a) Event is
the sale or transfer in one or more transactions of assets or earning power
aggregating more than 50% of the assets or earning power of the Company and
its Subsidiaries (taken as a whole), but less than 100% thereof, then each
Person acquiring all or a portion thereof shall assume the obligations of
the Company as to a fraction
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of each of the Rights equal to the fraction of the assets of the Company
and its Subsidiaries (taken as a whole) acquired by such Person, and the
obligations of the Company as to the remaining fraction of each of the
Rights shall continue to be the obligations of the Company.
(c) The Company shall not consummate a Section 13(a) Event unless
prior thereto the Company and the Surviving Person shall have executed and
delivered to the Rights Agent a supplemental agreement confirming that such
Surviving Person shall, upon consummation of such Section 13(a) Event,
assume this Agreement in accordance with Section 13 hereof, that all rights
of first refusal or preemptive rights in respect of the issuance of Common
Shares of such Surviving Person upon exercise of outstanding Rights have
been waived and that such Section 13(a) Event shall not result in a default
by such Surviving Person under this Agreement, and further providing that,
as soon as practicable after the date of consummation of such Section 13(a)
Event, such Surviving Person shall:
(i) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form,
use its best efforts to cause such registration statement to
become effective as soon as practicable after such filing, use its
best efforts to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements
of the Securities Act) until the Expiration Date, and similarly
comply with all applicable state securities laws;
(ii) use its best efforts to list (or continue the
listing of) the Rights and the Common Shares of the Surviving
Person purchasable upon exercise of the Rights on a national
securities exchange, or use its best efforts to cause the Rights
and such Common Shares to meet the eligibility requirements for
quotation on NASDAQ; and
(iii) deliver to holders of the Rights historical
financial statements for such Surviving Person that comply in all
respects with the requirements for registration on Form 10 (or any
successor form) under the Exchange Act.
(d) In the event that at any time after the occurrence of a
Section 11(a)(ii) Event some or all of the Rights shall not have been
exercised pursuant to Section 11 hereof prior to the date of a Section
13(a) Event, such Rights shall thereafter be exercisable only in the manner
described in Section 13(a) hereof. In the event that a Section 11(a)(ii)
Event occurs on or after the date of a Section 13(a) Event, Rights shall
not be exercisable pursuant to Section 11 hereof but shall instead be
exercisable pursuant to, and only pursuant to, this Section 13.
(e) The provisions of this Section 13 shall apply to each
successive merger, consolidation, sale or other transfer constituting a
Section 13(a) Event.
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SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates that represent fractional Rights. If
the Company shall determine not to issue such fractional Rights, the
Company shall pay to the registered holders of the Right Certificates with
respect to which such fractional Rights would otherwise be issuable, at the
time such fractional Rights would otherwise have been issued as provided
herein, an amount in cash equal to the same fraction of the Current Market
Price of a whole Right on the Business Day immediately prior to the date
upon which such fractional Rights would otherwise have been issuable.
(b) The Company shall not be required to issue fractions of Common
Shares or Preferred Shares (other than fractions that are integral
multiples of one one-hundredth of a Preferred Share) upon exercise of
Rights, or to distribute certificates that represent fractional Common
Shares or Preferred Shares (other than fractions that are integral
multiples of one one-hundredth of a Preferred Share). Fractions of
Preferred Shares in integral multiples of one one-hundredth of a Preferred
Share may, at the election of the Company, be represented by depositary
receipts, pursuant to an appropriate agreement between the Company and a
depositary selected by it, provided that such agreement shall provide that
the holders of such depositary receipts shall have all the rights,
privileges and preferences to which they are entitled as beneficial owners
of Preferred Shares. If the Company shall determine not to issue fractional
Common Shares or Preferred Shares (or depositary receipts in lieu of
Preferred Shares), the Company shall pay to the registered holders of Right
Certificates with respect to which such fractional Common Shares or
Preferred Shares would otherwise be issuable, at the time such Rights are
exercised as provided herein, an amount in cash equal to the same fraction
of the Current Market Price of a whole Common Share or Preferred Share, as
the case may be. For purposes of this Section 14(b), the Current Market
Price of a whole Common Share or Preferred Share shall be the Closing Price
per share for the Trading Day immediately prior to the date of such
exercise.
(c) The holder of a Right, by the acceptance of such Right,
expressly waives such holder's right to receive any fractional Rights or
any fractional Common Shares or Preferred Shares upon exercise of such
Right, except as permitted by this Section 14.
SECTION 15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement, except the
rights of action given to the Rights Agent under Section 18 hereof, are
vested in the respective registered holders of the Right Certificates and
certificates for Common Shares representing Rights, and any registered
holder of any Right Certificate or of such certificate for Common Shares,
without the consent of the Rights Agent or of the holder of any other Right
Certificate or any other certificate for Common Shares may, in such
holder's own behalf and for such holder's own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company
to enforce, or otherwise act in respect of, such holder's right to exercise
the Rights represented by such Right Certificate or by such certificate for
Common Shares in the manner provided in such Certificate and in this
Agreement.
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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, and injunctive relief against actual or
threatened violations, of the obligations of any Person under this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS.
Every holder of a Right, by accepting the same, consents and agrees
with the Company and the Rights Agent and every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be represented by
certificates for Common Shares registered in the name of the holders of such
Common Shares (which certificates for Common Shares shall also constitute Right
Certificates), and each such Right shall be transferable only in connection with
the transfer of such Common Shares;
(b) after the Distribution Date, the Right Certificates shall only be
transferable on the registry books of the Rights Agent if surrendered at the
principal office of the Rights Agent, duly endorsed or accompanied by a proper
instrument of transfer along with a signature guarantee and such other and
further documentation as the Rights Agent may reasonably request; and
(c) the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate is registered as the absolute owner thereof and
of the Rights represented thereby (notwithstanding any notations of ownership or
writing on the Right Certificate by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor the Rights Agent
shall be affected by any notice to the contrary.
SECTION 17. RIGHT HOLDER AND RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Right or Right Certificate shall be entitled
to vote, receive dividends or be deemed for any purpose the holder of the
securities of the Company that may at any time be issuable upon the exercise of
the Rights represented thereby, nor shall anything contained herein or in any
Right Certificate be construed to confer upon the holder of any Right or Right
Certificate, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, to give or withhold consent to any
corporate action, to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or subscription rights, or otherwise, in each case until such Right or the
Rights represented by such Right Certificate shall have been exercised in
accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent the compensation
agreed to in writing by the Company and the Rights Agent for all services
rendered by it hereunder, as well as
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its reasonable out-of-pocket expenses. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, or
expense, incurred without gross negligence, bad faith or willful misconduct on
the part of the Rights Agent, for anything done or omitted by the Rights Agent
in connection with the acceptance and administration of this Agreement,
including, without limitation, the costs and expenses of defending against any
claim of liability arising under this Agreement.
(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 Right Certificate
or certificate for the Preferred Shares or Common Shares or for other securities
of the Company, instrument of assignment or transfer, power of attorney,
endorsement, affidavit, letter, notice, direction, consent, certificate,
statement, or other paper or document believed by it to be genuine and to be
signed and executed by the proper person or persons, or otherwise upon the
advice of its counsel as set forth in Section 20 hereof.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any corporation
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any corporation succeeding to the
corporate trust or stock transfer 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 instrument or any further act on the part
of any of the parties hereto, provided that such corporation would be eligible
for appointment as a successor Rights Agent under the provisions of Section 21
hereof. If, at the time such successor Rights Agent shall succeed to the agency
created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificates so countersigned; and if at that time any of the Right Certificates
shall not have been countersigned, any successor Rights Agent may countersign
such Right Certificates either in the name of the predecessor Rights Agent or in
the name of the successor Rights Agent; and in all such cases such Right
Certificates shall have the full force provided in such Right Certificates, and
in this Agreement.
(b) If at any time the name of the Rights Agent shall be changed, and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and if at that time any of the
Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in such Right Certificates and in this Agreement.
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SECTION 20. DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes the duties and obligations expressly
imposed by this Agreement (and no implied duties or obligations shall be read
into this Agreement against the Rights Agent) upon the following terms and
conditions, by all of which the Company and the holders of Right Certificates,
by their acceptance of the Rights, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to any
action taken or omitted by it in good faith and in accordance with such advice
or opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking or suffering any action
hereunder, such fact or matter (unless other evidence in respect thereof be
herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board, the
Chief Executive Officer, the President, any Vice President, the Treasurer, 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 to the Company and any
other Person only for its own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement, or in the Right
Certificates (except its countersignature thereof), or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent is serving as an administrative agent and
accordingly, shall not be under any responsibility in respect of the legality or
validity of any of the provisions of this Agreement or the execution and
delivery hereof (except the due authorization, execution and delivery hereof by
the Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including any Rights becoming null
and void pursuant to Section 7(d) hereof) or any adjustment in the terms of the
Rights (including the manner, method or amount thereof) provided for in Sections
7, 11, 13 and 23 hereof, or the ascertaining of the existence of facts that
would require any such change or adjustment (except with respect to the exercise
of Rights represented by Right Certificates after actual notice that such change
or adjustment is required); nor shall it by any act hereunder be deemed to make
any representation or warranty as to the authorization or reservation of any
Preferred Shares or Common
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Shares or other securities to be issued pursuant to this Agreement or any Right
Certificate, or as to whether any Preferred Shares or Common Shares or other
securities will, when issued, be validly authorized and issued, fully paid and
nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
one of the Chairman of the Board, the Chief Executive Officer, the President,
any Vice President, the Treasurer, the Secretary, or any Assistant Secretary 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 or for any delay in acting while awaiting instructions.
At any time the Rights Agent may apply to the Company for written
instructions with respect to any matter arising in connection with the Rights
Agent's duties and obligations arising under this Agreement. Such application by
the Rights Agent for written instructions from the Company may, at the option of
the Rights Agent, set forth in writing any action proposed to be taken or
omitted by the Rights Agent with respect to its duties or obligations under this
Agreement and the date on and/or after which such action shall be taken or
omitted in accordance with a proposal included in any such application on or
after the date specified therein (which date shall be not less than one Business
Day after the Company receives such application, without the Company's consent)
unless, prior to taking or initiating any such action (or the effective date in
the case of an omission), the Rights Agent has received written instructions in
response to such application specifying the action to be taken or omitted.
(h) The Rights Agent and any stockholder, director, officer or employee
of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, provided that reasonable care was exercised in the
selection thereof.
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(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
SECTION 21. CHANGE OF RIGHTS AGENT.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days' notice in writing
mailed to the Company. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent or
successor Rights Agent, as the case may be, and to each transfer agent of the
Common Shares and Preferred Shares by registered or certified mail, and to the
holders of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting as such, the
Company shall appoint a successor to the Rights Agent. If the Company shall fail
to make such appointment within a period of 30 days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit such holder's Right
Certificate for inspection by the Company), then the Company shall become the
Rights Agent and the registered holder of any Right Certificate may apply to any
court of competent jurisdiction for the appointment of a new Rights Agent. Any
successor Rights Agent, whether appointed by the Company or by such a court,
shall be a corporation organized and doing business under the laws of the United
States or of the States of Georgia or Ohio (or of any other state of the United
States so long as such corporation is authorized to do business as a banking
institution in the States of Georgia or Ohio), in good standing, that is
authorized under such laws to exercise corporate trust or stock transfer powers
and is subject to supervision or examination by federal or state authority and
that has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000. 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 of this
Agreement and so that the successor Rights Agent may appropriately act as Rights
Agent hereunder. Not later than the effective date of any such appointment, the
Company shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Shares and Preferred Shares, and mail a
notice thereof in writing to the registered holders of the Right Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the Right
Certificates to the contrary, the Company may, at its option (subject to Section
4 hereof), issue new Right Certificates
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in such form as may be approved by the Board of Directors in order to reflect
any adjustment or change in the Exercise Price and the number or kind or class
of shares or other securities or property purchasable upon exercise of the
Rights in accordance with the provisions of this Agreement.
SECTION 23. REDEMPTION OF RIGHTS.
(a) Until the earliest of (i) the date of the first Section 11(a)(ii)
Event, (ii) the date of the first Section 13(a) Event or (iii) the Expiration
Date, the Board of Directors of the Company may, at its option, authorize and
direct the redemption of all, but not less than all, of the then outstanding
Rights at a redemption price of $0.001 per Right, as such redemption price shall
be appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (the "Redemption Price"), and the
Company shall so redeem the Rights; provided, however, that from and after the
first date upon which there shall exist a 15% Stockholder, any redemption of the
Rights shall require, in addition to the approval of the Board of Directors of
the Company, the approval of a majority of those directors of the Company who
were directors prior to such date.
(b) Immediately upon the action of the Board of Directors of the
Company authorizing and directing the redemption of the Rights pursuant to
subsection (a) of this Section 23, or at such time and date thereafter as it may
specify, and without any further action and without any notice, the right to
exercise Rights shall terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price. Within 10 Business Days after
the date of such action, the Company shall give notice of such redemption to the
holders of Rights by mailing such notice to all holders of Rights at their last
addresses as they appear upon the registry books of the Rights Agent or, if
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Shares. Any notice that is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives such notice, but neither the
failure to give any such notice nor any defect therein shall affect the legality
or validity of such redemption. Each such notice of Redemption shall state the
method by which the payment of the Redemption Price will be made. Neither the
Company nor any of its Affiliates or Associates may, directly or indirectly,
redeem, acquire or purchase for value any Rights in any manner other than that
specifically set forth in Section 24 hereof or in this Section 23, and other
than in connection with the purchase of Common Shares prior to the earlier of
the date of the first Section 11(a)(ii) Event or the date of the first Section
13(a) Event.
(c) The Company may, at its option, pay the Redemption Price in cash,
Common Shares, Preferred Shares, other equity securities of the Company, debt
securities of the Company, other property or any combination of the foregoing,
in each case having an aggregate Current Market Price on the Redemption Date
equal to the Redemption Price.
SECTION 24. EXCHANGE OF RIGHTS.
(a) At any time after the 15% Ownership Date and prior to the first
date thereafter upon which a 15% Stockholder, together with all Affiliates and
Associates of such 15% Stockholder, shall be the Beneficial Owner of 50% or more
of the Voting Shares then outstanding, the Board of
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Directors of the Company may, at its option, except as provided in Section 7(d)
hereof, authorize and direct the exchange of all, but not less than all, of the
then outstanding Rights for Common Shares at an exchange ratio (the "Exchange
Ratio") equal to one Common Share per Right on such date.
(b) Immediately upon the action of the Board of Directors of the
Company authorizing and directing the exchange of the Rights pursuant to
subsection (a) of this Section 24, or at such time and date thereafter as it may
specify, and without any further action and without any notice, the right to
exercise Rights shall terminate and the only right thereafter of the holders of
Rights shall be to receive a number of Common Shares equal to the Exchange
Ratio. Within 10 Business Days after the date of such action, the Company shall
give notice of such exchange to the holders of Rights by mailing such notice to
all holders of Rights at their last addresses as they appear upon the registry
books of the Rights Agent or, if prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares. Any notice that is mailed in
the manner herein provided shall be deemed given, whether or not the holder
receives such notice, but neither the failure to give any such notice nor any
defect therein shall affect the legality or validity of such exchange. Each such
notice of exchange shall state the method by which the Rights will be exchanged
for Common Shares. Neither the Company nor any of its Affiliates or Associates
may, directly or indirectly, redeem, acquire or purchase for value any Rights in
any manner other than (i) as specifically set forth in Section 23 hereof, (ii)
as specifically set forth in this Section 24 or (iii) in connection with the
purchase of Common Shares prior to the earlier of the date of the first Section
11(a)(ii) Event or the date of the first Section 13(a) Event.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute (i) cash, (ii) other equity securities of the Company
(including, but not limited to, Common Share Equivalents), (iii) debt securities
of the Company, (iv) other property or (v) any combination of the foregoing for
the Common Shares exchangeable for Rights, as appropriately adjusted. Subject to
Section 7(d) hereof, in the event that the Company takes any action pursuant to
this Section 24, such action shall apply uniformly to all outstanding Rights.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In the event that the Company shall propose (i) to declare or pay
any dividend payable on or make any distribution with respect to its Common
Shares or Preferred Shares (other than a regular quarterly cash dividend), (ii)
to offer to the holders of its Common Shares or Preferred Shares options, rights
or warrants to subscribe for or to purchase any additional shares thereof or
shares of stock of any class or any other securities, rights or options, (iii)
to effect any reclassification of its Common Shares or Preferred Shares (other
than a reclassification involving only the subdivision of outstanding shares),
(iv) to effect any consolidation or merger with or into, or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one or more transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person or Persons, or (v) to effect the liquidation, dissolution
or winding up of the Company, then and in each such case, the Company shall give
to
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each holder of a Right Certificate and to the Rights Agent, in accordance with
Section 26 hereof, a notice of such proposed action, that shall specify the
record date for the purpose of such dividend or distribution, or the date upon
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 record of the Common Shares or Preferred Shares, if any such
date is to be fixed, and such notice shall be so given in the case of any action
covered by clause (i) or (ii) above at least 20 days prior to the record date
for determining holders of the Common Shares or Preferred Shares for purposes of
such action, and in the case of any such other action, at least 20 days prior to
the date of the taking of such proposed action or the date of participation
therein by the holders of the Common Shares or Preferred Shares, whichever date
shall be the earlier. The failure to give the notice required by this Section 25
or any defect therein shall not affect the legality or validity of the action
taken by the Company or the vote upon any such action.
(b) Upon the occurrence of each Section 11(a)(ii) Event and each
Section 13(a) Event, the Company shall as soon as practicable thereafter give to
each holder of a Right Certificate and to the Rights Agent, in accordance with
Section 26 hereof, a notice of the occurrence of such event, specifying the
event and the consequences of the event to holders of Rights under Sections 11
and 13 hereof.
SECTION 26. NOTICES.
Notices or demands authorized by this Agreement to be given or made by
the Rights Agent or by the holder of any Right Certificate to or on the Company
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing with the Rights
Agent) as follows:
CheckFree Holdings Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President
with a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Secretary of CheckFree Holdings Corporation
Porter, Wright, ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the holder
of any Right Certificate to or on the Rights Agent shall be sufficiently given
or made if sent by first-class mail, postage prepaid,
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addressed (until another address is filed in writing with the Company) to the
principal office of the Rights Agent as follows:
The Fifth Third Bank
Number 1090D2
▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Transfer Agent responsible for CheckFree Holdings
Corporation
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS.
(a) The Board of Directors of the Company may, from time to time,
before and after the Distribution Date, without the approval of any holders of
Rights, supplement or amend any provision of this Agreement in any manner,
whether or not such supplement or amendment is adverse to any holder of Rights,
and direct the Rights Agent so to supplement or amend such provision, and the
Rights Agent shall so supplement or amend such provision; provided, however,
that from and after the earliest of (i) the date of the first Section 11(a)(ii)
Event, (ii) the date of the first Section 13(a) Event, (iii) the Redemption Date
or (iv) the Expiration Date, this Agreement shall not be supplemented or amended
in any manner that would materially and adversely affect any holder of
outstanding Rights other than a 15% Stockholder or a Surviving Person; and
provided further, however, that from and after the first date upon which there
shall exist a 15% Stockholder, this Agreement shall not be supplemented or
amended in any manner without the approval of a majority of those directors of
the Company who were directors prior to such date.
(b) From and after the earlier of the date of the first Section
11(a)(ii) Event or the date of the first Section 13(a) Event and prior to the
earlier of the Redemption Date or the Expiration Date, the Company shall not
effect any amendment to the Certificate of Designations for the Preferred Shares
that would materially and adversely affect the rights, privileges or preferences
of the Preferred Shares without the prior approval of the holders of two-thirds
or more of the then outstanding Rights.
SECTION 28. CERTAIN COVENANTS.
Subject to Section 27 hereof and the other provisions of this
Agreement, from and after the earlier of the date of the first Section 11(a)(ii)
Event or the date of the first Section 13(a) Event and prior to the earlier of
the Redemption Date or the Expiration Date, the Company shall not (a) issue or
sell, or permit any Subsidiary to issue or sell, to a 15% Stockholder or a
Surviving Person, or any Affiliate or Associate of a 15% Stockholder or a
Surviving Person, or any Person holding Voting
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Shares of the Company that are Beneficially Owned by a 15% Stockholder or a
Surviving Person, (i) any rights, options, warrants or convertible securities on
terms similar to, or that materially adversely affect the value of, the Rights
or (ii) Preferred Shares, Common Shares or shares of any other class of capital
stock, if such sale is intended to or would materially adversely affect the
value of the Rights, or (b) take any other action that is intended to or would
materially adversely affect the value of the Rights.
SECTION 29. 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 30. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any Person
other than the Company, the Rights Agent, the registered holders of the Right
Certificates (other than those representing Rights that have become null and
void) and the certificates for Common Shares representing Rights (other than
those Rights that have become null and void) any legal or equitable right,
remedy or claim under this Agreement, and this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent, such registered holders
of Right Certificates and such certificates for Common Shares representing
Rights.
SECTION 31. SEVERABILITY.
If any term, provision, covenant or restriction of this Agreement is
held by a court of competent jurisdiction or other authority to be invalid, void
or unenforceable, the remainder of the terms, provisions, covenants and
restrictions of this Agreement shall remain in full force and effect and shall
in no way be affected, impaired or invalidated.
SECTION 32. GOVERNING LAW.
This Agreement and each Right Certificate issued hereunder shall be
deemed to be a contract made under the 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 performed entirely within such state;
provided, however that with respect solely to matters regarding the rights and
obligations of the Rights Agent hereunder, the laws of the State of Ohio shall
govern.
SECTION 33. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and each
such counterpart shall for all purposes be deemed to be an original and all such
counterparts shall together constitute but one and the same instrument.
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SECTION 34. DESCRIPTIVE HEADINGS.
Descriptive headings of the several sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the day and year first above written.
CHECKFREE HOLDINGS CORPORATION
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇
Chairman of the Board, President and
Chief Executive Officer
THE FIFTH THIRD BANK
as Rights Agent
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Title: Vice President
--------------------------------------
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EXHIBIT A
CERTIFICATE OF INCORPORATION
39
CERTIFICATE OF INCORPORATION
OF
CHECKFREE HOLDINGS CORPORATION
* * * * * * * * * * * * * * * * * *
FIRST: The name of the Corporation is CheckFree Holdings Corporation.
SECOND: The address of its registered office in the State of Delaware is No.
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, in the City of Wilmington, County of New Castle. The name of
its registered agent at such address is The Corporation Trust Company.
THIRD: The nature of the business or purposes to be conducted or promoted is to
engage in any lawful act or activity for which corporations may be organized
under the General Corporation Law of the State of Delaware.
FOURTH: (A) AGGREGATE NUMBER OF SHARES. The aggregate number of shares of stock
which the Corporation shall have authority to issue is 165,000,000 shares,
consisting of 150,000,000 shares of common stock, $.01 par value (the "Common
Stock"), 13,500,000 shares of preferred stock, $.01 par value (the "Preferred
Stock"), and 1,500,000 shares of Series A Junior Participating Cumulative
Preferred Stock, $.01 par value ("Series A Preferred Stock").
(B) COMMON SHARES. Each holder of Common Stock shall be
entitled to one vote for each share of Common Stock held of record on all
matters presented for vote of the stockholders. Subject to the provisions of the
General Corporation Law of the State of Delaware, dividends may be paid on the
Common Stock at such times and in such amounts as the Board of Directors shall
determine. Upon the dissolution, liquidation, or winding up of the Corporation,
the holders of Common Stock shall be entitled to receive all remaining assets of
the Corporation available for distribution to its stockholders ratably and
proportioned to the number of shares held by them.
(C) PREFERRED STOCK. The shares of Preferred Stock may be
issued from time to time in one or more series. The Board of Directors of the
Corporation is hereby authorized to establish from time to time by resolution or
resolutions the number of shares to be included in each such series and to fix
the designation, powers, preferences, and relative participating, optional,
conversion, and other special rights of the shares of each such series and the
qualifications, limitations, or restrictions thereof, including but not limited
to the fixing of dividend rights, rates, preferences, and other terms;
redemption rights, prices, and other terms (including any sinking fund
provisions); conversion rights, prices or rates of exchange, and other terms;
liquidation preferences and other terms; and voting rights in addition to any
voting rights provided by law, and other terms, which may be general or limited;
all to the fullest extent now or hereafter permitted by the General Corporation
Law of the State of Delaware; and to increase or decrease the number of shares
of any
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series subsequent to the issue of shares of that series, but not below the
number of shares of such series then outstanding. In the event the number of
shares of any series shall be so decreased, the shares constituting such
decrease shall resume the status which they had prior to the adoption of the
resolution originally fixing the number of shares of such series.
(D) Series A Junior Participating Cumulative Preferred Stock.
---------------------------------------------------------
Section 1. Designation and Amount. The shares of such series
shall be designated as Series A Junior Participating Cumulative Preferred Stock,
par value $.01 per share (the "Series A Preferred Stock"), and the number of
shares constituting such series shall be 1,500,000 (one million five hundred
thousand).
Section 2. Dividends and Distributions.
(a) The holders of shares of Series A Preferred Stock, in preference to
the holders of shares of Common Stock, par value $.01 per share, of the
Corporation (the "Common Stock") and of any other junior stock of the
Corporation that may be outstanding, 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
tenth day of January, April, July and October in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first
issuance of a share or fraction of a share of Series A Preferred Stock,
in an amount per share (rounded to the nearest cent) equal to the
greater of (i) $.25 per share ($1.00 per annum), or (ii) subject to the
provision for adjustment hereinafter set forth, 100 times the aggregate
per share amount of all cash dividends, and 100 times the aggregate per
share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock,
or a subdivision of the outstanding shares of Common Stock (by
reclassification or otherwise), declared on the Common Stock since the
immediately preceding Quarterly Dividend Payment Date or, with respect
to the first Quarterly Dividend Payment Date, since the first issuance
of any share or fraction of a share of Series A Preferred Stock. In the
event that the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise) into a greater or
lesser number of shares of Common Stock, then and in each such event,
the amount to which the holder of each share of Series A Preferred
Stock was entitled immediately prior to such event under clause (ii) of
the preceding sentence shall be adjusted by multiplying such amount by
a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event, and the denominator of
which is the number of shares of Common Stock that were outstanding
immediately prior to such event.
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(b) The Corporation shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (a) of this Section 2
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock);
provided, however, that in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any
Quarterly Dividend Payment Date and the next subsequent Quarterly
Dividend Payment Date, a dividend of $.25 per share ($1.00 per annum)
on the Series A Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(c) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series A Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of Series A
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 Preferred Stock entitled
to receive a quarterly dividend and before such Quarterly Dividend
Payment Date, in either of which cases such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date.
Accrued but unpaid dividends shall cumulate but shall not bear
interest. Dividends paid on the shares of Series A Preferred Stock in
an amount less than the total amount of such dividends at the time
accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination of
holders of shares of Series A Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which record
date shall be not more than 60 days prior to the date fixed for the
payment thereof.
Section 3. Voting Rights. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(a) Each share of Series A Preferred Stock shall entitle the holder
thereof to 100 votes (and each one one-hundredth of a share of Series A
Preferred Stock shall entitle the holder thereof to one vote) on all
matters submitted to a vote of the stockholders of the Corporation. In
the event that the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock or effect a
subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then and in each such event, the number of
votes per share to which holders of shares of Series A 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
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number of shares of Common Stock outstanding immediately after such
event, and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event.
(b) Except as otherwise provided in the Restated Certificate of
Incorporation of the Corporation or herein or by law, the holders of
shares of Series A 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) In addition, the holders of shares of Series A Preferred Stock
shall have the following special voting rights:
(i) In the event that at any time dividends on Series A
Preferred Stock, whenever accrued and whether or not
consecutive, shall not have been paid or declared and a sum
sufficient for the payment thereof set aside, in an amount
equivalent to six quarterly dividends on all shares of Series
A Preferred Stock at the time outstanding, then and in each
such event, the holders of shares of Series A Preferred Stock
and each other series of preferred stock now or hereafter
issued that shall be accorded such class voting right by the
Board of Directors and that shall have the right to elect one
director (or, in the event any such other series is entitled
to a greater number of directors, such number of directors,
which shall be cumulative with and not in addition to the
director provided for herein, such director or directors being
hereinafter referred to as "Special Directors") as the result
of a prior or subsequent default in payment of dividends on
such series (each such other series being hereinafter called
"Other Series of Preferred Stock"), voting separately as a
class without regard to series, shall be entitled to elect the
Special Director at the next annual meeting of stockholders of
the Corporation, in addition to the directors to be elected by
the holders of all shares of the Corporation entitled to vote
for the election of directors, and the holders of all shares
(including the Series A Preferred Stock) otherwise entitled to
vote for directors, voting separately as a class, shall be
entitled to elect the remaining members of the Board of
Directors, provided that the Series A Preferred Stock and each
Other Series of Preferred Stock, voting as a class, shall not
have the right to elect more than one Special Director (in
addition to any Special Director to which the holders of any
Other Series of Preferred Stock are then entitled). Such
special voting right of the holders of shares of Series A
Preferred Stock may be exercised until all dividends in
default on the Series A Preferred Stock shall have been paid
in full or declared and funds sufficient therefor set aside,
and when so paid or provided for,
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such special voting right of the holders of shares of Series A
Preferred Stock shall cease, but subject always to the same
provisions for the vesting of such special voting rights in
the event of any such future dividend default or defaults.
(ii) At any time after such special voting rights shall have
so vested in the holders of shares of Series A Preferred
Stock, the President or the Secretary of the Corporation may,
and upon the written request of the holders of record of 10%
or more in number of the shares of Series A Preferred Stock
and each Other Series of Preferred Stock then outstanding
addressed to the Secretary at the principal executive office
of the Corporation shall, call a special meeting of the
holders of shares of Preferred Stock so entitled to vote, for
the election of the Special Directors to be elected by them as
herein provided, to be held within 60 days after such call and
at the place and upon the notice provided by law and in the
By-laws for the holding of meetings of stockholders; provided,
however, that the President or the Secretary shall not be
required to call such special meeting in the case of any such
request received less than 90 days before the date fixed for
any annual meeting of stockholders, and if in such case such
special meeting is not called or held, the holders of shares
of Preferred Stock so entitled to vote shall be entitled to
exercise the special voting rights provided in this paragraph
at such annual meeting. If any such special meeting required
to be called as above provided shall not be called by the
President or the Secretary within 30 days after receipt of any
such request, then the holders of record of 10% or more in
number of the shares of Series A Preferred Stock and each
Other Series of Preferred Stock then outstanding may designate
in writing one of their number to call such meeting, and the
person so designated may, at the expense of the Corporation,
call such meeting to be held at the place and upon the notice
given by such person, and for that sole purpose shall have
access to the stock books of the Corporation. No such special
meeting and no adjournment thereof shall be held on a date
later than 60 days before the annual meeting of stockholders.
If, at any meeting so called or at any annual meeting held
while the holders of shares of Series A Preferred Stock have
the special voting rights provided for in this paragraph, the
holders of not less than 40% of the aggregate voting power of
Series A Preferred Stock and each Other Series of Preferred
Stock then outstanding are present in person or by proxy,
which percentage shall be sufficient to constitute a quorum
for the election of additional directors as herein provided,
the then authorized number of directors of the Corporation
shall be increased by the number of Special
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Directors to be elected, as of the time of such special
meeting or the time of the first such annual meeting held
while such holders have special voting rights and such quorum
is present, and the holders of shares of Series A Preferred
Stock and each Other Series of Preferred Stock, voting as a
class, shall be entitled to elect the Special Director or
Directors so provided for. If the directors of the Corporation
are then divided into classes under provisions of the Restated
Certificate of Incorporation of the Corporation or the
By-laws, the Special Director or Directors shall belong to
each class of directors in which a vacancy is created as a
result of such increase in the authorized number of directors.
If the foregoing expansion of the size of the Board of
Directors shall not be valid under applicable law, then the
holders of shares of Series A Preferred Stock and of each
Other Series of Preferred Stock, voting as a class, shall be
entitled, at the meeting of stockholders at which they would
otherwise have voted, to elect a Special Director or Directors
to fill any then existing vacancies on the Board of Directors,
and shall additionally be entitled, at such meeting and each
subsequent meeting of stockholders at which directors are
elected, to elect all of the directors then being elected
until by such class vote the appropriate number of Special
Directors has been so elected.
(iii) Upon the election at such meeting by the holders of
shares of Series A Preferred Stock and each Other Series of
Preferred Stock, voting as a class, of the Special Director or
Directors they are entitled so to elect, the persons so
elected, together with such persons as may be directors or as
may have been elected as directors by the holders of all
shares (including Series A Preferred Stock) otherwise entitled
to vote for directors, shall constitute the duly elected
directors of the Corporation. Each Special Director so elected
by holders of shares of Series A Preferred Stock and each
Other Series of Preferred Stock, voting as a class, shall
serve until the next annual meeting or until their respective
successors shall be elected and qualified, or if any such
Special Director is a member of a class of directors under
provisions dividing the directors into classes, each such
Special Director shall serve until the annual meeting at which
the term of office of such Special Director's class shall
expire or until such Special Director's successor shall be
elected and shall qualify, and at each subsequent meeting of
stockholders at which the directorship of any Special Director
is up for election, said special class voting rights shall
apply in the reelection of such Special Director or in the
election of such Special Director's successor; provided,
however, that whenever the holders of shares of Series A
Preferred Stock and each
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Other Series of Preferred Stock shall be divested of the
special rights to elect one or more Special Directors as above
provided, the terms of office of all persons elected as
Special Directors, or elected to fill any vacancies resulting
from the death, resignation, or removal of Special Directors
shall forthwith terminate (and the number of directors shall
be reduced accordingly).
(iv) If, at any time after a special meeting of stockholders
or an annual meeting of stockholders at which the holders of
shares of Series A Preferred Stock and each Other Series of
Preferred Stock, voting as a class, have elected one or more
Special Directors as provided above, and while the holders of
shares of Series A Preferred Stock and each Other Series of
Preferred Stock shall be entitled so to elect one or more
Special Directors, the number of Special Directors who have
been so elected (or who by reason of one or more resignations,
deaths or removals have succeeded any Special Directors so
elected) shall by reason of resignation, death or removal be
reduced the vacancy in the Special Directors may be filled by
any one or more remaining Special Director or Special
Directors. In the event that such election shall not occur
within 30 days after such vacancy arises, or in the event that
there shall not be incumbent at least one Special Director,
the President or the Secretary of the Corporation may, and
upon the written request of the holders of record of 10% or
more in number of the shares of Series A Preferred Stock and
each Other Series of Preferred Stock then outstanding
addressed to the Secretary at the principal office of the
Corporation shall, call a special meeting of the holders of
shares of Series A Preferred Stock and each Other Series of
Preferred Stock so entitled to vote, for an election to fill
such vacancy or vacancies, to be held within 60 days after
such call and at the place and upon the notice provided by law
and in the By-laws for the holding of meetings of
stockholders; provided, however, that the President or the
Secretary shall not be required to call such special meeting
in the case of any such request received less than 90 days
before the date fixed for any annual meeting of stockholders,
and if in such case such special meeting is not called, the
holders of shares of Preferred Stock so entitled to vote shall
be entitled to fill such vacancy or vacancies at such annual
meeting. If any such special meeting required to be called as
above provided shall not be called by the President or the
Secretary within 30 days after receipt of any such request,
then the holders of record of 10% or more in number of the
shares of Series A Preferred Stock and each Other Series of
Preferred Stock then outstanding may designate in writing one
of their number to call such
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meeting, and the person so designated may, at the expense of
the Corporation, call such meeting to be held at the place and
upon the notice above provided, and for that purpose shall
have access to the stock books of the Corporation; no such
special meeting and no adjournment thereof shall be held on a
date later than 60 days before the annual meeting of
stockholders.
(d) Nothing herein shall prevent the directors or stockholders from
taking any action to increase the number of authorized shares of Series
A Preferred Stock, or increasing the number of authorized shares of
Preferred Stock of the same class as the Series A Preferred Stock or
the number of authorized shares of Common Stock, or changing the par
value of the Common Stock or Preferred Stock, or issuing options,
warrants or rights to any class of stock of the Corporation as
authorized by the Restated Certificate of Incorporation of the
Corporation, as it may hereafter be amended.
(e) Except as set forth herein, holders of shares of Series A Preferred
Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote as set
forth in the Restated Certificate of Incorporation of the Corporation
or herein or by law) for taking any corporate action.
Section 4. Certain Restrictions.
(a) Whenever any dividends or other distributions payable on the Series
A Preferred Stock as provided in Section 2 hereof are in arrears,
thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred
Stock outstanding shall have been paid in full, the Corporation shall
not, directly or indirectly:
(i) declare or pay dividends on, or make any other
distributions with respect to, any shares of stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends on, or make any other
distributions with respect to, any shares of stock ranking on
a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock,
except dividends paid ratably on shares of the Series A
Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, provided that the
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Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior 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 Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any
shares of Series A Preferred Stock, or any shares of stock
ranking on a parity with the Series A Preferred Stock, except
in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of
the respective series and classes, shall determine in good
faith will result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration,
directly or indirectly, 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 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, without designation as to series, and may be
reissued as part of any series of preferred stock created by resolution or
resolutions of the Board of Directors (including Series A Preferred Stock),
subject to the conditions and restrictions on issuance set forth herein.
Section 6. Liquidation, Dissolution or Winding Up. Upon any
liquidation, dissolution or winding up of the Corporation, no distribution shall
be made to:
(a) the holders of shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock unless, prior thereto, the holders of shares
of Series A Preferred Stock shall have received the greater of (i)
$1.00 per share ($.001 per one one-hundredth of a share), plus an
amount equal to accrued and unpaid dividends and distributions thereon,
whether or not declared, to the date of such payment, or (ii) an
aggregate amount per share, subject to the provision for adjustment
hereinafter set forth, equal to 100 times the aggregate amount to be
distributed per share to holders of shares of Common Stock; or
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48
(b) the holders of shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up) with
the Series A Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all other such parity stock in proportion
to the total amounts to which the holders of all such shares are
entitled upon such liquidation, dissolution or winding up.
In the event that the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise) into a greater or lesser number of
shares of Common Stock, then and in each such event, the aggregate amount to
which the holder of each share of Series A Preferred Stock was entitled
immediately prior to such event under the proviso in clause (a) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event, and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc. In the event that 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, or otherwise
changed, then and in each such event, the shares of Series A 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 100
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 that the Corporation shall at
any time declare or pay any dividend on Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation of the
outstanding shares of Common Stock (by reclassification or otherwise) into a
greater or lesser number of shares of Common Stock, then and in each such event,
the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event, and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 8. No Redemption. The shares of Series A Preferred
Stock shall not be redeemable. Notwithstanding the foregoing, the Corporation
may acquire shares of Series A Preferred Stock in any other manner permitted by
law, the Restated Certificate of Incorporation of the Corporation or herein.
Section 9. Rank. Unless otherwise provided in the Restated
Certificate of Incorporation of the Corporation or a Certificate of Designations
relating to a subsequent series of preferred stock of the Corporation, the
Series A 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 on liquidation, dissolution or winding up, and senior to
the Common Stock of the Corporation.
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Section 10. Amendment. The Restated Certificate of
Incorporation of the Corporation shall not be amended in any manner that would
materially and adversely alter or change the powers, preferences or special
rights of the Series A Preferred Stock without the affirmative vote of the
holders of at least two-thirds of the outstanding shares of Series A Preferred
Stock, voting together as a single series.
Section 11. Fractional Shares. Series A Preferred Stock may be
issued in fractions of a share (in one one-hundredths (1/100) of a share and
integral multiples thereof) that shall entitle the holder thereof, in proportion
to such holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and have the benefit of all other rights
of holders of shares of Series A Preferred Stock.
FIFTH: (A) Nominations for election of directors shall be made in the
manner provided by the By-Laws of the Corporation. The number of directors of
the Corporation shall be fixed by or pursuant to the By-Laws of the Corporation.
(B) The directors shall be divided into three classes, Class
I, Class II, and Class III. Each such class shall consist, as nearly as
possible, of one-third of the total number of directors and any remaining
directors shall be included within each such class or classes as the Board of
Directors shall designate. Class I directors shall hold office initially for a
term expiring at the 1999 annual meeting of stockholders, Class II directors
shall hold office initially for a term expiring at the 2000 annual meeting of
stockholders; and Class III directors shall hold office initially for a term
expiring at the 1998 annual meeting of stockholders. At each annual meeting of
stockholders, successors to the class of directors whose term expires at that
annual meeting shall be elected to hold office for a three-year term. If the
number of directors is changed, any increase or decrease shall be apportioned
among the classes so as to maintain the number of directors in each class as
nearly equal as possible. A director shall hold office, subject to any removal,
death, resignation, or retirement until the annual meeting for the year in which
his term expires and until his successor shall be elected and qualify.
(C) Notwithstanding any other provision of this Certificate of
Incorporation or the By-Laws of the Corporation (and notwithstanding the fact
that some lesser percentage may be specified by the General Corporation Law of
the State of Delaware, this Certificate of Incorporation or the By-Laws of the
Corporation), any director or the entire board of directors of the Corporation
may be removed from office at any time, but only for cause and only by the
affirmative vote of the holders of at least eighty (80%) of all of the
outstanding shares of capital stock of the Corporation entitled to vote on the
election of directors at a meeting of stockholders called for that purpose,
except that if the Board of Directors, by an affirmative vote of at least
sixty-six and two-thirds (66-2/3%) of the entire Board of Directors, recommends
removal of a director to the stockholders, such removal may be effected by the
affirmative vote of the holders of at least a majority of the outstanding shares
of capital stock of the Corporation present in person or represented by proxy
and entitled to vote on the election of directors at a meeting of stockholders
called for that purpose.
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(D) Vacancies and newly-created directorships resulting from
any increase in the authorized number of directors may be filled by a majority
of the directors then in office, although less than a quorum, or by a sole
remaining director, and the directors so chosen shall hold office for a term
expiring at the annual meeting of stockholders at which the term of the class to
which they have been elected expires and until their successors are duly elected
and qualified. If there are no directors in office, then an election of
directors may be held in the manner provided by the General Corporation Law of
the State of Delaware.
(E) Notwithstanding the foregoing, whenever the holders of any
one or more classes or series of Preferred Stock issued by this Corporation
shall have the right, voting separately by class or series, to elect directors
at an annual or special meeting of stockholders, the election, term of office,
filling of vacancies, terms of removal, and other features of such directorships
shall be governed by the terms of Article FOURTH and the resolution or
resolutions establishing such class or series adopted pursuant thereto and such
directors so elected shall not be divided into classes pursuant to this Article
FIFTH unless expressly provided by such terms.
(F) Elections of directors need not be by written ballot
unless the By-Laws of the Corporation shall so provide.
SIXTH: In furtherance and not in limitation of the powers conferred
by statute, the Board of Directors is expressly authorized to make, alter, or
repeal the By-Laws of the Corporation.
SEVENTH: The Board of Directors shall base the response of the
Corporation to any "Acquisition Proposal" on the Board of Directors' evaluation
of what is in the best interest of the Corporation. In evaluating what is in the
best interest of the Corporation, the Board of Directors shall consider all
relevant factors including, without limitation:
(1) The best interest of the stockholders which, for this
purpose, requires the Board of Directors to consider, among other
factors, not only the consideration offered in the Acquisition Proposal
in relation to the then current market price of the Corporation's
stock, but also in relation to the current value of the Corporation in
a freely negotiated transaction and in relation to the Board of
Directors' then estimate of the future value of the Corporation as an
independent entity or as the subject of a future Acquisition Proposal;
(2) Such other factors as the Board of Directors determines to
be relevant, including, among other factors, the long-term and
short-term interests of the Corporation and its subsidiaries and their
businesses and properties and the social, legal, and economic effects
upon the employees, suppliers, customers, creditors, and other affected
persons, firms, and corporations and on the communities and
geographical areas in which the Corporation and its subsidiaries
operate or are located.
"Acquisition Proposal" means any proposal for the consolidation or
merger of the Corporation with another corporation, any share exchange involving
the Corporation's outstanding
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capital stock, any liquidation or dissolution of the Corporation, any transfer
of all or a material portion of the assets of the Corporation, and any tender
offer or exchange offer for any of the Corporation's outstanding stock.
EIGHTH: No director of the Corporation shall be personally liable to the
Corporation or to its stockholders for monetary damages for breach of fiduciary
duty as a director; provided, however, that such provision shall not eliminate
or limit the liability of a director (i) for any breach of the director's duty
of loyalty to the Corporation or to its stockholders, (ii) for acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law; (iii) for the payment of a dividend or the payment for the purchase or
redemption of the Corporation's stock in violation of Section 174 of the General
Corporation Law of the State of Delaware; or (iv) for any transaction from which
the director derived an improper personal benefit.
NINTH: The Corporation is to have perpetual existence.
TENTH: (A) Any action required to be taken at any annual or special meeting of
stockholders of the Corporation, or any action which may be taken at any annual
or special meeting of such stockholders, may be taken without a meeting, without
prior notice and without a vote, if a consent in writing, setting forth the
action so taken, shall be signed by all of the holders of outstanding stock who
would be entitled to notice of such meeting.
(B) Meetings of stockholders may be held within or without the
State of Delaware, as the By-Laws may provide. The books of the Corporation may
be kept (subject to any provision contained in the General Corporation Law of
the State of Delaware) outside the State of Delaware at such place or places as
may be designated from time to time by the Board of Directors or in the By-Laws
of the Corporation.
ELEVENTH: The name and the mailing address of the sole incorporator is as
follows:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
CheckFree Corporation
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
The powers of the incorporator shall terminate upon the election of the initial
directors and the adoption of the By-laws.
TWELFTH: (A) The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Certificate of Incorporation, in the
manner now or hereafter prescribed by the General Corporation Law of the State
of Delaware, and all rights conferred upon stockholders herein are granted
subject to this reservation and subject to paragraph (B) below.
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(B) The provisions set forth in this Article TWELFTH and in
Article FIFTH, SIXTH, SEVENTH, EIGHTH, and TENTH (A) of this Certificate of
Incorporation may not be altered, amended or repealed in any respect, and new
provisions inconsistent therewith may not be adopted unless such action is
approved by the affirmative vote of the holders of at least eighty (80%) of all
of the outstanding shares of capital stock of the Corporation entitled to vote
on such matter at a meeting of stockholders called for that purpose, except that
if the Board of Directors, by an affirmative vote of at least sixty-six and
two-thirds (66-2/3%) of the entire Board of Directors, recommends approval of
such amendment to this Certificate of Incorporation to the stockholders, such
approval may be effected by the affirmative vote of the holders of at least a
majority of the outstanding shares of capital stock of the Corporation present
in person or represented by proxy and entitled to vote on such matter at a
meeting of stockholders called for that purpose.
I, THE UNDERSIGNED, being the sole incorporator hereinbefore named, for
the purpose of forming a corporation pursuant to the General Corporation Law of
the State of Delaware, do make this certificate, hereby declaring that this is
my act and deed and the facts herein stated are true, and accordingly have
hereunto set my hand this 15th day of December, 1997.
-----------------------------------
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Incorporator
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EXHIBIT B
FORM OF
RIGHT CERTIFICATE
Certificate No. R-___________ Rights
NOT EXERCISABLE AFTER DECEMBER 16, 2007, OR EARLIER IF REDEEMED OR EXCHANGED.
THE RIGHTS ARE SUBJECT TO EXPIRATION, REDEMPTION AND EXCHANGE ON THE TERMS SET
FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES SPECIFIED IN THE
RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY CERTAIN PERSONS OR ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
RIGHT CERTIFICATE
CHECKFREE HOLDINGS CORPORATION
This certifies that ______________________, or registered assigns, is
the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms and conditions of a Rights
Agreement (the "Rights Agreement") dated as of December 16, 1997, by and between
CheckFree Holdings Corporation, a Delaware corporation (the "Company"), and The
Fifth Third Bank (the "Rights Agent"), to purchase from the Company at any time
prior to the earlier of the Redemption Date (as such term is defined in the
Rights Agreement) or 5:00 o'clock p.m., Cincinnati, Ohio time, on the Expiration
Date (December 16, 2007), unless the Distribution Date (as defined in the Rights
Agreement) shall have occurred on or prior to such date and the Rights shall
have separated from the Common Shares, in which case the Expiration Date is the
date that is the tenth anniversary of the Distribution Date), at the office or
agency of the Rights Agent at ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇,
or at the office of its successor as Rights Agent, one one-hundredth of a fully
paid and nonassessable share of Series A Junior Participating Cumulative
Preferred Stock, par value $.01 per share, of the Company (a "Preferred Share")
or, in certain circumstances, other securities or other property, at a purchase
price of $95.00 (ninety-five dollars) per one one-hundredth of a Preferred Share
(the "Exercise Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase, including Certificate, on the
reverse side hereof completed and duly executed, with signature guaranteed.
The number of Rights represented by this Right Certificate and the
Exercise Price set forth above are the number of Rights and the Exercise Price
as of December 16, 1997, based upon the
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Preferred Shares as constituted on such date. As provided in the Rights
Agreement, the Exercise Price and the number of Preferred Shares or other
securities or other property that may be purchased upon the exercise of the
Rights represented by this Right Certificate are subject to modification and
adjustment upon the occurrence of certain events.
The Rights Agreement contains a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of Right Certificates. This Right Certificate is
subject to all the terms and conditions of the Rights Agreement, which terms and
conditions are hereby incorporated herein by reference and made a part hereof.
Copies of the Rights Agreement are on file at the principal executive offices of
the Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
presentation and surrender at the above-mentioned offices of the Rights Agent,
with the Form of Assignment, including Certificate, on the reverse side hereof
completed and duly executed, with signature guaranteed, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
representing Rights entitling the holder thereof to purchase a like aggregate
number of Preferred Shares or, in certain circumstances, other securities or
other property, as the Rights represented by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall be exercised in part, the holder shall be entitled to
receive, upon the surrender hereof with the Form of Election to Purchase,
including Certificate, on the reverse side hereof completed and duly executed,
with signature guaranteed, another Right Certificate or Right Certificates for
the number of whole Rights not exercised. Subject to the provisions of the
Rights Agreement, the Rights represented by this Right Certificate may be
redeemed by the Company, at its option, at a redemption price of $0.001 per
Right or, upon the occurrence of certain events, the Company, at its option, may
exchange such Rights for fully paid and nonassessable shares of Common Stock,
par value $.01 per share, of the Company at an exchange ratio, per Right, of
that number of Common Shares (as defined in the Rights Agreement) which, as of
the date of the Board of Directors' action, has a Current Market Price (as
defined in the Rights Agreement) equal to the difference between the Exercise
Price and the Current Market Price of the Common Shares which each holder of a
Right would have a right to receive upon the exercise of a Right on such date.
No fractional securities shall be issued upon the exercise of any Right
or Rights represented hereby (other than fractions of Preferred Shares that are
integral multiples of one one-hundredth of a Preferred Share, that may, at the
option of the Company, be represented by depository receipts), but in lieu
thereof, a cash payment shall be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of the Preferred
Shares or other securities of the Company that may at any time be issuable on
the exercise hereof, nor shall anything contained herein be construed to confer
upon the holder hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or upon any matter
submitted to stockholders at any meeting thereof, or to give or withhold consent
to any corporate action, or to receive notice of meetings or
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other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, until the Right or
Rights represented by this Right Certificate shall have been exercised as
provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal. Dated as of _______________________, ____.
Attest: CHECKFREE HOLDINGS CORPORATION
By: By:
----------------------------- -------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary Title: Chairman of the Board, President
and Chief Executive Officer
Countersigned:
THE FIFTH THIRD BANK
By:
-----------------------
Name:
-----------------------
Title:
----------------------
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FORM OF REVERSE SIDE OF RIGHT CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires to transfer
any or all of the Rights represented by this Right Certificate)
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
_____________________ (Name, address and social security or other identifying
number of transferee) ________________ (__________) of the Rights represented by
this Right Certificate, together with all right, title and interest in and to
said Rights, and hereby irrevocably constitutes and appoints __________ attorney
to transfer said Rights on the books of CheckFree Holdings Corporation with full
power of substitution.
Dated:
----------------------- ------------------------------
(Signature)
Signature Guaranteed:
FORM OF ELECTION TO PURCHASE
(To be executed by the registered holder if such holder desires to
exercise any or all of the Rights represented by this Right Certificate)
To CHECKFREE HOLDINGS CORPORATION:
The undersigned hereby irrevocably elects to exercise
___________________________ (_____________) of the Rights represented by this
Right Certificate to purchase the following:
(Check one of the following boxes)
[ ] The Preferred Shares or other securities or property issuable
upon the exercise of said number of Rights pursuant to Section
7(c) of the Rights Agreement.
[ ] The shares of the Common Stock, par value $.01 per share, of
the Company, or other securities or property issuable upon the
exercise of said number of Rights pursuant to Section
11(a)(ii) of the Rights Agreement.
[ ] The securities issuable upon the exercise of said number of
Rights pursuant to Section 13(a) of the Rights Agreement.
The undersigned hereby requests that any such property and a certificate for any
such securities be issued in the name of and delivered to:
_____________________________
(Name, address and social security or other identifying number of issuee)
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The undersigned hereby further requests that if said number of Rights shall not
be all the Rights represented by this Right Certificate, a new Right Certificate
for the remaining balance of such Rights be issued in the name of and delivered
to: ____________________________
(Name, address and social security or other identifying number of issuee)
Dated:
------------------------ ------------------------------
(Signature)
Signature Guaranteed:
CERTIFICATE
(to be completed, if true)
The undersigned hereby certifies that the Rights represented by this Right
Certificate are not Beneficially Owned by a 15% Stockholder or an Affiliate or
Associate of a 15% Stockholder (as such capitalized terms are defined in the
Rights Agreement).
Dated:
------------------------- -----------------------------
(Signature)
Signature Guaranteed:
NOTICE
The signatures to the foregoing Assignment and the foregoing Certificate, if
applicable, must correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or enlargement or any change
whatsoever, and must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
In the event that the foregoing Certificate is not duly executed, with signature
guaranteed, the Company may deem the Rights represented by this Right
Certificate to be Beneficially Owned by a 15% Stockholder or an Affiliate or
Associate of a 15% Stockholder (as such capitalized terms are defined in the
Rights Agreement), and not issue any property or certificate for securities upon
the exercise of this Right Certificate or issue any new Right Certificate for
any remaining balance of unexercised Rights represented by this Right
Certificate.
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EXHIBIT C
CHECKFREE HOLDINGS CORPORATION
FORM OF
SUMMARY OF THE RIGHTS
On December 16, 1997, the Board of Directors of CheckFree Holdings Corporation
(the "Company") authorized and declared a dividend of one preferred stock
purchase right (a "Right") for each share of common stock, par value $.01 per
share, of the Company (the "Common Shares"). The dividend is payable on December
19, 1997 (the "Record Date") to the holders of record of Common Shares as of the
close of business on such date.
The following is a brief description of the Rights. It is intended to provide a
general description only and is subject to the detailed terms and conditions of
a Rights Agreement (the "Rights Agreement") dated as of December 16, 1997 by and
between the Company and The Fifth Third Bank, as Rights Agent (the "Rights
Agent).
1. COMMON SHARE CERTIFICATES REPRESENTING RIGHTS
Until the Distribution Date (as defined in Section 2 below), (a) the
Rights shall not be exercisable, (b) the Rights shall be attached to and trade
only together with the Common Shares and (c) the stock certificates representing
Common Shares shall also represent the Rights attached to such Common Shares.
Common Share certificates issued after the Record Date and prior to the
Distribution Date shall contain a notation incorporating the Rights Agreement by
reference.
2. DISTRIBUTION DATE
The "Distribution Date" is the earliest of:
(a) the tenth business day following the date of the first
public announcement that any person (other than the Company or certain
related entities, and with certain additional exceptions) has become
the beneficial owner of 15% or more of the then outstanding Common
Shares (such person is a "15% Stockholder" and the date of such public
announcement is the "15% Ownership Date");
(b) the tenth business day (or such later day as shall be
designated by the Board of Directors) following the date of the
commencement of, or the announcement of an intention to make, a tender
offer or exchange offer, the consummation of which would cause any
person to become a 15% Stockholder; or
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(c) the first date, on or after the 15% Ownership Date, upon
which the Company is acquired in a merger or other business combination
in which the Company is not the surviving corporation or in which the
outstanding Common Shares are changed into or exchanged for stock or
assets of another person, or upon which 50% or more of the Company's
consolidated assets or earning power are sold (other than in
transactions in the ordinary course of business).
In calculating the percentage of outstanding Common Shares that are
beneficially owned by any person, such person shall be deemed to beneficially
own any Common Shares issuable upon the exercise, exchange or conversion of any
options, warrants or other securities beneficially owned by such person;
provided, however, that such Common Shares issuable upon such exercise shall not
be deemed outstanding for the purpose of calculating the percentage of Common
Shares that are beneficially owned by any other person. Notwithstanding the
foregoing, if any person is the beneficial owner of at least 15% of the
outstanding Common Shares as a result of any increase in the number of Common
Shares issuable upon the exercise, exchange or conversion of outstanding
securities, or any decrease in the number of outstanding Common Shares resulting
from any stock repurchase plan or self tender offer of the Company, then such
person shall not be deemed a "15% Stockholder" until such person thereafter
acquires beneficial ownership of, in the aggregate, a number of additional
Common Shares equal to 1% or more of the then outstanding Common Shares.
No person who was the beneficial owner of 15% or more of the
outstanding Common Shares on December 24, 1997, shall be deemed a 15%
Stockholder for purposes of the Rights unless and until such person shall have
acquired beneficial ownership of additional Common Shares amounting to 1% or
more of the total Common Shares outstanding, or such person, after having
reduced its beneficial ownership to less than 15% after December 24, 1997, shall
thereafter increase its beneficial ownership to 15% or more of the outstanding
Common Shares.
Upon the close of business of the Distribution Date, the Rights shall
separate from the Common Shares, Right certificates shall be issued, and the
Rights shall become exercisable to purchase Preferred Shares as described in
Section 5 below.
3. ISSUANCE OF RIGHT CERTIFICATES
As soon as practicable following the Distribution Date, separate
certificates representing only Rights shall be mailed to the holders of record
of Common Shares as of the close of business on the Distribution Date, and such
separate Right certificates alone shall represent such Rights from and after the
Distribution Date.
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4. EXPIRATION OF RIGHTS
The Rights shall expire on December 16, 2007, unless earlier redeemed
or exchanged, unless the Distribution Date has previously occurred and the
Rights have separated from the Common Shares, in which case the Rights will
remain outstanding for ten years.
5. EXERCISE OF RIGHTS
Unless the Rights have expired or been redeemed or exchanged, they may
be exercised, at the option of the holders, pursuant to paragraphs (a), (b) or
(c) below. No Right may be exercised more than once or pursuant to more than one
of such paragraphs. From and after the first event of the type described in
paragraphs (b) or (c) below, each Right that is beneficially owned by a 15%
Stockholder or that was attached to a Common Share that is subject to an option
beneficially owned by a 15% Stockholder shall be void.
(a) RIGHT TO PURCHASE PREFERRED SHARES.
From and after the close of business on the Distribution Date,
each Right (other than a Right that has become void) shall be
exercisable to purchase one one-hundredth of a share of Series A Junior
Participating Cumulative Preferred Stock, par value $.01 per share, of
the Company (the "Preferred Shares"), at an exercise price of $95.00
(Ninety-five dollars) (the "Exercise Price"). Prior to the Distribution
Date, the Company may substitute for all or any portion of the
Preferred Shares that would otherwise be issuable upon exercise of the
Rights, cash, assets or other securities having the same aggregate
value as such Preferred Shares. The Preferred Shares are nonredeemable
and, unless otherwise provided in connection with the creation of a
subsequent series of preferred stock, are subordinate to any other
series of the Company's preferred stock whether issue before or after
the issuance of the Preferred Shares. The Preferred Shares may not be
issued except upon exercise of Rights. The holder of a Preferred Share
is entitled to receive when, as and if declared, the greater of (i) a
preferential annual dividend of $1.00 per Preferred Share ($.01 per one
one-hundredth of a Preferred Share); or (ii) cash and non-cash
dividends in an amount equal to 100 times the dividends declared on
each Common Share. In the event of liquidation, the holders of
Preferred Shares shall be entitled to receive a liquidation payment in
an amount equal to the greater of (1) $1.00 per Preferred Share ($.01
per one one-hundredth of a Preferred Share), plus all accrued and
unpaid dividends and distributions on the Preferred Shares, or (2) an
amount equal to 100 times the aggregate amount to be distributed per
Common Share. Each Preferred Share has 100 votes, voting together with
the Common Shares. In the event of any merger, consolidation or other
transaction in which Common Shares are exchanged, the holder of a
Preferred Share shall be entitled to receive 100 times the amount
received per Common Share. The rights of the Preferred Shares as to
dividends, voting and liquidation preferences are protected by
antidilution provisions. It is anticipated that the value of one
one-hundredth of a Preferred Share should approximate the value of one
Common Share.
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(b) RIGHT TO PURCHASE COMMON SHARES OF THE COMPANY
(FLIP-IN-RIGHT).
From and after the close of business on the tenth business day
following the 15% Ownership Date, each Right (other than a Right that
has become void) shall be exercisable to purchase, at the Exercise
Price (initially $95), Common Shares with a market value equal to two
times the Exercise Price. If the Company does not have sufficient
Common Shares available for all Rights to be exercised, the Company
shall substitute for all or any portion of the Common Shares that would
otherwise be issuable upon the exercise of the Rights, cash, assets or
other securities having the same aggregate value as such Common Shares.
(c) RIGHT TO PURCHASE COMMON STOCK OF A SUCCESSOR
CORPORATION (FLIP-OVER-RIGHT).
If, on or after the 15% Ownership Date, (i) the Company is
acquired in a merger or other business combination in which the Company
is not the surviving corporation, (ii) the Company is the surviving
corporation in a merger or other business combination in which all or
part of the outstanding Common Shares are changed into or exchanged for
stock or assets of another person or (iii) 50% or more of the Company's
consolidated assets or earning power are sold (other than in
transactions in the ordinary course of business), then each Right
(other than a Right that has become void) shall thereafter be
exercisable to purchase, at the Exercise Price (initially $95), shares
of common stock of the surviving corporation or purchaser,
respectively, with an aggregate market value equal to two times the
Exercise Price.
6. ADJUSTMENTS TO PREVENT DILUTION
The Exercise Price, the number of outstanding Rights and the number of
Preferred Shares or Common Shares issuable upon exercise of the Rights are
subject to adjustment from time to time as set forth in the Rights Agreement in
order to prevent dilution. With certain exceptions, no adjustment in the
Exercise Price shall be required until cumulative adjustments require an
adjustment of at least 1%.
7. CASH PAID INSTEAD OF ISSUING FRACTIONAL SECURITIES
No fractional securities shall be issued upon exercise of a Right
(other than fractions of Preferred Shares that are integral multiples of one
one-hundredth of a Preferred Share and that may, at the election of the Company,
be evidenced by depositary receipts) and in lieu thereof, an adjustment in cash
shall be made based on the market price of such securities on the last trading
date prior to the date of exercise.
8. REDEMPTION
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At any time prior to the earlier of (a) the tenth business day (or such
later day as shall be designated by the Board of Directors) following the date
of the commencement of, or the announcement of an intention to make, a tender
offer or exchange offer, the consummation of which would cause any person to
become a 15% Stockholder, (b) the tenth business day after the 15% Ownership
Date or (c) the first event of the type giving rise to exercise rights under
Section 5(c) above, the Board of Directors may, at its option, direct the
Company to redeem the Rights in whole, but not in part, at a price of $.001 per
Right (the "Redemption Price"), and the Company shall so redeem the Rights;
provided, however, that any redemption after there is a 15% Stockholder shall
also require the approval of a majority of those directors of the Company who
were directors prior to such date. Immediately upon such action by the Board of
Directors (the date of such action is the "Redemption Date"), the right of the
holders of Rights thereafter shall be to receive the Redemption Price.
9. EXCHANGE
At any time after the 15% Ownership Date and prior to the first date
thereafter upon which a 15% Stockholder shall be the beneficial owner of 50% or
more of the outstanding Common Shares, the Board of Directors may, at its
option, direct the Company to exchange all, but not less than all, of the then
outstanding Rights (other than a Right that has become void) for Common Shares
at an exchange ratio equal to one Common Share per Right on such date (the
"Exchange Ratio"), and the Company shall so exchange the Rights. Immediately
upon such action by the Board of Directors, the right to exercise Rights shall
terminate and the only right of the holders of Rights thereafter shall be to
receive a number of Common Shares equal to the Exchange Ratio.
10. NO STOCKHOLDER RIGHTS PRIOR TO EXERCISE
Until a Right is exercised, the holder thereof, as such, shall have no
rights as a stockholder of the Company (other than rights resulting from such
holder's ownership of Common Shares), including, without limitation, the right
to vote or to receive dividends.
11. AMENDMENT OF RIGHTS AGREEMENT
The Board of Directors may, from time to time, without the approval of
any holder of Rights, direct the Company and the Rights Agent to supplement or
amend any provision of the Rights Agreement in any manner, whether or not such
supplement or amendment is adverse to any holder of Rights, and the Company and
the Rights Agent shall so supplement or amend such provision; provided, however,
that from and after the earliest of (a) the tenth business day (or such later
day as shall be designated by the Board of Directors) following the date of the
commencement of, or the announcement of an intention to make, a tender offer or
exchange offer, the consummation of which would cause any person to become a 15%
Stockholder, (b) the 15% Ownership Date, (c) the first event of the type giving
rise to exercise rights under Section 5(c) above, or (d) the Redemption Date,
the Rights Agreement shall not be supplemented or amended in any manner that
would materially and adversely affect any holder of outstanding Rights other
than a 15% Stockholder; provided,
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further that from and after the first date upon which there shall exist a 15%
Stockholder, the Rights Agreement shall not be supplemented or amended in any
manner without the approval of a majority of the Company's directors who were
directors prior to such date.
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