EXHIBIT 10.11
MIPS TECHNOLOGIES, INC.
AND
FLEET NATIONAL BANK
RIGHTS AGENT
PREFERRED STOCK RIGHTS AGREEMENT
DATED AS OF JUNE 2, 2000
TABLE OF CONTENTS
PAGE
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Section 1. Certain Definitions.................................................................................1
Section 2. Appointment of Rights Agent.........................................................................7
Section 3. Issuance of Rights Certificates.....................................................................7
Section 4. Form of Rights Certificates.........................................................................9
Section 5. Countersignature and Registration..................................................................10
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated,
Destroyed, Lost or Stolen Rights Certificates......................................................10
Section 7. Exercise of Rights; Exercise Price; Expiration Date of Rights......................................11
Section 8. Cancellation and Destruction of Rights Certificates................................................13
Section 9. Reservation and Availability of Preferred Shares...................................................13
Section 10. Record Date........................................................................................14
Section 11. Adjustment of Exercise Price, Number of Shares or Number of Rights.................................15
Section 12. Certificate of Adjusted Exercise Price or Number of Shares.........................................21
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power...............................21
Section 14. Fractional Rights and Fractional Shares............................................................25
Section 15. Rights of Action...................................................................................26
Section 16. Agreement of Rights Holders........................................................................26
Section 17. Rights Certificate Holder Not Deemed a Stockholder.................................................27
Section 18. Concerning the Rights Agent........................................................................27
Section 19. Merger or Consolidation or Change of Name of Rights Agent..........................................28
Section 20. Duties of Rights Agent.............................................................................28
Section 21. Change of Rights Agent.............................................................................30
Section 22. Issuance of New Rights Certificates................................................................31
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Section 23. Redemption.........................................................................................31
Section 24. Exchange...........................................................................................32
Section 25. Notice of Certain Events...........................................................................34
Section 26. Notices............................................................................................34
Section 27. Supplements and Amendments.........................................................................35
Section 28. Successors.........................................................................................36
Section 29. Determinations and Actions by the Board of Directors, etc..........................................36
Section 30. Benefits of this Agreement.........................................................................36
Section 31. Severability.......................................................................................36
Section 32. Governing Law......................................................................................36
Section 33. Counterparts.......................................................................................37
Section 34. Descriptive Headings...............................................................................37
EXHIBITS
Exhibit A Form of Certificate of Designation
Exhibit B Form of Rights Certificate
Exhibit C Summary of Rights
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PREFERRED STOCK RIGHTS AGREEMENT
This Preferred Stock Rights Agreement, is dated as of June 2, 2000,
between MIPS Technologies, Inc., a Delaware corporation, and Fleet National
Bank, a national banking association, as rights agent (the "Rights Agent").
On June 2, 2000 (the "RIGHTS DIVIDEND DECLARATION DATE"), the Board
of Directors of the Company authorized and declared a dividend of one
Preferred Share Purchase Right (a "RIGHT") for each Common Share (as
hereinafter defined) of the Company outstanding as of the Close of Business
(as hereinafter defined) on June 19, 2000 (the "RECORD DATE"), each Right
representing the right to purchase one one-thousandth (0.001) of a share of
Series A Participating Preferred Stock (as such number may be adjusted
pursuant to the provisions of this Agreement), having the rights, preferences
and privileges set forth in the form of Certificate of Designations of
Rights, Preferences and Privileges of Series A Participating Preferred Stock
attached hereto as EXHIBIT A, upon the terms and subject to the conditions
herein set forth, and further authorized and directed the issuance of one
Right (as such number may be adjusted pursuant to the provisions of this
Agreement) with respect to each Common Share that shall become outstanding
between the Record Date and the earlier of the Distribution Date and the
Expiration Date (as such terms are hereinafter defined), and in certain
circumstances after the Distribution Date.
NOW, THEREFORE, in consideration of the promises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. CERTAIN DEFINITIONS. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of (i) 20% or more of the Class A Common Shares then
outstanding, or (ii) 20% of the Class B Common Shares then outstanding, or
(iii) 15% of the Company's Common Shares then outstanding (each such share
ownership amount herein referred to as a "THRESHOLD AMOUNT"), but shall not
include any Excluded Person (as such term is hereinafter defined).
Notwithstanding the foregoing, no Person shall be deemed to be an Acquiring
Person as the result of an acquisition of Common Shares by the Company which,
by reducing the number of shares outstanding, increases the proportionate
number of shares beneficially owned by such Person to a Threshold Amount;
PROVIDED, HOWEVER, that if a Person shall become the Beneficial Owner of a
Threshold Amount then outstanding by reason of share purchases by the Company
and shall, after such share purchases by the Company, become the Beneficial
Owner of any additional Common Shares of the Company (other than pursuant to
a dividend or distribution paid or made by the Company on the outstanding
Common Shares in Common Shares or pursuant to a split or subdivision of the
outstanding Common Shares), then such Person shall be deemed to be an
Acquiring Person unless upon becoming the Beneficial Owner of such additional
Common Shares of the Company such Person does not beneficially own a
Threshold
Amount. Notwithstanding the foregoing, (i) if the Company's Board of
Directors determines in good faith that a Person who would otherwise be an
ACQUIRING PERSON, as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently (including, without limitation,
because (A) such Person was unaware that it beneficially owned a percentage
of the Common Shares that would otherwise cause such Person to be an
Acquiring Person, as defined pursuant to the foregoing provisions of this
paragraph (a), or (B) such Person was aware of the extent of the Common
Shares it beneficially owned but had no actual knowledge of the consequences
of such beneficial ownership under this Agreement) and without any intention
of changing or influencing control of the Company, and if such Person
divested or divests as promptly as practicable a sufficient number of Common
Shares so that such Person would no longer be an Acquiring Person, as defined
pursuant to the foregoing provisions of this paragraph (a), then such Person
shall not be deemed to be or to have become an "Acquiring Person" for any
purposes of this Agreement; and (ii) if, as of the date hereof, any Person is
the Beneficial Owner of a Threshold Amount, such Person shall not be or
become an Acquiring Person, as defined pursuant to the foregoing provisions
of this paragraph (a), unless and until such time as such Person shall become
the Beneficial Owner of additional Common Shares (other than pursuant to a
dividend or distribution paid or made by the Company on the outstanding
Common Shares in Common Shares or pursuant to a split or subdivision of the
outstanding Common Shares), unless, upon becoming the Beneficial Owner of
such additional Common Shares, such Person is not then the Beneficial Owner
of a Threshold Amount.
(b) "ADJUSTMENT FRACTION" shall have the meaning set forth
in Section 11(a)(i) hereof.
(c) "AFFILIATE" and "ASSOCIATE" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General Rules and
Regulations under the Exchange Act, as in effect on the date of this
Agreement.
(d) A Person shall be deemed the "BENEFICIAL OWNER" of and
shall be deemed to "BENEFICIALLY OWN" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates beneficially owns, directly or indirectly, for
purposes of Section 13(d) of the Exchange Act and Rule 13d-3 thereunder (or
any comparable or successor law or regulation);
(ii) which such Person or any of such Person's
Affiliates or Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (other than customary agreements with
and between underwriters and selling group members with respect to a bona
fide public offering of securities), or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or options,
or otherwise; PROVIDED, HOWEVER, that a Person shall not be deemed pursuant
to this Section 1(d)(ii)(A) to be the Beneficial Owner of, or to beneficially
own, (1) securities tendered pursuant to a tender or exchange offer made by
or on behalf of such Person or any of such Person's Affiliates or Associates
until such tendered securities are accepted for purchase or exchange, or
(2) securities which a Person or any of such Person's Affiliates or Associates
may be
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deemed to have the right to acquire pursuant to any merger or other
acquisition agreement between the Company and such Person (or one or more of
its Affiliates or Associates) if such agreement has been approved by the
Board of Directors of the Company prior to there being an Acquiring Person;
or (B) the right to vote pursuant to any agreement, arrangement or
understanding; PROVIDED, HOWEVER, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security under this Section
1(d)(ii)(B) if the agreement, arrangement or understanding to vote such
security (1) arises solely from a revocable proxy or consent given to such
Person in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations of the
Exchange Act and (2) is not also then reportable on Schedule 13D under the
Exchange Act (or any comparable or successor report); or
(iii) which are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof) with
which such Person or any of such Person's Affiliates or Associates has any
agreement, arrangement or understanding, whether or not in writing (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities) for the
purpose of acquiring, holding, voting (except to the extent contemplated by
the proviso to Section 1(d)(ii)(B)) or disposing of any securities of the
Company; PROVIDED, HOWEVER, that in no case shall an officer or director of
the Company be deemed (x) the Beneficial Owner of any securities beneficially
owned by another officer or director of the Company solely by reason of
actions undertaken by such persons in their capacity as officers or directors
of the Company or (y) the Beneficial Owner of securities held of record by
the trustee of any employee benefit plan of the Company or any Subsidiary of
the Company for the benefit of any employee of the Company or any Subsidiary
of the Company, other than the officer or director, by reason of any
influence that such officer or director may have over the voting of the
securities held in the plan.
(e) "BUSINESS DAY" shall mean any day other than a
Saturday, Sunday or a day on which banking institutions in New York or the
city in which the office of the Rights Agent is located are authorized or
obligated by law or executive order to close.
(f) "CLOSE OF BUSINESS" on any given date shall mean 5:00
P. M., New York time, on such date; PROVIDED, HOWEVER, that if such date is
not a Business Day it shall mean 5:00 P.M., New York time, on the next
succeeding Business Day.
(g) "COMMON SHARES" when used with reference to the Company
shall mean the shares of Class A Common Stock of the Company, par value
$0.001 per share or the shares of Class B Common Stock of the Company, par value
$0.001 per share. Common Shares when used with reference to any Person other
than the Company shall mean the capital stock (or equity interest) with the
greatest voting power of such other Person or, if such other Person is a
Subsidiary of another Person, the Person or Persons which ultimately control
such first-mentioned Person.
(h) "COMMON STOCK EQUIVALENTS" shall have the meaning set
forth in Section 11(a)(iii) hereof.
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(i) "COMPANY" shall mean MIPS Technologies, Inc., a
Delaware corporation, subject to the terms of Section 13(a)(iii)(C) hereof.
(j) "CURRENT PER SHARE MARKET PRICE" of any security (a
"Security" for purposes of this definition), for all computations other than
those made pursuant to Section 11(a)(iii) hereof, shall mean the average of
the daily closing prices per share of such Security for the thirty (30)
consecutive Trading Days immediately prior to such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the Current Per
Share Market Price of any Security on any date shall be deemed to be the
average of the daily closing prices per share of such Security for the ten
(10) consecutive Trading Days immediately prior to such date; PROVIDED,
HOWEVER, that in the event that the Current Per Share Market Price of the
Security is determined during a period following the announcement by the
issuer of such Security of (i) a dividend or distribution on such Security
payable in shares of such Security or securities convertible into such shares
or (ii) any subdivision, combination or reclassification of such Security,
and prior to the expiration of the applicable thirty (30) Trading Day or ten
(10) Trading Day period, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Per Share Market
Price shall be appropriately adjusted to reflect the current market price per
share equivalent of such Security. The closing price for each day shall be
the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New
York Stock Exchange or, if the Security is not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to trading
on any national securities exchange, the last sale price or, if such last
sale price is not reported, the average of the high bid and low asked prices
in the over-the-counter market, as reported by Nasdaq or such other system
then in use, or, if on any such date the Security is not quoted by any such
organization, the average of the closing bid and asked prices as furnished by
a professional market maker making a market in the Security selected by the
Board of Directors of the Company. If on any such date no market maker is
making a market in the Security, the fair value of such shares on such date
as determined in good faith by the Board of Directors of the Company shall be
used. If the Preferred Shares are not publicly traded, the Current Per Share
Market Price of the Preferred Shares shall be conclusively deemed to be the
product of (x) the Current Per Share Market Price of the Common Shares as
determined pursuant to this Section 1(j), as appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the date hereof, multiplied by 1000. If the Security is not publicly
held or so listed or traded, Current Per Share Market Price shall mean the
fair value per share as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes.
(k) "CURRENT VALUE" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(l) "DISTRIBUTION DATE" shall mean the earlier of (i) the
Close of Business on the tenth day (or such later date as may be determined
by action of the Company's Board of Directors)
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after the Shares Acquisition Date (or, if the tenth day after the Shares
Acquisition Date occurs before the Record Date, the Close of Business on the
Record Date) or (ii) the Close of Business on the tenth Business Day (or such
later date as may be determined by action of the Company's Board of
Directors) after the date that a tender or exchange offer by any Person
(other than the Company, any Subsidiary of the Company, any employee benefit
plan of the Company or of any Subsidiary of the Company, or any Person or
entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan) is first published or sent or given within the
meaning of Rule 14d-2(a) of the General Rules and Regulations under the
Exchange Act, if, assuming the successful consummation thereof, such Person
would be an Acquiring Person.
(m) "EQUIVALENT SHARES" shall mean Preferred Shares and any
other class or series of capital stock of the Company which is entitled to
the same rights, privileges and preferences as the Preferred Shares.
(n) "EXCHANGE ACT" shall mean the Securities Exchange Act
of 1934, as amended.
(o) "EXCHANGE RATIO" shall have the meaning set forth in
Section 24(a) hereof.
(p) "EXCLUDED PERSON" shall mean the Company, any
Subsidiary of the Company or any employee benefit plan of the Company or of
any Subsidiary of the Company, or any entity holding Common Shares for or
pursuant to the terms of any such plan.
(q) "EXERCISE PRICE" shall have the meaning set forth in
Section 4(a) hereof.
(r) "EXPIRATION DATE" shall mean the earliest to occur of:
(i) the Close of Business on the Final Expiration Date, (ii) the Redemption
Date, or (iii) the time at which the Board of Directors orders the exchange
of the Rights as provided in Section 24 hereof.
(s) "FINAL EXPIRATION DATE" shall mean June 19, 2010.
(t) "NASDAQ" shall mean the National Association of
Securities Dealers, Inc. Automated Quotations System.
(u) "PERSON" shall mean any individual, firm, corporation
or other entity, and shall include any successor (by merger or otherwise) of
such entity.
(v) "POST-EVENT TRANSFEREE" shall have the meaning set
forth in Section 7(e) hereof.
(w) "PREFERRED SHARES" shall mean shares of Series A
Participating Preferred Stock, par value $0. 001 per share, of the Company.
(x) "PRE-EVENT TRANSFEREE" shall have the meaning set forth
in Section 7(e) hereof.
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(y) "PRINCIPAL PARTY" shall have the meaning set forth in
Section 13(b) hereof.
(z) "RECORD DATE" shall have the meaning set forth in the
recitals at the beginning of this Agreement.
(aa) "REDEMPTION DATE" shall have the meaning set forth in
Section 23(a) hereof.
(bb) "REDEMPTION PRICE" shall have the meaning set forth in
Section 23(a) hereof.
(cc) "RIGHTS" shall have the meaning set forth in the
recitals at the beginning of this Agreement.
(dd) "RIGHTS AGENT" shall mean (i) Fleet National Bank, a
national banking association, (ii) its successor or replacement as provided
in Sections 19 and 21 hereof or (iii) any additional Person appointed
pursuant to Section 2 hereof.
(ee) "RIGHTS CERTIFICATE" shall mean a certificate
substantially in the form attached hereto as Exhibit B.
(ff) "RIGHTS DIVIDEND DECLARATION DATE" shall have the
meaning set forth in the recitals at the beginning of this Agreement.
(gg) "SECTION 11(a)(ii) TRIGGER DATE" shall have the meaning
set forth in Section 11(a)(iii) hereof.
(hh) "SECTION 13 EVENT" shall mean any event described in
clause (i), (ii) or (iii) of Section 13(a) hereof.
(ii) "SECURITIES ACT" shall mean the Securities Act of 1933,
as amended.
(jj) "SHARES ACQUISITION DATE" shall mean the first date of
public announcement (which, for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person
has become such; PROVIDED THAT, if such Person is determined not to have
become an Acquiring Person pursuant to Section 1(a) hereof, then no Shares
Acquisition Date shall be deemed to have occurred.
(kk) "SPREAD" shall have the meaning set forth in Section
11(a)(iii) hereof.
(ll) "SUBSIDIARY" of any Person shall mean any corporation
or other entity of which an amount of voting securities sufficient to elect a
majority of the directors or Persons having similar authority of such
corporation or other entity is beneficially owned, directly or indirectly, by
such Person, or any corporation or other entity otherwise controlled by such
Person.
(mm) "SUBSTITUTION PERIOD" shall have the meaning set forth
in Section 11(a)(iii) hereof.
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(nn) "SUMMARY OF RIGHTS" shall mean a summary of this
Agreement substantially in the form attached hereto as Exhibit C.
(oo) "TOTAL EXERCISE PRICE" shall have the meaning set forth
in Section 4(a) hereof.
(pp) "TRADING DAY" shall mean a day on which the principal
national securities exchange on which a referenced security is listed or
admitted to trading is open for the transaction of business or, if a
referenced security is not listed or admitted to trading on any national
securities exchange, a Business Day.
(qq) A "TRIGGERING EVENT" shall be deemed to have occurred
upon any Person becoming an Acquiring Person.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company and the holders of
the Rights (who, in accordance with Section 3 hereof, shall prior to the
Distribution Date also be the holders of the Common Shares) in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-Rights
Agents as it may deem necessary or desirable, upon ten (10) 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
co-Rights Agent.
Section 3. ISSUANCE OF RIGHTS CERTIFICATES.
(a) Until the Distribution Date, (i) the Rights will be
evidenced (subject to the provisions of Sections 3(b) and 3(c) hereof) by the
certificates for Common Shares registered in the names of the holders thereof
(which certificates shall also be deemed to be Rights Certificates) and not
by separate Rights Certificates and (ii) the right to receive Rights
Certificates will be transferable only in connection with the transfer of
Common Shares. Until the earlier of the Distribution Date or the Expiration
Date, the surrender for transfer of certificates for Common Shares shall also
constitute the surrender for transfer of the Rights associated with the
Common Shares represented thereby. As soon as practicable after the
Distribution Date, the Company will prepare and execute, the Rights Agent
will countersign, and the Company will send or cause to be sent (and the
Rights Agent will, if requested, send) by first-class, 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 Rights Certificate evidencing one Right for each Common Share so
held, subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per Common Share has been made pursuant to
Section 11 hereof, then at the time of distribution of the Rights
Certificates, the Company shall make the necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that Rights
Certificates representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates and may be
transferred by the transfer of the Rights Certificates as permitted hereby,
separately and apart from any transfer of
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Common Shares, and the holders of such Rights Certificates as listed in the
records of the Company or any transfer agent or registrar for the Rights
shall be the record holders thereof.
(b) On the Record Date or as soon as practicable
thereafter, the Company will send a copy of the Summary of Rights by
first-class, postage-prepaid mail, to each record holder of Common Shares as
of the Close of Business on the Record Date, at the address of such holder
shown on the records of the Company's transfer agent and registrar. With
respect to certificates for Common Shares outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such
certificates registered in the names of the holders thereof together with the
Summary of Rights.
(c) Unless the Board of Directors by resolution adopted at
or before the time of the issuance of any Common Shares after the Record Date
but prior to the earlier of the Distribution Date or the Expiration Date (or,
in certain circumstances provided in Section 22 hereof, after the
Distribution Date) specifies to the contrary, Rights shall be issued in
respect of all Common Shares that are so issued, and Certificates
representing such Common Shares shall also be deemed to be certificates for
Rights, and shall bear the following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO
CERTAIN RIGHTS AS SET FORTH IN A RIGHTS AGREEMENT BETWEEN MIPS
TECHNOLOGIES, INC. AND FLEET NATIONAL BANK (FORMERLY KNOWN AS BANK
BOSTON N.A.), AS THE RIGHTS AGENT, DATED AS OF JUNE 2, 2000, AS
AMENDED, (THE "RIGHTS AGREEMENT"), THE TERMS OF WHICH ARE HEREBY
INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON FILE AT THE
PRINCIPAL EXECUTIVE OFFICES OF MIPS TECHNOLOGIES, INC. UNDER CERTAIN
CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH RIGHTS WILL
BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER BE EVIDENCED
BY THIS CERTIFICATE. MIPS TECHNOLOGIES, INC. WILL MAIL TO THE HOLDER OF
THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT CHARGE AFTER
RECEIPT OF A WRITTEN REQUEST THEREFOR. UNDER CERTAIN CIRCUMSTANCES SET
FORTH IN THE RIGHTS AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON
WHO IS, WAS OR BECOMES AN ACQUIRING PERSON OR ANY ASSOCIATE OR
AFFILIATE THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT),
WHETHER CURRENTLY HELD BY OR ON BEHALF OF SUCH PERSON OR BY ANY
SUBSEQUENT HOLDER, MAY BECOME NULL AND VOID.
With respect to such certificates containing the foregoing legend, until the
earlier of the Distribution Date or the Expiration Date, the Rights
associated with the Common Shares represented by such certificates shall be
evidenced by such certificates alone, and the surrender for transfer of any
such certificate shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby.
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(d) In the event that the Company purchases or acquires any
Common Shares after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares shall be deemed canceled and
retired so that the Company shall not be entitled to exercise any Rights
associated with the Common Shares which are no longer outstanding.
Section 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to
purchase Common Shares and of assignment to be printed on the reverse
thereof) shall be substantially in the form of 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 or a
national market system, on which the Rights may from time to time be listed
or included, or to conform to usage. Subject to the provisions of Section 11
and Section 22 hereof, the Rights Certificates, whenever distributed, shall
be dated as of the Record Date (or in the case of Rights issued with respect
to Common Shares issued by the Company after the Record Date, as of the date
of issuance of such Common Shares) and on their face shall entitle the
holders thereof to purchase such number of one-thousandths of a Preferred
Share as shall be set forth therein at the price set forth therein (such
exercise price per one one-thousandth of a Preferred Share being hereinafter
referred to as the "EXERCISE PRICE" and the aggregate Exercise Price of all
Preferred Shares issuable upon exercise of one Right being hereinafter
referred to as the "TOTAL EXERCISE PRICE"), but the number and type of
securities purchasable upon the exercise of each Right and the Exercise Price
shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a)
or Section 22 hereof that represents Rights beneficially owned by: (i) an
Acquiring Person or any Associate or Affiliate of an Acquiring Person, (ii) a
Post-Event Transferee, (iii) a Pre-Event Transferee or (iv) any subsequent
transferee receiving transferred Rights from a Post-Event Transferee or a
Pre-Event Transferee, either directly or through one or more intermediate
transferees, and any Rights Certificate issued pursuant to Section 6 or
Section 11 hereof upon transfer, exchange, replacement or adjustment of any
other Rights Certificate referred to in this sentence, shall contain (to the
extent feasible) the following legend:
THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.
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Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, its Chief Executive Officer, its
Chief Financial Officer, its President or any Vice President, either manually
or by facsimile signature, and by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal (if any) or a facsimile thereof. The
Rights Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless countersigned. In case any officer
of the Company who shall have signed any of the Rights Certificates shall
cease to be such officer of the Company before countersignature by the Rights
Agent and issuance and delivery by the Company, such Rights Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as though the person
who signed such Rights Certificates on behalf of the Company had not ceased
to be such officer of the Company; and any Rights Certificate may be signed
on behalf of the Company by any person who, at the actual date of the
execution of such Rights Certificate, shall be a proper officer of the
Company to sign such Rights Certificate, although at the date of the
execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will
keep or cause to be kept, at its office designated for such purposes, books
for registration and transfer of the Rights Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders of
the Rights Certificates, the number of Rights evidenced on its face by each
of the Rights Certificates and the date of each of the Rights Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHTS
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Sections 7(e), 14 and 24
hereof, at any time after the Close of Business on the Distribution Date, and
at or prior to the Close of Business on the Expiration Date, any Rights
Certificate or Rights Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Rights Certificates, entitling
the registered holder to purchase a like number of one-thousandths of a
Preferred Share (or, following a Triggering Event, other securities, cash or
other assets, as the case may be) as the Rights Certificate or Rights
Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Rights Certificates shall make such request in writing
delivered to the Rights Agent, and shall surrender the Rights Certificate or
Rights Certificates to be transferred, split up, combined or exchanged at the
office of the Rights Agent designated for such purpose. Neither the Rights
Agent nor the Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights Certificate until the
registered holder shall have completed and signed the certificate contained
in the form of assignment on the reverse side of such Rights Certificate and
shall have provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company shall reasonably request. Thereupon the Rights Agent
shall, subject to Sections 7(e), 14 and 24 hereof, countersign and deliver to
the person entitled thereto a
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Rights Certificate or Rights Certificates, as the case may be, as so
requested. The Company may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with any
transfer, split up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Rights Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and,
at the Company's request, reimbursement to the Company and the Rights Agent
of all reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if mutilated, the
Company will make and deliver a new Rights Certificate of like tenor to the
Rights Agent for delivery to the registered holder in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS; EXERCISE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Subject to Sections 7(e), 23(b) and 24(b) hereof, the
registered holder of any Rights Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date and prior to the Close of Business on the
Expiration Date by surrender of the Rights Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose, together
with payment of the Exercise Price for each one-thousandth of a Preferred
Share (or, following a Triggering Event, other securities, cash or other
assets as the case may be) as to which the Rights are exercised.
(b) The Exercise Price for each one-thousandth of a
Preferred Share issuable pursuant to the exercise of a Right shall initially
be Two Hundred Dollars ($200), shall be subject to adjustment from time to
time as provided in Sections 11 and 13 hereof and shall be payable in lawful
money of the United States of America in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Exercise Price for the number of
one-thousandths of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets as the case may be) to be purchased and an
amount equal to any applicable transfer tax required to be paid by the holder
of such Rights Certificate in accordance with Section 9(e) hereof, the Rights
Agent shall, subject to Section 20(k) hereof, thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares (or make
available, if the Rights Agent is the transfer agent for the Preferred
Shares) a certificate or certificates for the number of one-thousandths of a
Preferred Share (or, following a Triggering Event, other securities, cash or
other assets as the case may be) to be purchased and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests or
(B) if the Company shall have elected to deposit the total number of
one-thousandths of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets as the case may be) issuable upon exercise
of the Rights hereunder with a depositary agent, requisition from the
depositary agent depositary receipts representing such number of
one-thousandths of a Preferred Share (or, following a Triggering Event, other
securities, cash or other assets as the case may be) as are to be purchased
(in which case certificates for the
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Preferred Shares (or, following a Triggering Event, other securities, cash or
other assets as the case may be) represented by such receipts shall be
deposited by the transfer agent with the depositary agent) and the Company
hereby directs the depositary agent to comply with such request, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in
lieu of issuance of fractional shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts, cause the
same to be delivered to or upon the order of the registered holder of such
Rights 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 Rights
Certificate. The payment of the Exercise Price (as such amount may be reduced
(including to zero) pursuant to Section 11(a)(iii) hereof) and an amount
equal to any applicable transfer tax required to be paid by the holder of
such Rights Certificate in accordance with Section 9(e) hereof, may be made
in cash or by certified bank check, cashier's check or bank draft payable to
the order of the Company. In the event that the Company is obligated to issue
securities of the Company other than Preferred Shares, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company will
make all arrangements necessary so that such other securities, cash and/or
other property are available for distribution by the Rights Agent, if and
when appropriate.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Rights
Certificate or to his or her duly authorized assigns, subject to the
provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Triggering Event, any
Rights beneficially owned by (i) an Acquiring Person or an Associate or
Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person
(or of any such Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such (a "POST-EVENT TRANSFEREE"), (iii) a transferee
of an Acquiring Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person becoming such
and receives such Rights pursuant to either (A) a transfer (whether or not
for consideration) from the Acquiring Person to holders of equity interests
in such Acquiring Person or to any Person with whom the Acquiring Person has
any continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which the Company's Board of Directors
has determined is part of a plan, arrangement or understanding which has as a
primary purpose or effect the avoidance of this Section 7(e) (a "PRE-EVENT
TRANSFEREE") or (iv) any subsequent transferee receiving transferred Rights
from a Post-Event Transferee or a Pre-Event Transferee, either directly or
through one or more intermediate transferees, shall become null and void
without any further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of this
Agreement or otherwise. The Company shall use all reasonable efforts to
ensure that the provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but shall have no liability to any holder of Rights
Certificates or to any other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or any of such Acquiring
Person's Affiliates, Associates or transferees hereunder.
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(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence
of any purported exercise as set forth in this Section 7 unless such
registered holder shall, in addition to having complied with the requirements
of Section 7(a), have (i) completed and signed the certificate contained in
the form of election to purchase set forth on the reverse side of the Rights
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner)
or Affiliates or Associates thereof as the Company shall reasonably request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES.
All Rights Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or 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 Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any Rights Certificate purchased or
acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all canceled Rights Certificates to the Company, or
shall, at the written request of the Company, destroy such canceled Rights
Certificates, and in such case shall deliver a certificate evidencing the
destruction thereof to the Company.
Section 9. RESERVATION AND AVAILABILITY OF PREFERRED SHARES.
(a) The Company covenants and agrees that it will use its
best efforts to cause to be reserved and kept available out of its authorized
and unissued Preferred Shares not reserved for another purpose (and,
following the occurrence of a Triggering Event, out of its authorized and
unissued Common Shares and/or other securities), the number of Preferred
Shares (and, following the occurrence of the Triggering Event, Common Shares
and/or other securities) that will be sufficient to permit the exercise in
full of all outstanding Rights.
(b) If the Company shall hereafter list any of its
Preferred Shares on a national securities exchange, then so long as the
Preferred Shares (and, following the occurrence of a Triggering Event, Common
Shares and/or other securities) issuable and deliverable upon exercise of the
Rights may be listed on such exchange, the Company shall use its best efforts
to cause, from and after such time as the Rights become exercisable (but only
to the extent that it is reasonably likely that the Rights will be
exercised), all shares reserved for such issuance to be listed on such
exchange upon official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first occurrence of
a Triggering Event in which the consideration to be delivered by the Company
upon exercise of the Rights is described in Section 11(a)(ii) or Section
11(a)(iii) hereof, or as soon as is required by law following the
Distribution Date, as the case may be, a registration statement under the
Securities Act with respect to the securities purchasable upon exercise of
the Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing and (iii) cause
such registration statement to remain
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effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the earlier of (A) the date as of which the Rights are
no longer exercisable for such securities and (B) the date of expiration of
the Rights. The Company may temporarily suspend, for a period not to exceed
ninety (90) days after the date set forth in clause (i) of the first sentence
of this Section 9(c), the exercisability of the Rights in order to prepare
and file such registration statement and permit it to become effective. Upon
any such suspension, the Company shall issue a public announcement stating,
and notify the Rights Agent, that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement and notification to
the Rights Agent at such time as the suspension is no longer in effect. The
Company will also take such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction, unless the requisite qualification in such
jurisdiction shall have been obtained, or an exemption therefrom shall be
available, and until a registration statement has been declared and remains
effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all Preferred Shares (or other
securities of the Company) delivered upon exercise of 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.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the original issuance or delivery
of the Rights Certificates or of any Preferred Shares (or other securities of
the Company) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any
transfer or delivery of Rights Certificates to a person other than, or the
issuance or delivery of certificates or depositary receipts for the Preferred
Shares (or other securities of the Company) in a name other than that of, the
registered holder of the Rights Certificate evidencing Rights surrendered for
exercise or to issue or to deliver any certificates or depositary receipts
for Preferred Shares (or other securities of the Company) upon the exercise
of any Rights until any such tax shall have been paid (any such tax being
payable by the holder of such Rights Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no such tax
is due.
Section 10. RECORD DATE. Each Person in whose name any certificate
for a number of one-thousandths of a Preferred Share (or other 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 Preferred Shares (or other
securities of the Company) represented thereby on, and such certificate shall
be dated, the date upon which the Rights Certificate evidencing such Rights
was duly surrendered and payment of the Total Exercise Price with respect to
which the Rights have been exercised (and any applicable transfer taxes) was
made; PROVIDED, HOWEVER, that if the date of such surrender and payment is a
date upon which the transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares on, and such
certificate shall be dated, the next succeeding Business Day on which the
transfer books of the Company are open. Prior to the exercise of the
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Rights evidenced thereby, the holder of a Rights Certificate shall not be
entitled to any rights of a holder of Preferred Shares (or other securities
of the Company) for which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other distributions or
to exercise any preemptive rights, and shall not be entitled to receive any
notice of any proceedings of the Company, except as provided herein.
Section 11. ADJUSTMENT OF EXERCISE PRICE, NUMBER OF SHARES OR
NUMBER OF RIGHTS. The Exercise Price, the number and kind of shares or other
property covered by each Right and the number of Rights outstanding are
subject to adjustment from time to time as provided in this Section 11.
(a) (i) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares payable
in Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C)
combine the outstanding Preferred Shares (by reverse stock split or
otherwise) into a smaller number of Preferred Shares, or (D) issue any shares
of its capital stock in a reclassification of the Preferred Shares (including
any such reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation), then, in each
such event, except as otherwise provided in this Section 11 and Section 7(e)
hereof: (1) the Exercise Price in effect at the time of the record date for
such dividend or of the effective date of such subdivision, combination or
reclassification shall be adjusted so that the Exercise Price thereafter
shall equal the result obtained by dividing the Exercise Price in effect
immediately prior to such time by a fraction (the "ADJUSTMENT FRACTION"), the
numerator of which shall be the total number of Preferred Shares (or shares
of capital stock issued in such reclassification of the Preferred Shares)
outstanding immediately following such time and the denominator of which
shall be the total number of Preferred Shares outstanding immediately prior
to such time; PROVIDED, HOWEVER, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value
of the shares of capital stock of the Company issuable upon exercise of such
Right; and (2) the number of one-thousandths of a Preferred Share (or share
of such other capital stock) issuable upon the exercise of each Right shall
equal the number of one-thousandths of a Preferred Share (or share of such
other capital stock) as was issuable upon exercise of a Right immediately
prior to the occurrence of the event described in clauses (A)-(D) of this
Section 11(a)(i), multiplied by the Adjustment Fraction; provided, however,
that, no such adjustment shall be made pursuant to this Section 11(a)(i) to
the extent that there shall have simultaneously occurred an event described
in clause (A), (B), (C) or (D) of Section 11(n) with a proportionate
adjustment being made thereunder. Each Common Share that shall become
outstanding after an adjustment has been made pursuant to this Section
11(a)(i) shall have associated with it the number of Rights, exercisable at
the Exercise Price and for the number of one-thousandths of a Preferred Share
(or shares of such other capital stock) as one Common Share has associated
with it immediately following the adjustment made pursuant to this Section
11(a)(i).
(ii) Subject to Section 24 of this Agreement, in the
event that a Triggering Event shall have occurred, then promptly following
such Triggering Event each holder of a Right, except as provided in Section
7(e) hereof, shall thereafter have the right to receive for each Right,
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upon exercise thereof in accordance with the terms of this Agreement and
payment of the Exercise Price in effect immediately prior to the occurrence
of the Triggering Event, in lieu of a number of one-thousandths of a
Preferred Share, such number of Common Shares of the Company as shall equal
the quotient obtained by dividing (A) the product obtained by multiplying (1)
the Exercise Price in effect immediately prior to the occurrence of the
Triggering Event by (2) the number of one-thousandths of a Preferred Share
for which a Right was exercisable (or would have been exercisable if the
Distribution Date had occurred) immediately prior to the first occurrence of
a Triggering Event, by (B) 50% of the Current Per Share Market Price for
Common Shares on the date of occurrence of the Triggering Event; PROVIDED,
HOWEVER, that the Exercise Price and the number of Common Shares of the
Company so receivable upon exercise of a Right shall be subject to further
adjustment as appropriate in accordance with Section 11(e) hereof to reflect
any events occurring in respect of the Common Shares of the Company after the
occurrence of the Triggering Event.
(iii) In lieu of issuing Common Shares in accordance with
Section 11(a)(ii) hereof, the Company may, if the Company's Board of
Directors determines that such action is necessary or appropriate and not
contrary to the interest of holders of Rights and, in the event that the
number of Common Shares which are authorized by the Company's Certificate of
Incorporation but not outstanding or reserved for issuance for purposes other
than upon exercise of the Rights are not sufficient to permit the exercise in
full of the Rights, or if any necessary regulatory approval for such issuance
has not been obtained by the Company, the Company shall: (A) determine the
excess of (1) the value of the Common Shares issuable upon the exercise of a
Right (the "CURRENT VALUE") over (2) the Exercise Price (such excess, the
"SPREAD") and (B) with respect to each Right, make adequate provision to
substitute for such Common Shares, upon exercise of the Rights, (1) cash, (2)
a reduction in the Exercise Price, (3) other equity securities of the Company
(including, without limitation, shares or units of shares of any series of
preferred stock which the Company's Board of Directors has deemed to have the
same value as Common Shares (such shares or units of shares of preferred
stock are herein called "COMMON STOCK EQUIVALENTS")), except to the extent
that the Company has not obtained any necessary stockholder or regulatory
approval for such issuance, (4) debt securities of the Company, except to the
extent that the Company has not obtained any necessary stockholder or
regulatory approval for such issuance, (5) other assets or (6) any
combination of the foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Company's Board
of Directors based upon the advice of a nationally recognized investment
banking firm selected by the Company's Board of Directors; PROVIDED, HOWEVER,
that if the Company shall not have made adequate provision to deliver value
pursuant to clause (B) above within thirty (30) days following the later of
(x) the first occurrence of a Triggering Event and (y) the date on which the
Company's right of redemption pursuant to Section 23(a) expires (the later of
(x) and (y) being referred to herein as the "SECTION 11(a)(ii) TRIGGER
DATE"), then the Company shall be obligated to deliver, upon the surrender
for exercise of a Right and without requiring payment of the Exercise Price,
Common Shares (to the extent available), except to the extent that the
Company has not obtained any necessary stockholder or regulatory approval for
such issuance, and then, if necessary, cash, which shares and/or cash have an
aggregate value equal to the Spread. If the Company's Board of Directors
shall determine in good faith that it is likely that sufficient additional
Common Shares could be authorized for issuance upon exercise in full of the
Rights or that any necessary regulatory approval for such issuance will be
obtained, the
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thirty (30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the Section 11(a)(ii)
Trigger Date, in order that the Company may seek stockholder approval for the
authorization of such additional shares or take action to obtain such
regulatory approval (such period, as it may be extended, the "SUBSTITUTION
PERIOD"). To the extent that the Company determines that some action need be
taken pursuant to the first and/or second sentences of this Section
11(a)(iii), the Company (x) shall provide, subject to Section 7(e) hereof,
that such action shall apply uniformly to all outstanding Rights and (y) may
suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares,
to take any action to obtain any required regulatory approval and/or to
decide the appropriate form of distribution to be made pursuant to such first
sentence and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a
public announcement at such time as the suspension is no longer in effect.
For purposes of this Section 11(a)(iii), the value of the Common Shares shall
be the Current Per Share Market Price of the Common Shares on the Section
11(a)(ii) Trigger Date and the value of any Common Stock Equivalent shall be
deemed to have the same value as the Common Shares on such date.
(b) In case the Company shall, at any time after the date
of this Agreement, fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Shares entitling such holders (for a
period expiring within forty-five (45) calendar days after such record date)
to subscribe for or purchase Preferred Shares or Equivalent Shares or
securities convertible into Preferred Shares or Equivalent Shares at a price
per share (or having a conversion price per share, if a security convertible
into Preferred Shares or Equivalent Shares) less than the then Current Per
Share Market Price of the Preferred Shares or Equivalent Shares on such
record date, then, in each such case, 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 the number of Preferred Shares and Equivalent Shares (if
any) outstanding on such record date, plus the number of Preferred Shares or
Equivalent Shares, as the case may be, which the aggregate offering price of
the total number of Preferred Shares or Equivalent Shares, as the case may
be, to be offered or issued (and/or the aggregate initial conversion price of
the convertible securities to be offered or issued) would purchase at such
current market price, and the denominator of which shall be the number of
Preferred Shares and Equivalent Shares (if any) outstanding on such record
date, plus the number of additional Preferred Shares or Equivalent Shares, as
the case may be, to be offered for subscription or purchase (or into which
the convertible securities so to be offered are initially convertible);
PROVIDED, HOWEVER, that in no event shall the consideration to be paid upon
the exercise of one Right be less than the aggregate par value of the shares
of capital stock of the Company issuable upon exercise of one Right. In case
such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be
as determined in good faith by the Company's Board of Directors, whose
determination shall be described in a statement filed with the Rights Agent
and shall be binding on the Rights Agent and the holders of the Rights.
Preferred Shares and Equivalent Shares owned by or held for the account of
the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed, and in the event that such rights, options or warrants
are not so issued, the Exercise Price shall be
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adjusted to be the Exercise Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall, at any time after the date
of this Agreement, fix a record date for the making of a distribution to all
holders of the Preferred Shares or of any class or series of Equivalent
Shares (including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness or assets (other than a regular
quarterly cash dividend, if any, or a dividend payable in Preferred Shares)
or subscription rights, options or warrants (excluding those referred to in
Section 11(b)), then, in each such case, 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 the Current Per Share Market Price of a Preferred Share or
an Equivalent Share on such record date, less the fair market value per
Preferred Share or Equivalent Share (as determined in good faith by the Board
of Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the cash, assets or
evidences of indebtedness so to be distributed or of such subscription rights
or warrants applicable to a Preferred Share or Equivalent Share, as the case
may be, and the denominator of which shall be such Current Per Share Market
Price of a Preferred Share or Equivalent Share on such record date; PROVIDED,
HOWEVER, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed,
and in the event that such distribution is not so made, the Exercise Price
shall be adjusted to be the Exercise Price which would have been in effect if
such record date had not been fixed.
(d) Anything herein to the contrary notwithstanding, no
adjustment in the Exercise Price shall be required unless such adjustment
would require an increase or decrease of at least one percent (1.0%) of the
Exercise Price; PROVIDED, HOWEVER, that any adjustments which by reason of
this Section 11(d) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth
of a Common Share or other share or one hundred-thousandth of a Preferred
Share, as the case may be. Notwithstanding the first sentence of this Section
11(d), any adjustment required by this Section 11 shall be made no later than
the earlier of (i) three (3) years from the date of the transaction which
requires such adjustment or (ii) the Expiration Date.
(e) If as a result of an adjustment made pursuant to
Section 11(a) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock other
than Preferred Shares, thereafter the number of such other shares so
receivable upon exercise of any Right and, if required, the Exercise Price
thereof, shall be subject to adjustment from time to time in a manner and on
terms as nearly equivalent as practicable to the provisions with respect to
the Preferred Shares contained in Sections 11(a), 11(b), 11(c), 11(d), 11(g),
11(h), 11(i), 11(j), 11(k) and 11(l), and the provisions of Sections 7, 9,
10, 13 and 14 with respect to the Preferred Shares shall apply on like terms
to any such other shares.
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(f) All Rights originally issued by the Company subsequent
to any adjustment made to the Exercise Price hereunder shall evidence the
right to purchase, at the adjusted Exercise Price, the number of
one-thousandths of a Preferred Share purchasable from time to time hereunder
upon exercise of the Rights, all subject to further adjustment as provided
herein.
(g) Unless the Company shall have exercised its election as
provided in Section 11(h), upon each adjustment of the Exercise Price as a
result of the calculations made in Section 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Exercise Price,
that number of Preferred Shares (calculated to the nearest one
hundred-thousandth of a share) obtained by (i) multiplying (x) the number of
Preferred Shares covered by a Right immediately prior to this adjustment, by
(y) the Exercise Price in effect immediately prior to such adjustment of the
Exercise Price, and (ii) dividing the product so obtained by the Exercise
Price in effect immediately after such adjustment of the Exercise Price.
(h) The Company may elect on or after the date of any
adjustment of the Exercise Price as a result of the calculations made in
Section 11(b) or (c) to adjust the number of Rights, in substitution for 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-thousandths 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
hundred-thousandth) obtained by dividing the Exercise Price in effect
immediately prior to adjustment of the Exercise Price by the Exercise Price
in effect immediately after adjustment of the Exercise Price. The Company
shall make a public announcement of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the
date on which the Exercise Price is adjusted or any day thereafter, but, if
any Rights Certificates have been issued, shall be at least ten (10) days
later than the date of the public announcement. If Rights Certificates have
been issued, upon each adjustment of the number of Rights pursuant to this
Section 11(h), the Company shall, as promptly as practicable, cause to be
distributed to holders of record of Rights Certificates on such record date
Rights Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be distributed
to such holders of record in substitution and replacement for the Rights
Certificates held by such holders prior to the date of adjustment, and upon
surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued,
executed and countersigned in the manner provided for herein (and may bear,
at the option of the Company, the adjusted Exercise Price) and shall be
registered in the names of the holders of record of Rights Certificates on
the record date specified in the public announcement.
(i) Irrespective of any adjustment or change in the
Exercise Price or the number of Preferred Shares issuable upon the exercise
of the Rights, the Rights Certificates theretofore and thereafter issued may
continue to express the Exercise Price per one one-thousandth of a Preferred
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Share and the number of one-thousandths of a Preferred Share which were
expressed in the initial Rights Certificates issued hereunder.
(j) Before taking any action that would cause an adjustment
reducing the Exercise Price below the par or stated value, if any, of the
number of one-thousandths of a Preferred Share issuable upon exercise of the
Rights, the Company shall take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and
legally issue as fully paid and nonassessable shares such number of
one-thousandths of a Preferred Share at such adjusted Exercise Price.
(k) 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 issuing to the holder of any Right exercised after such record
date of the number of one-thousandths 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-thousandths 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 xxxx or other appropriate instrument evidencing such holder's right to
receive such additional shares (fractional or otherwise) upon the occurrence
of the event requiring such adjustment.
(l) Anything in this Section 11 to the contrary
notwithstanding, prior to the Distribution Date, the Company shall be
entitled to make such reductions 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 or Common Shares,
(ii) issuance wholly for cash of any Preferred or Common Shares at less than the
current market price, (iii) issuance wholly for cash of Preferred or Common
Shares or securities which by their terms are convertible into or
exchangeable for Preferred or Common Shares, (iv) stock dividends or
(v) issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred or Common Shares
shall not be taxable to such stockholders.
(m) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Sections 23, 24 or 27
hereof, take (or permit to be taken) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be afforded by
the Rights.
(n) In the event that the Company shall at any time after
the date of this Agreement (A) declare a dividend on the Common Shares
payable in Common Shares, (B) subdivide the outstanding Common Shares,
(C) combine the outstanding Common Shares (by reverse stock split or otherwise)
into a smaller number of Common Shares, or (D) issue any shares of its
capital stock 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, in each such
event, except as otherwise provided in this Section 11(a) and Section 7(e)
hereof: (1) each Common Share (or shares of capital stock issued in such
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reclassification of the Common Shares) outstanding immediately following such
time shall have associated with it the number of Rights as were associated
with one Common Share immediately prior to the occurrence of the event
described in clauses (A)-(D) above; (2) the Exercise Price in effect at the
time of the record date for such dividend or of the effective date of such
subdivision, combination or reclassification shall be adjusted so that the
Exercise Price thereafter shall equal the result obtained by multiplying the
Exercise Price in effect immediately prior to such time by a fraction, the
numerator of which shall be the total number of Common Shares outstanding
immediately prior to the event described in clauses (A)-(D) above, and the
denominator of which shall be the total number of Common Shares outstanding
immediately after such event; PROVIDED, HOWEVER, that in no event shall the
consideration to be paid upon the exercise of one Right be less than the
aggregate par value of the shares of capital stock of the Company issuable
upon exercise of such Right; and (3) the number of one-thousandths of a
Preferred Share (or shares of such other capital stock) issuable upon the
exercise of each Right outstanding after such event shall equal the number of
one-thousandths of a Preferred Share (or shares of such other capital stock)
as were issuable with respect to one Right immediately prior to such event.
Each Common Share that shall become outstanding after an adjustment has been
made pursuant to this Section 11(n) shall have associated with it the number
of Rights, exercisable at the Exercise Price and for the number of
one-thousandths of a Preferred Share (or shares of such other capital stock)
as one Common Share has associated with it immediately following the
adjustment made pursuant to this Section 11(n). If an event occurs which
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. Whenever an adjustment is made as provided in Sections 11 and 13
hereof, the Company shall promptly (a) prepare a certificate setting forth
such adjustment and a brief statement of the facts accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for
the Preferred Shares a copy of such certificate and (c) mail a brief summary
thereof to each holder of a Rights Certificate in accordance with Section 26
hereof. Notwithstanding the foregoing sentence, the failure of the Company to
make such certification or give such notice shall not affect the validity of
such adjustment or the force or effect of the requirement for such
adjustment. The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment contained therein and shall not be deemed
to have knowledge of such adjustment unless and until it shall have received
such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, following a Triggering Event,
directly or indirectly:
(i) the Company shall consolidate with, or merge
with and into, any other Person (other than a wholly-owned Subsidiary of the
Company in a transaction the principal purpose of which is to change the
state of incorporation of the Company and which complies with Section 11(m)
hereof);
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(ii) any Person shall consolidate with the Company,
or merge with and into the Company and the Company shall be the continuing or
surviving corporation of such consolidation or merger and, in connection with
such merger, all or part of the Common Shares shall be changed into or
exchanged for stock or other securities of any other person (or the Company);
or
(iii) the Company shall sell or otherwise transfer
(or one or more of its Subsidiaries shall sell or otherwise transfer), in one
or more transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company or one or more
of its wholly owned Subsidiaries in one or more transactions, each of which
individually (and together) complies with Section 11(m) hereof),
then, concurrent with and in each such case,
(A) each holder of a Right (except as
provided in Section 7(e) hereof) shall thereafter have the right to receive,
upon the exercise thereof at a price equal to the Total Exercise Price
applicable immediately prior to the occurrence of the Section 13 Event in
accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable and freely tradable Common
Shares of the Principal Party (as hereinafter defined), free of any liens,
encumbrances, rights of first refusal or other adverse claims, as shall be
equal to the result obtained by dividing such Total Exercise Price by an
amount equal to fifty percent (50%) of the Current Per Share Market Price of
the Common Shares of such Principal Party on the date of consummation of such
Section 13 Event, PROVIDED, HOWEVER, that the Exercise Price and the number
of Common Shares of such Principal Party so receivable upon exercise of a
Right shall be subject to further adjustment as appropriate in accordance
with Section 11(e) hereof;
(B) such Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Section 13 Event, all the
obligations and duties of the Company pursuant to this Agreement;
(C) the term "Company" shall thereafter be
deemed to refer to such Principal Party, it being specifically intended that
the provisions of Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Section 13 Event;
(D) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number
of its Common Shares) in connection with the consummation of any such
transaction as may be necessary to ensure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to its
Common Shares thereafter deliverable upon the exercise of the Rights; and
(E) upon the subsequent occurrence of any
consolidation, merger, sale or transfer of assets or other extraordinary
transaction in respect of such Principal Party, each holder of a Right shall
thereupon be entitled to receive, upon exercise of a Right and payment of the
Total Exercise Price as provided in this Section 13(a), such cash, shares,
rights, warrants and other property which such holder would have been
entitled to receive had such holder, at the time of such
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transaction, owned the Common Shares of the Principal Party receivable upon
the exercise of such Right pursuant to this Section 13(a), and such Principal
Party shall take such steps (including, but not limited to, reservation of
shares of stock) as may be necessary to permit the subsequent exercise of the
Rights in accordance with the terms hereof for such cash, shares, rights,
warrants and other property.
(F) For purposes hereof, the "earning power"
of the Company and its Subsidiaries shall be determined in good faith by the
Company's Board of Directors on the basis of the operating income of each
business operated by the Company and its Subsidiaries during the three fiscal
years preceding the date of such determination (or, in the case of any
business not operated by the Company or any Subsidiary during three full
fiscal years preceding such date, during the period such business was
operated by the Company or any Subsidiary).
(b) For purposes of this Agreement, the term "PRINCIPAL
PARTY" shall mean:
(i) in the case of any transaction described in
clause (i) or (ii) of Section 13(a) hereof: (A) the Person that is the issuer
of the securities into which the Common Shares are converted in such merger
or consolidation, or, if there is more than one such issuer, the issuer the
Common Shares of which have the greatest aggregate market value of shares
outstanding, or (B) if no securities are so issued, (x) the Person that is
the other party to the merger, if such Person survives said merger, or, if
there is more than one such Person, the Person the Common Shares of which
have the greatest aggregate market value of shares outstanding or (y) if the
Person that is the other party to the merger does not survive the merger, the
Person that does survive the merger (including the Company if it survives) or
(z) the Person resulting from the consolidation; and
(ii) in the case of any transaction described in
clause (iii) of Section 13(a) hereof, the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant to
such transaction or transactions, or, if more than one Person that is a party
to such transaction or transactions receives the same portion of the assets
or earning power so transferred and each such portion would, were it not for
the other equal portions, constitute the greatest portion of the assets or
earning power so transferred, or if the Person receiving the greatest portion
of the assets or earning power cannot be determined, whichever of such
Persons is the issuer of Common Shares having the greatest aggregate market
value of shares outstanding; PROVIDED, HOWEVER, that in any such case
described in the foregoing clause (b)(i) or (b)(ii), if the Common Shares of
such Person are not at such time or have not been continuously over the
preceding 12-month period registered under Section 12 of the Exchange Act,
then (1) if such Person is a direct or indirect Subsidiary of another Person
the Common Shares of which are and have been so registered, the term
"Principal Party" shall refer to such other Person, or (2) if such Person is
a Subsidiary, directly or indirectly, of more than one Person, the Common
Shares of which are and have been so registered, the term "Principal Party"
shall refer to whichever of such Persons is the issuer of Common Shares
having the greatest aggregate market value of shares outstanding, or (3) if
such Person is owned, directly or indirectly, by a joint venture formed by
two or more Persons that are not owned, directly or indirectly by the same
Person, the rules set forth in clauses (1) and (2) above shall apply to each
of the owners having an interest in the venture as if the Person owned by the
joint
-23-
venture was a Subsidiary of both or all of such joint ventures, and the
Principal Party in each such case shall bear the obligations set forth in
this Section 13 in the same ration as its interest in such Person bears to
the total of such interests.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of authorized
Common Shares that have not been issued or reserved for issuance to permit
the exercise in full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such issuer shall have executed and
delivered to the Rights Agent a supplemental agreement confirming that such
Principal Party shall, upon consummation of such Section 13 Event, assume
this Agreement in accordance with Sections 13(a) and 13(b) hereof, that all
rights of first refusal or preemptive rights in respect of the issuance of
Common Shares of such Principal Party upon exercise of outstanding Rights
have been waived, that there are no rights, warrants, instruments or
securities outstanding or any agreements or arrangements which, as a result
of the consummation of such transaction, would eliminate or substantially
diminish the benefits intended to be afforded by the Rights and that such
transaction shall not result in a default by such Principal Party under this
Agreement, and further providing that, as soon as practicable after the date
of such Section 13 Event, such Principal Party will:
(i) prepare and file a registration statement
under the Securities Act with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing and 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 applicable state securities laws;
(ii) use its best efforts to list (or continue
the listing of) the Rights and the securities purchasable upon exercise of
the Rights on a national securities exchange or to meet the eligibility
requirements for quotation on Nasdaq and list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the Rights on
Nasdaq; and
(iii) deliver to holders of the Rights historical
financial statements for such Principal Party which comply in all respects
with the requirements for registration on Form 10 (or any successor form)
under the Exchange Act.
In the event that at any time after the occurrence of a Triggering
Event some or all of the Rights shall not have been exercised at the time of
a transaction described in this Section 13, the Rights which have not
theretofore been exercised shall thereafter be exercisable in the manner
described in Section 13(a) (without taking into account any prior adjustment
required by Section 11(a)(ii)).
(d) In case the "Principal Party" for purposes of Section
13(b) hereof has provision in any of its authorized securities or in its
certificate of incorporation or by-laws or other instrument governing its
corporate affairs, which provision would have the effect of (i) causing such
Principal Party to issue (other than to holders of Rights pursuant to Section
13 hereof), in connection with, or as a consequence of, the consummation of a
Section 13 Event, Common Shares or
-24-
Equivalent Shares of such Principal Party at less than the then Current Per
Share Market Price thereof or securities exercisable for, or convertible
into, Common Shares or Equivalent Shares of such Principal Party at less than
such then Current Per Share Market Price, or (ii) providing for any special
payment, tax or similar provision in connection with the issuance of the
Common Shares of such Principal Party pursuant to the provisions of Section
13 hereof, then, in such event, the Company hereby agrees with each holder of
Rights that it shall not consummate any such transaction unless prior thereto
the Company and such Principal Party shall have executed and delivered to the
Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been canceled, waived or amended,
or that the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with or as a consequence of, the
consummation of the proposed transaction.
(e) The Company covenants and agrees that it shall not,
at any time after the Distribution Date, effect or permit to occur any
Section 13 Event, if (i) at the time or immediately after such Section 13
Event there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights, (ii)
prior to, simultaneously with or immediately after such Section 13 Event, the
stockholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(b) hereof shall have received a
distribution of Rights previously owned by such Person or any of its
Affiliates or Associates or (iii) the form or nature of organization of the
Principal Party would preclude or limit the exercisability of the Rights.
(f) The provisions of this Section 13 shall similarly
apply to successive mergers or consolidations or sales or other transfers.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Rights Certificates which evidence fractional Rights.
In lieu of such fractional Rights, there shall be paid to the registered
holders of the Rights Certificates with regard to which such fractional
Rights would otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of a whole Right. For the purposes of
this Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the date
on which such fractional Rights would have been otherwise issuable, as
determined pursuant to the second sentence of Section 1(j) hereof.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions that are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of the Rights or to
distribute certificates which evidence fractional Preferred Shares (other
than fractions that are integral multiples of one one-thousandth of a
Preferred Share). Interests in fractions of Preferred Shares in integral
multiples of one one-thousandth of a Preferred Share may, at the election of
the Company, be evidenced by depositary receipts, pursuant to an appropriate
agreement between the Company and a depositary selected by it; PROVIDED, 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 the Preferred Shares represented by
-25-
such depositary receipts. In lieu of fractional Preferred Shares that are not
integral multiples of one one-thousandth of a Preferred Share, the Company
shall pay to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of a Preferred Share. For purposes of
this Section 14(b), the current market value of a Preferred Share shall be
the product equal to (x) one thousandth multiplied by (y) the closing price
of a Common Share (as determined pursuant to the second sentence of Section
1(j) hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares upon the exercise or exchange of Rights. In lieu of such fractional
Common Shares, the Company shall pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of a
Common Share. For purposes of this Section 14(c), the current market value of
a Common Share shall be the closing price of a Common Share (as determined
pursuant to the second sentence of Section 1(j) hereof) for the Trading Day
immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Right
expressly waives his or her right to receive any fractional Rights or any
fractional shares (other than fractions that are integral multiples of one
one-thousandth of a Preferred Share) upon exercise of a Right.
Section 15. RIGHTS OF ACTION. All rights of action in respect of
this Agreement, excepting the rights of action given to the Rights Agent
pursuant to Section 18 hereof, are vested in the respective registered
holders of the Rights Certificates (and, prior to the Distribution Date, the
registered holders of the Common Shares); and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, of the Common
Shares), without the consent of the Rights Agent or of the holder of any
other Rights Certificate (or, prior to the Distribution Date, of the Common
Shares), may, in his or her own behalf and for his or her own benefit,
enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his or her
right to exercise the Rights evidenced by such Rights Certificate in the
manner provided in such Rights Certificate and in this Agreement. Without
limiting the foregoing or any remedies available to the holders of Rights, it
is specifically acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will be entitled
to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of, the obligations of any Person
subject to this Agreement.
Section 16. AGREEMENT OF RIGHTS HOLDERS. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the Rights
Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Rights Certificates
are transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights
-26-
Agent designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates fully
executed; and
(c) subject to Sections 6(a) and 7(f) hereof, the Company
and the Rights Agent may deem and treat the person in whose name the Rights
Certificate (or, prior to the Distribution Date, the associated Common Shares
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on
the Rights Certificates or the associated Common Shares certificate made by
anyone other than the Company or the Rights Agent) for all purposes
whatsoever, and neither the Company nor the Rights Agent shall be affected by
any notice to the contrary.
Section 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose to be the holder of the Preferred
Shares or any other securities of the Company which may at any time be
issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors
or upon any matter submitted to stockholders at any meeting thereof, or to
give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as specifically
provided in Section 25 hereof), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and
counsel fees and other disbursements incurred in the administration and
execution of this Agreement and the exercise and performance of its duties
hereunder. The Company also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with
the acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability in the premises. In no
event will the Rights Agent be liable for special, indirect, incidental or
consequential loss or damage of any kind whatsoever, even if the Rights Agent
has been advised of the possibility of such loss or damage.
(b) The Rights Agent shall be protected and shall incur no
liability for, or in respect of any action taken, suffered or omitted by it
in connection with, its administration of this Agreement in reliance upon any
Rights Certificate or 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 reasonably
believed by it to be genuine and to be signed, executed and, where necessary,
verified or acknowledged, by the proper Person or Persons, or otherwise upon
the advice of counsel as set forth in Section 20 hereof.
-27-
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 business of the Rights Agent or
any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further
act on the part of any of the parties hereto; PROVIDED, HOWEVER, that such
corporation would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any of
the Rights 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 Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent or in the
name of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent shall
be changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates shall
not have been countersigned, the Rights Agent may countersign such Rights
Certificates either in its prior name or in its changed name; and in all such
cases such Rights Certificates shall have the full force provided in the
Rights Certificates and in this Agreement.
Section 20. DUTIES OF RIGHTS AGENT. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with such
opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact
or matter (including, without limitation, the identity of any Acquiring
Person and the determination of Current Per Share Market Price) be proved or
established by the Company prior to taking or suffering any action hereunder,
such fact or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by any one of the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President, the Chief
Financial Officer, 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.
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(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 Rights Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are and
shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility
in respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights or any adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Sections 3,
11, 13, 23 or 24, or the ascertaining of the existence of facts that would
require any such change or adjustment (except with respect to the exercise of
Rights evidenced by Rights Certificates after receipt by the Rights Agent of
a certificate furnished pursuant to Section 12 describing such change or
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
Preferred Shares to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any Preferred Shares will, when issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
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 Chief Financial Officer, 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 by it in good faith in accordance
with instructions of any such officer or for any delay in acting while
waiting for those instructions. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action proposed to be taken or omitted by the Rights
Agent under this Rights Agreement and the date on and/or after which such
action shall be taken or such omission shall be effective. The Rights Agent
shall not be liable for any action taken by, or omission of, the Rights Agent
in accordance with a proposal included in any such application on or after
the date specified in such application (which date shall not be less than
five (5) Business Days after the date on which any officer of the Company
actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the Rights Agent
shall have
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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 Rights Agent under this Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any
other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder either
itself or by or through its attorneys or agents, and the Rights Agent shall
not be answerable or accountable for any act, default, neglect or misconduct
of any such attorneys or agents or for any loss to the Company resulting from
any such act, default, neglect or misconduct, provided reasonable care was
exercised in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such risk or
liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate attached to the
form of assignment or form of election to purchase, as the case may be, has
either not been completed or indicates an affirmative response to clause 1
and/or 2 thereof, the Rights Agent shall not take any further action with
respect to such requested exercise or transfer without first consulting with
the Company.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon thirty (30) days' notice in writing mailed to the Company
and to each transfer agent of the Preferred Shares and the Common Shares by
registered or certified mail, and to the holders of the Rights Certificates
by first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon thirty (30) days' notice in writing, mailed to the Rights
Agent or successor Rights Agent, as the case may be, and to each transfer
agent of the Preferred Shares and the Common Shares by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. If the Rights Agent shall resign or be removed or shall otherwise
become incapable of acting, the Company shall appoint a successor to the
Rights Agent. If the Company shall fail to make such appointment within a
period of thirty (30) days after giving notice of such removal or after it
has been notified in writing of such resignation or incapacity by the
resigning or incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his or her Rights
Certificate for inspection by the Company), then the registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether
appointed by the Company or by such a court, shall be a corporation organized
and doing business under the laws of
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the United States or of any state of the United States, in good standing,
which is authorized under such laws to exercise corporate trust or
stockholder services powers and is subject to supervision or examination by
federal or state authority and which has at the time of its appointment as
Rights Agent a combined capital and surplus of at least $100 million. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice thereof
in writing with the predecessor Rights Agent and each transfer agent of the
Preferred Shares and the Common Shares, and mail a notice thereof in writing
to the registered holders of the Rights 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 RIGHTS CERTIFICATES. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Rights Certificates evidencing Rights
in such form as may be approved by its Board of Directors 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 under the Rights
Certificates made in accordance with the provisions of this Agreement. In
addition, in connection with the issuance or sale of Common Shares following
the Distribution Date and prior to the redemption or expiration of the
Rights, the Company (a) shall, with respect to Common Shares so issued or
sold pursuant to the exercise of stock options or under any employee plan or
arrangement or upon the exercise, conversion or exchange of other securities
of the Company outstanding at the date hereof or upon the exercise,
conversion or exchange of securities hereinafter issued by the Company and
(b) may, in any other case, if deemed necessary or appropriate by the Board
of Directors of the Company, issue Rights Certificates representing the
appropriate number of Rights in connection with such issuance or sale;
PROVIDED, HOWEVER, that (i) no such Rights Certificate shall be issued and
this sentence shall be null and void AB INITIO if, and to the extent that,
such issuance or this sentence would create a significant risk of or result
in material adverse tax consequences to the Company or the Person to whom
such Rights Certificate would be issued or would create a significant risk of
or result in such options' or employee plans' or arrangements' failing to
qualify for otherwise available special tax treatment and (ii) no such Rights
Certificate shall be issued if, and to the extent that, appropriate
adjustment shall otherwise have been made in lieu of the issuance thereof.
Section 23. REDEMPTION.
(a) The Company may, at its option and with the approval of
the Board of Directors, at any time prior to the Close of Business on the
earlier of (i) the fifth day following the Shares Acquisition Date (or such
later date as may be determined by action of the Company's Board of Directors
and publicly announced by the Company) and (ii) the Final Expiration Date,
redeem all but not less than all the then outstanding Rights at a redemption
price of $0.01 per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after
-31-
the date hereof (such redemption price being herein referred to as the
"REDEMPTION PRICE") and the Company may, at its option, pay the Redemption
Price either in Common Shares (based on the Current Per Share Market Price
thereof at the time of redemption) or cash. Such redemption of the Rights by
the Company may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
The date on which the Board of Directors elects to make the redemption
effective shall be referred to as the "REDEMPTION DATE."
(b) Immediately upon the action of the Board of Directors
of the Company ordering the redemption of the Rights, evidence of which shall
have been filed with the Rights Agent, and without any further action and
without any notice, the right to exercise the Rights will terminate and the
only right thereafter of the holders of Rights shall be to receive the
Redemption Price. The Company shall promptly give public notice of any such
redemption; PROVIDED, HOWEVER, that the failure to give, or any defect in,
any such notice shall not affect the validity of such redemption. Within ten
(10) days after the action of the Board of Directors ordering the redemption
of the Rights, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such notice
to all such holders at their last addresses as they appear upon the registry
books of the Rights Agent or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Shares. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of redemption will state the
method by which the payment of the Redemption Price will be made. Neither the
Company nor any of its Affiliates or Associates may redeem, acquire or
purchase for value any Rights at any time in any manner other than that
specifically set forth in this Section 23 or in Section 24 hereof, and other
than in connection with the purchase of Common Shares prior to the
Distribution Date.
Section 24. EXCHANGE.
(a) Subject to applicable laws, rules and regulations, and
subject to subsection 24(c) below, the Company may, at its option, by action
of the Board of Directors, at any time after the occurrence of a Triggering
Event, exchange all or part of the then outstanding and exercisable Rights
(which shall not include Rights that have become void pursuant to the
provisions of Section 7(e) hereof) for Common Shares at an exchange ratio of
one Common Share per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the "EXCHANGE RATIO").
Notwithstanding the foregoing, the Board of Directors shall not be empowered
to effect such exchange at any time after any Person (other than the Company,
any Subsidiary of the Company, any employee benefit plan of the Company or
any such Subsidiary, or any entity holding Common Shares for or pursuant to
the terms of any such plan), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the Common Shares
then outstanding.
(b) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to subsection 24(a) of this
Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
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holder of such Rights shall be to receive that number of Common Shares equal
to the number of such Rights held by such holder multiplied by the Exchange
Ratio. The Company shall give public notice of any such exchange; PROVIDED,
HOWEVER, that the failure to give, or any defect in, such notice shall not
affect the validity of such exchange. The Company shall mail a notice of any
such exchange to all of the holders of such Rights at their last addresses as
they appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the Common Shares for Rights will be effected
and, in the event of any partial exchange, the number of Rights which will be
exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void pursuant to the
provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common
Shares issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with Section 24(a), the
Company shall either take such action as may be necessary to authorize
additional Common Shares for issuance upon exchange of the Rights or
alternatively, at the option of a majority of the Board of Directors, with
respect to each Right (i) pay cash in an amount equal to the Current Value
(as hereinafter defined), in lieu of issuing Common Shares in exchange
therefor, or (ii) issue debt or equity securities or a combination thereof,
having a value equal to the Current Value, in lieu of issuing Common Shares
in exchange for each such Right, where the value of such securities shall be
determined by a nationally recognized investment banking firm selected by
majority vote of the Board of Directors, or (iii) deliver any combination of
cash, property, Common Shares and/or other securities having a value equal to
the Current Value in exchange for each Right. For purposes of this Section
24(c) only, the Current Value shall mean the product of the Current Per Share
Market Price of Common Shares on the date of the occurrence of the event
described above in subparagraph (a), multiplied by the number of Common
Shares for which the Right otherwise would be exchangeable if there were
sufficient shares available. To the extent that the Company determines that
some action need be taken pursuant to clauses (i), (ii) or (iii) of this
Section 24(c), the Board of Directors may temporarily suspend the
exercisability of the Rights for a period of up to sixty (60) days following
the date on which the event described in Section 24(a) shall have occurred,
in order to seek any authorization of additional Common Shares and/or to
decide the appropriate form of distribution to be made pursuant to the above
provision and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended.
(d) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, there shall be paid to the
registered holders of the Rights Certificates with regard to which such
fractional Common Shares would otherwise be issuable, an amount in cash equal
to the same fraction of the current market value of a whole Common Share (as
determined pursuant to the second sentence of Section 1(j) hereof).
(e) The Company may, at its option, by majority vote of the
Board of Directors, at any time before any Person has become an Acquiring
Person, exchange all or part of the then
-33-
outstanding Rights for rights of substantially equivalent value, as
determined reasonably and with good faith by the Board of Directors based
upon the advice of one or more nationally recognized investment banking firms.
(f) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to subsection 24(e) of this
Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a
holder of such Rights shall be to receive that number of rights in exchange
therefor as has been determined by the Board of Directors in accordance with
subsection 24(e) above. The Company shall give public notice of any such
exchange; PROVIDED, HOWEVER, that the failure to give, or any defect in, such
notice shall not affect the validity of such exchange. The Company shall mail
a notice of any such exchange to all of the holders of such Rights at their
last addresses as they appear upon the registry books of the transfer agent
for the Common Shares of the Company. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by
which the exchange of the Rights will be effected.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose to effect or permit
to occur any Triggering Event or Section 13 Event, the Company shall give
notice thereof to each holder of Rights in accordance with Section 26 hereof
at least twenty (20) days prior to occurrence of such Triggering Event or
such Section 13 Event.
(b) In case any Triggering Event or Section 13 Event shall
occur, then, in any such case, the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, in accordance with
Section 26 hereof, a notice of the occurrence of such event, which shall
specify the event and the consequences of the event to holders of Rights
under Sections 11(a)(ii) 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
Rights Certificate to or on the Company shall be sufficiently given or made
if sent by first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Rights Agent) as follows:
MIPS Technologies, Inc.
0000 Xxxxxxxxxx Xxxx
Xxxxxxxx Xxxx, XX 00000-0000
Attention: Chief Executive Officer
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with a copy to:
Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
Professional Corporation
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, Xxxxxxxxxx 00000-0000
Attention: Xxxxxx X. X'Xxxxx, Esq.
Xxxxx X. Xxxxxx, Esq.
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 Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
Fleet National Bank
c/o EquiServe Limited Partnership
000 Xxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Client Administration
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the
registry books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. Prior to the occurrence of
a Distribution Date, the Company may supplement or amend this Agreement in
any respect without the approval of any holders of Rights and the Rights
Agent shall, if the Company so directs, execute such supplement or amendment.
From and after the occurrence of a Distribution Date, the Company and the
Rights Agent may from time to time supplement or amend this Agreement without
the approval of any holders of Rights in order to (i) cure any ambiguity,
(ii) correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, (iii) shorten or
lengthen any time period hereunder or (iv) to change or supplement the
provisions hereunder in any manner that the Company may deem necessary or
desirable and that shall not adversely affect the interests of the holders of
Rights (other than an Acquiring Person or an Affiliate or Associate of an
Acquiring Person); PROVIDED, this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time
period relating to when the Rights may be redeemed at such time as the Rights
are not then redeemable or (B) any other time period unless such lengthening
is for the purpose of protecting, enhancing or clarifying the rights of,
and/or the benefits to, the holders of Rights (other than an Acquiring Person
or an Affiliate or Associate of an Acquiring Person). Upon the delivery of a
certificate from an appropriate officer of the Company that states that the
proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment.
Prior to the Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common Shares.
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Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS,
ETC. For all purposes of this Agreement, any calculation of the number of
Common Shares outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding Common Shares of
which any Person is the Beneficial Owner, shall be made in accordance with
the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and Regulations
under the Exchange Act. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise
all rights and powers specifically granted to the Board, or the Company, or
as may be necessary or advisable in the administration of this Agreement,
including, without limitation, the right and power (i) to interpret the
provisions of this Agreement and (ii) to make all determinations deemed
necessary or advisable for the administration of this Agreement (including a
determination to redeem or not redeem the Rights or to amend the Agreement).
All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to
the foregoing) which are done or made by the Board in good faith, shall (x)
be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights Certificates and all other parties and (y) not subject
the Board or the Continuing Directors to any liability to the holders of the
Rights.
Section 30. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Rights Certificates (and, prior to
the Distribution Date, the Common Shares) any legal or equitable right,
remedy or claim pursuant to this Agreement; but this Agreement shall be for
the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, the Common Shares).
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated; PROVIDED, HOWEVER, that notwithstanding anything in this
Agreement to the contrary, if any such term, provision, covenant or
restriction is held by such court or authority to be invalid, void or
unenforceable and the Board of Directors of the Company determines in its
good faith judgment that severing the invalid language from this Agreement
would adversely affect the purpose or effect of this Agreement, the right of
redemption set forth in Section 23 hereof shall be reinstated and shall not
expire until the Close of Business on the tenth day following the date of
such determination by the Board of Directors.
Section 32. GOVERNING LAW. This Agreement and each Right and each
Rights Certificate issued hereunder shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts to be made and performed entirely within such State.
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Section 33. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together
constitute but one and the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.
"COMPANY" MIPS TECHNOLOGIES, INC.
By: /s/ XXXX X. XXXXXXXX
---------------------------------------------
Name: XXXX X. XXXXXXXX
--------------------------------------------
Title: Chief Executive Officer and Chairman
-------------------------------------------
"RIGHTS AGENT" FLEET NATIONAL BANK, as Rights Agent
By: /s/ XXXXXX X. XxXXXX
---------------------------------------------
Name: XXXXXX X. XxXXXX
--------------------------------------------
Title: Senior Account Manager
-------------------------------------------
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EXHIBIT A
CERTIFICATE OF DESIGNATION OF RIGHTS, PREFERENCES
AND PRIVILEGES OF
SERIES A PARTICIPATING PREFERRED STOCK
OF MIPS TECHNOLOGIES, INC.
The undersigned, Xxxx X. Xxxxxxxx and Xxxxx Xxxxxxxxx do hereby
certify:
1. That they are the duly elected and acting President and
Secretary, respectively, of MIPS Technologies, Inc., a Delaware corporation
(the "CORPORATION").
2. That pursuant to the authority conferred upon the Board of
Directors by the Restated Certificate of Incorporation of the said
Corporation, the said Board of Directors on June 2, 2000 adopted the
following resolution creating a series of 100,000 shares of Preferred Stock
designated as Series A Participating Preferred Stock:
"RESOLVED, that pursuant to the authority vested in the Board of
Directors of the corporation by the Restated Certificate of Incorporation,
the Board of Directors does hereby provide for the issue of a series of
Preferred Stock of the Corporation and does hereby fix and herein state and
express the designations, powers, preferences and relative and other special
rights and the qualifications, limitations and restrictions of such series of
Preferred Stock as follows:
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall
be designated as "SERIES A PARTICIPATING PREFERRED STOCK." The Series A
Participating Preferred Stock shall have a par value of $0.001 per share, and
the number of shares constituting such series shall be 100,000.
Section 2. PROPORTIONAL ADJUSTMENT. In the event that the
Corporation shall at any time after the issuance of any share or shares of
Series A Participating Preferred Stock (i) declare any dividend on Common
Stock of the Corporation ("COMMON STOCK") payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such case the
Corporation shall simultaneously effect a proportional adjustment to the
number of outstanding shares of Series A Participating Preferred Stock.
Section 3. DIVIDENDS AND DISTRIBUTIONS.
(a) Subject to the prior and superior right of the holders
of any shares of any series of Preferred Stock ranking prior and superior to
the shares of Series A Participating Preferred Stock with respect to
dividends, the holders of shares of Series A Participating Preferred Stock
shall be entitled to receive when, as and if declared by the Board of
Directors out of funds legally available for the purpose, quarterly dividends
payable in cash on the last day of February, May, August and November 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
Participating Preferred Stock, in an amount per share (rounded to the nearest
cent) equal to 1,000 times the aggregate per share amount of all cash
dividends, and 1,000 times the aggregate per share amount (payable in kind)
of all non-cash dividends or other distributions other than a dividend
payable in shares of Common Stock or a subdivision of the outstanding shares
of Common Stock (by reclassification or otherwise), declared on the Common
Stock 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 Participating
Preferred Stock.
(b) The Corporation shall declare a dividend or
distribution on the Series A Participating Preferred Stock as provided in
paragraph (a) above immediately after it declares a dividend or distribution
on the Common Stock (other than a dividend payable in shares of Common Stock).
(c) Dividends shall begin to accrue on outstanding shares
of Series A Participating Preferred Stock from the Quarterly Dividend Payment
Date next preceding the date of issue of such shares of Series A
Participating Preferred Stock, unless the date of issue of such shares is
prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a Quarterly Dividend
Payment Date or is a date after the record date for the determination of
holders of shares of Series A Participating Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date,
in either of which events such dividends shall begin to accrue from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series A Participating 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 Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 30 days prior to the date fixed for the payment thereof.
Section 4. VOTING RIGHTS. The holders of shares of Series A
Participating Preferred Stock shall have the following voting rights:
(a) Each share of Series A Participating Preferred Stock
shall entitle the holder thereof to 1,000 votes on all matters submitted to a
vote of the stockholders of the Corporation.
(b) Except as otherwise provided herein or by law, the
holders of shares of Series A Participating Preferred Stock and the holders
of shares of Common Stock shall vote together as one class on all matters
submitted to a vote of stockholders of the Corporation.
(c) Except as required by law, the holders of Series A
Participating Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent
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that they are entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 5. CERTAIN RESTRICTIONS.
(a) The Corporation shall not declare any dividend on, make
any distribution on, or redeem or purchase or otherwise acquire for
consideration any shares of Common Stock after the first issuance of a share
or fraction of a share of Series A Participating Preferred Stock unless
concurrently therewith it shall declare a dividend on the Series A
Participating Preferred Stock as required by Section 3 hereof.
(b) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Participating Preferred Stock as
provided in Section 3 are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not declared, on shares of
Series A Participating Preferred Stock outstanding shall have been paid in
full, the Corporation shall not
(i) declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Participating
Preferred Stock;
(ii) declare or pay dividends on, or make any other
distributions on any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Series A
Participating Preferred Stock, except dividends paid ratably on the Series A
Participating Preferred Stock and all such parity stock on which dividends
are payable or in arrears in proportion to the total amounts to which the
holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as to dividends
or upon liquidation, dissolution or winding up) with the Series A
Participating Preferred Stock, provided that the Corporation may at any time
redeem, purchase or otherwise acquire shares of any such parity stock in
exchange for shares of any stock of the Corporation ranking junior (either as
to dividends or upon dissolution, liquidation or winding up) to the Series A
Participating Preferred Stock;
(iv) purchase or otherwise acquire for consideration
any shares of Series A Participating Preferred Stock, or any shares of stock
ranking on a parity with the Series A Participating Preferred Stock, except
in accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(c) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the
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Corporation could, under paragraph (a) of this Section 5, purchase or
otherwise acquire such shares at such time and in such manner.
Section 6. REACQUIRED SHARES. Any shares of Series A Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any
manner whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be reissued as part
of a new series of Preferred Stock to be created by resolution or resolutions
of the Board of Directors, subject to the conditions and restrictions on
issuance set forth herein and in the Restated Certificate of Incorporation,
as then amended.
Section 7. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation, the holders of
shares of Series A Participating Preferred Stock shall be entitled to receive
an aggregate amount per share equal to 1,000 times the aggregate amount to be
distributed per share to holders of shares of Common Stock plus an amount
equal to any accrued and unpaid dividends on such shares of Series A
Participating Preferred Stock.
Section 8. CONSOLIDATION, MERGER, ETC. In case the Corporation
shall enter into any consolidation, merger, combination or other transaction
in which the shares of Common Stock are exchanged for or changed into other
stock or securities, cash and/or any other property, then in any such case
the shares of Series A Participating Preferred Stock shall at the same time
be similarly exchanged or changed in an amount per share equal to 1,000 times
the aggregate amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for which each share of
Common Stock is changed or exchanged.
Section 9. NO REDEMPTION. The shares of Series A Participating
Preferred Stock shall not be redeemable.
Section 10. RANKING. The Series A Participating Preferred Stock
shall rank junior to all other series of the Corporation's Preferred Stock as
to the payment of dividends and the distribution of assets, unless the terms
of any such series shall provide otherwise.
Section 11. AMENDMENT. The Restated Certificate of Incorporation of
the Corporation shall not be further amended in any manner which would
materially alter or change the powers, preference or special rights of the
Series A Participating Preferred Stock so as to affect them adversely without
the affirmative vote of the holders of a majority of the outstanding shares
of Series A Participating Preferred Stock, voting separately as a series.
Section 12. FRACTIONAL SHARES. Series A Participating Preferred
Stock may be issued in fractions of a share which shall entitle the holder,
in proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit of
all other rights of holders of Series A Participating Preferred Stock.
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RESOLVED FURTHER, that the President or any Vice President and the
Secretary or any Assistant Secretary of this corporation be, and they hereby
are, authorized and directed to prepare and file a Certificate of Designation
of Rights, Preferences and Privileges in accordance with the foregoing
resolution and the provisions of Delaware law and to take such actions as
they may deem necessary or appropriate to carry out the intent of the
foregoing resolution."
We further declare under penalty of perjury that the matters set
forth in the foregoing Certificate of Designation are true and correct of our
own knowledge.
Executed at Mountain View, California on ______, 2000.
-------------------------------
President
-------------------------------
Secretary
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EXHIBIT B
FORM OF RIGHTS CERTIFICATE
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER THE EARLIER OF (i) JUNE 19, 2010, (ii) THE DATE
TERMINATED BY THE COMPANY OR (iii) THE DATE THE COMPANY EXCHANGES THE
RIGHTS PURSUANT TO THE RIGHTS AGREEMENT. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON THE
TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES,
RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME
NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE
OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID
IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH RIGHTS
AGREEMENT.]*
RIGHTS CERTIFICATE
MIPS TECHNOLOGIES, INC.
This certifies that ______________________________, or registered
assigns, is the registered owner of the number of Rights set forth above,
each of which entitles the owner thereof, subject to the terms, provisions
and conditions of the Rights Agreement dated as of June 2, 2000, (the "RIGHTS
AGREEMENT"), between MIPS Technologies, Inc., a Delaware corporation (the
"COMPANY"), and Fleet National Bank, a national banking association, as
rights agent (the "RIGHTS AGENT"), to purchase from the Company at any time
after the Distribution Date (as such term is defined in the Rights Agreement)
and prior to 5:00 P.M., New York time, on June 19, 2010 at the office of the
Rights Agent designated for such purpose, or at the office of its successor
as Rights
-------------------------
* The portion of the legend in bracket shall be inserted only if applicable and
shall replace the preceding sentence.
Agent, one one-thousandth (1/1,000) of a fully paid and non-assessable share
of Series A Participating Preferred Stock, par value $0.001 per share (the
"PREFERRED SHARES"), of the Company, at an Exercise Price of Two Hundred
Dollars ($200) per one-thousandth of a Preferred Share (the "EXERCISE
PRICE"), upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase and related Certificate duly executed. The
number of Rights evidenced by this Rights Certificate (and the number of
one-thousandths of a Preferred Share which may be purchased upon exercise
hereof) set forth above are the number and Exercise Price as of June 2, 2000
based on the Preferred Shares as constituted at such date. As provided in the
Rights Agreement, the Exercise Price and the number and kind of Preferred
Shares or other securities which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to modification and
adjustment upon the happening of certain events.
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms, provisions
and conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the temporary
suspension of the exercisability of such Rights under the specific
circumstances set forth in the Rights Agreement. Copies of the Rights
Agreement are on file at the principal executive offices of the Company and
the above-mentioned office of the Rights Agent.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Rights Certificate (i) may be redeemed by the
Company, at its option, at a redemption price of $0.01 per Right or (ii) may
be exchanged by the Company in whole or in part for Common Shares,
substantially equivalent rights or other consideration as determined by the
Company.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate amount of securities as the Rights evidenced by the
Rights Certificate or Rights Certificates surrendered shall have entitled
such holder to purchase. If this Rights Certificate shall be exercised in
part, the holder shall be entitled to receive upon surrender hereof another
Rights Certificate or Rights Certificates for the number of whole Rights not
exercised.
No fractional portion of less than one one-thousandth of a
Preferred Share will be issued upon the exercise of any Right or Rights
evidenced hereby but in lieu thereof a cash payment will be made, as provided
in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any purpose the holder
of the Preferred Shares or of any other securities of the Company which may
at any time be issuable on the exercise hereof, nor shall anything contained
in the Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except
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as provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of _______________, _____.
ATTEST: MIPS TECHNOLOGIES, INC.
By:
--------------------------------- -------------------------------
Secretary
Its:
------------------------------
Countersigned:
FLEET NATIONAL BANK
as Rights Agent
By:
------------------------------
Its:
-----------------------------
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FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate)
FOR VALUE RECEIVED _______________ hereby sells, assigns and transfers unto
--------------------------------------------------------------------------------
(Please print name and address of transferee)
--------------------------------------------------------------------------------
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________________________
Attorney, to transfer the within Rights Certificate on the books of the
within-named Company, with full power of substitution.
Dated: _______________, ____
---------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or was an
Acquiring Person, or an Affiliate or Associate of any such Person (as such
terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of any such Person.
Dated: _______________, ____
____________________________________
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -- CONTINUED
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Rights Certificate)
To:___________________________
The undersigned hereby irrevocably elects to exercise
_________________________ Rights represented by this Rights Certificate to
purchase the number of one-thousandths of a Preferred Share issuable upon the
exercise of such Rights and requests that certificates for such number of
one-thousandths of a Preferred Share issued in the name of:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance remaining of such
Rights shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
(Please print name and address)
--------------------------------------------------------------------------------
Dated: _______________, ____
----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ]
are not being exercised by or on behalf of a Person who is or was an
Acquiring Person or an Affiliate or Associate of any such Person (as such
terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights evidenced by this
Rights Certificate from any Person who is, was or subsequently became an
Acquiring Person or an Affiliate or Associate of any such Person.
Dated: _______________, ____
-----------------------------------
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered
national securities exchange, a member of the National Association of
Securities Dealers, Inc., or a commercial bank or trust company having an
office or correspondent in the United States.
FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE -- CONTINUED
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
EXHIBIT C
STOCKHOLDER RIGHTS PLAN
MIPS TECHNOLOGIES, INC.
SUMMARY OF RIGHTS
DISTRIBUTION AND The Board of Directors has declared a dividend of
TRANSFER OF RIGHTS; one Right for each share of Common Stock of MIPS
RIGHTS CERTIFICATE: Technologies, Inc. (the "COMPANY") outstanding.
Prior to the Distribution Date referred to below,
the Rights will be evidenced by and trade with
the certificates for the Common Stock. After the
Distribution Date, the Company will mail Rights
certificates to the Company's stockholders and
the Rights will become transferable apart from the
Common Stock.
DISTRIBUTION DATE: Rights will separate from the Common Stock and
become exercisable following (a) the tenth day
(or such later date as may be determined by
the Company's Board of Directors) after a person
or group acquires beneficial ownership of (i) 20%
or more of the Class A Common Shares then
outstanding, or (ii) 20% of the Class B Common
Shares then outstanding, or (iii) 15% of the
Company's Common Shares then outstanding (each
such share ownership amount herein referred to
as a "THRESHOLD AMOUNT"), or (b) the tenth
business day (or such later date as may be
determined by the Company's Board of Directors)
after a person or group announces a tender or
exchange offer, the consummation of which would
result in ownership by a person or group of a
Threshold Amount. The Board of Directors may
extend the date on which the Rights become
exercisable.
PREFERRED STOCK After the Distribution Date, each Right will
PURCHASABLE UPON entitle the holder to purchase for $200 (the
EXERCISE OF RIGHTS: "EXERCISE PRICE"), a fraction of a share of
the Company's Preferred Stock with economic
terms similar to that of one share of the
Company's Common Stock.
FLIP-IN: If an acquirer (an "ACQUIRING PERSON") obtains
a Threshold Amount THEN each Right (other than
Rights owned by an Acquiring Person or its
affiliates) will entitle the holder thereof to
purchase, for the Exercise Price, a number of
shares of the Company's Common Stock having a
then-current market value of twice the Exercise
Price.
FLIP-OVER: If, after an Acquiring Person obtains a
Threshold Amount, (a) the Company merges into
another entity, (b) an acquiring entity merges
into the Company or (c) the Company sells more
than 50% of the Company's assets or earning
power, THEN each Right (other than Rights owned
by an Acquiring Person or its affiliates) will
entitle the holder thereof to purchase, for the
Exercise Price, a number of shares of Common
Stock of the person engaging in the transaction
having a then current market value of twice the
Exercise Price.
EXCHANGE PROVISION: At any time after the date on which an Acquiring
Person obtains a Threshold Amount and prior to
the acquisition by the Acquiring Person of 50%
of the outstanding Class A Common Stock or 50%
of the outstanding Class B Common Stock, a
majority of the Board of Directors and the Board
of Directors of the Company may exchange the
Rights (other than Rights owned
by the Acquiring Person or its affiliates), in
whole or in part, for shares of Common Stock of
the Company at an exchange ratio of one share of
Common Stock per Right (subject to adjustment).
REDEMPTION OF THE Rights will be redeemable at the Company's option
RIGHTS: for $0.01 per Right at any time on or prior to
the fifth day (or such later date as may be
determined by the Company's Board of Directors)
after public announcement that a Person has
acquired beneficial ownership of a Threshold
Amount (the "SHARES ACQUISITION DATE").
EXPIRATION OF THE The Rights expire on the earliest of (a) June 19,
RIGHTS: 2010 or (b) exchange or redemption of the Rights
as described above.
AMENDMENT OF TERMS OF The terms of the Rights and the Rights Agreement
RIGHTS: may be amended in any respect without the consent
of the Rights holders on or prior to the
Distribution Date; thereafter, the terms of the
Rights and the Rights Agreement may be amended
without the consent of the Rights holders in
order to cure any ambiguities or to make changes
which do not adversely affect the interests of
Rights holders (other than the Acquiring Person).
VOTING RIGHTS: Rights will not have any voting rights.
ANTI-DILUTION Rights will have the benefit of certain customary
PROVISIONS: anti-dilution provisions.
TAXES: The Rights distribution should not be taxable for
federal income tax purposes. However, following an
event which renders the Rights exercisable or upon
redemption of the Rights, stockholders may
recognize taxable income.
The foregoing is a summary of certain principal terms of the Stockholder
Rights Plan. It may be amended from time to time. A copy of the Rights
Agreement will be filed with the Securities and Exchange Commission as an
Exhibit to a Registration Statement on Form 8-A dated June 9, 2000. A copy
of the Rights Agreement is available free of charge from the Company.
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