Exhibit 4.01
RIGHTS AGREEMENT
BETWEEN
HANDSPRING, INC.
AND
EQUISERVE TRUST COMPANY, N.A.,
AS RIGHTS AGENT
DATED AS OF JUNE 5, 2003
TABLE OF CONTENTS
Page
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Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 4
Section 3. Evidence of Rights Before Distribution Date; Transfer; Legends 5
Section 4. Evidence of Rights After Distribution Date; Form of Right Certificates; 6
Countersignatures
Section 5. Distribution of Certificates; Registration 6
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; 7
Mutilated, Destroyed, Lost or Stolen Right Certificates
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights 7
Section 8. Cancellation and Destruction of Right Certificates 9
Section 9. Status and Availability of Preferred Shares 9
Section 10. Preferred Shares Record Date 10
Section 11. Adjustment of Purchase Price, Number of Shares or Number of Rights 10
Section 12. Certificate of Adjusted Purchase Price or Number of Shares 16
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power 16
Section 14. Fractional Rights and Fractional Shares 17
Section 15. Rights of Action 18
Section 16. Agreement of Right Holders 18
Section 17. Right Certificate Holder Not Deemed a Stockholder 19
Section 18. Compensation and Indemnity of the Rights Agent 19
Section 19. Merger or Consolidation or Change of Name of Rights Agent 20
Section 20. Rights and Duties of Rights Agent 20
Section 21. Change of Rights Agent 23
Page
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Section 22. Issuance of New Right Certificates 23
Section 23. Redemption 24
Section 24. Exchange 24
Section 25. Notice of Certain Events 26
Section 26. Notices 26
Section 27. Supplements and Amendments 27
Section 28. Successors 27
Section 29. Benefits of this Agreement 27
Section 30. Severability 27
Section 31. Governing Law 28
Section 32. Counterparts 28
Section 33. Descriptive Headings 28
Section 34. Entire Agreement 28
Signatures 29
Exhibit A - Form of Certificate of Designations of Series A Junior Participating
Preferred Stock
Exhibit B - Summary of Rights to Purchase Preferred Shares
Exhibit C - Form of Right Certificate
RIGHTS AGREEMENT
This Agreement, dated as of June 5, 2003, between Handspring, Inc., a
Delaware corporation (the "COMPANY"), and EquiServe Trust Company, N.A., a
national banking association having its principal offices in Canton,
Massachusetts, as Rights Agent (the "RIGHTS AGENT").
On June 3, 2003 (the "RIGHTS DIVIDEND DECLARATION DATE"), the Board of
Directors of the Company has authorized and declared a dividend of one preferred
share purchase right (a "RIGHT") for each Common Share (as hereinafter defined)
of the Company outstanding at the Close of Business (as hereinafter defined) on
June 5, 2003 (the "RECORD DATE"), each Right representing the right to purchase
one one-thousandth of a Preferred Share (as hereinafter defined), upon the terms
and subject to the conditions herein set forth, and has further authorized and
directed the issuance of one Right with respect to each Common Share that shall
become outstanding (i) between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date (as such
terms are hereinafter defined) or (ii) following the Distribution Date and prior
to the Redemption Date or Final Expiration Date, 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, which options or
securities were outstanding prior to the Distribution Date.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereto 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 15% (the "DESIGNATED PERCENTAGE") or more of the Common Shares of the Company
then outstanding, but shall not include (i) the Company, (ii) any Subsidiary of
the Company, (iii) any employee benefit plan of the Company or of any Subsidiary
of the Company or (iv) any entity holding Common Shares for or pursuant to the
terms of any such plan. Notwithstanding the foregoing,
(i) No Person shall become an Acquiring Person if the Board of
Directors of the Company determines in good faith that a Person who would
otherwise be an Acquiring Person has become such inadvertently and without any
intention of changing or influencing control of the Company, and such Person as
promptly as practicable divests its Beneficial Ownership in the amount
necessary, and takes such other actions as may be necessary, such that such
Person would no longer be considered an Acquiring Person.
(ii) No Person shall become an Acquiring Person as the result
of an acquisition of Common Shares by the Company that, by reducing the number
of shares outstanding, increases the proportionate number of shares beneficially
owned by such Person and such Person's Affiliates and Associates to the
Designated Percentage or more of the Common Shares of the Company then
outstanding; provided, however, that if a Person, together with such Person's
Affiliates and Associates, shall become the Beneficial Owner of the Designated
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Percentage or more of the Common Shares of the Company then outstanding by
reason of share purchases by the Company and such Person, together with its
Affiliates and Associates, shall, after public announcement of such share
purchases by the Company, become the Beneficial Owner of any additional Common
Shares of the Company, then such Person shall be deemed to be an "Acquiring
Person," unless such person does not Beneficially Own in excess of the
Designated Percentage of the Common Shares of the Company then outstanding.
(iii) Prior to termination of the Merger Agreement (as defined
in Section 1(a)(vii) below), Xxxxxxx X. Xxxxxxx shall not be or become an
Acquiring Person unless and until Xx. Xxxxxxx, together with his Affiliates and
Associates, beneficially owns a number of Common Shares of the Company
(excluding any Common Shares beneficially owned by Xx. Xxxxxxx following
exercise of any stock options granted by the Company to Xx. Xxxxxxx or any other
compensatory stock issuances by the Company to Xx. Xxxxxxx) that exceeds the
number of Common Shares of the Company beneficially owned by Xx. Xxxxxxx, and
his Affiliates and Associates, as of the Rights Dividend Declaration Date;
provided however that, in no event, shall Xx. Xxxxxxx be or become an Acquiring
Person unless the number of Common Shares beneficially owned by Xx. Xxxxxxx,
together with his Affiliates and Associates, is more than the Designated
Percentage of the Common Shares of the Company then outstanding.
(iv) Following termination of the Merger Agreement, Xxxxxxx X.
Xxxxxxx shall not be or become an Acquiring Person unless and until Xx. Xxxxxxx,
together with his Affiliates and Associates, beneficially owns a number of
Common Shares of the Company (excluding any Common Shares beneficially owned by
Xx. Xxxxxxx following exercise of any stock options granted by the Company to
Xx. Xxxxxxx or any other compensatory stock issuances by the Company to Xx.
Xxxxxxx) that exceeds the sum of (A) 5% of the total number of Common Shares of
the Company then outstanding plus (B) the number of Common Shares of the Company
beneficially owned by Xx. Xxxxxxx, and his Affiliates and Associates, as of the
Rights Dividend Declaration Date; provided however that, in no event, shall Xx.
Xxxxxxx be or become an Acquiring Person unless the number of Common Shares
beneficially owned by Xx. Xxxxxxx, together with his Affiliates and Associates,
is more than the Designated Percentage of the Common Shares of the Company then
outstanding.
(v) Prior to termination of the Merger Agreement, Xxxxx X.
Xxxxxxxx shall not be or become an Acquiring Person unless and until Xx.
Xxxxxxxx, together with her Affiliates and Associates, beneficially owns a
number of Common Shares of the Company (excluding any Common Shares beneficially
owned by Xx. Xxxxxxxx following exercise of any stock options granted by the
Company to Xx. Xxxxxxxx or any other compensatory stock issuances by the Company
to Xx. Xxxxxxxx) that exceeds the number of Common Shares of the Company
beneficially owned by Xx. Xxxxxxxx, and her Affiliates and Associates, as of the
Rights Dividend Declaration Date; provided however that, in no event, shall Xx.
Xxxxxxxx be or become an Acquiring Person unless the number of Common Shares
beneficially owned by Ms. Dubinksy, together with her Affiliates and Associates,
is more than the Designated Percentage of the Common Shares of the Company then
outstanding.
(vi) Following termination of the Merger Agreement, Xxxxx X.
Xxxxxxxx shall not be or become an Acquiring Person unless and until Xx.
Xxxxxxxx, together with her Affiliates and Associates, beneficially owns a
number of Common Shares of the Company (excluding any Common Shares beneficially
owned by Xx. Xxxxxxxx following exercise of any
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stock options granted by the Company to Xx. Xxxxxxxx or any other compensatory
stock issuances by the Company to Xx. Xxxxxxxx) that exceeds the sum of (x) 5%
of the total number of Common Shares of the Company then outstanding plus (y)
the number of Common Shares of the Company beneficially owned by Xx. Xxxxxxxx,
and her Affiliates and Associates, as of the Rights Dividend Declaration Date;
provided however that, in no event, shall Xx. Xxxxxxxx be or become an Acquiring
Person unless the number of Common Shares beneficially owned by Ms. Dubinksy,
together with her Affiliates and Associates, is more than the Designated
Percentage of the Common Shares of the Company then outstanding.
(vii) Prior to the termination of that certain Agreement and
Plan of Reorganization among Palm, Inc., a Delaware corporation ("PARENT"), the
Company, Peace Separation Corporation and Harmony Acquisition Corporation dated
as of June 4, 2003 (the "MERGER AGREEMENT") in accordance with its terms,
neither Parent, nor any of its Subsidiaries, Affiliates or Associates, shall be
or become an Acquiring Person. In the event of a termination of the Merger
Agreement, the preceding sentence of this subparagraph (vii) shall automatically
be deemed deleted from this Agreement and of no further force or effect;
provided however that, if, as of the date of termination of the Merger
Agreement, Parent, together with its Affiliates and Associates, beneficially
owns a number of Common Shares that exceeds the Designated Percentage of the
Common Shares of the Company then outstanding, Parent shall not be or become an
Acquiring Person unless and until Parent, together with its Affiliates and
Associates, beneficially owns a number of Common Shares of the Company that
exceeds the number of Common Shares beneficially owned by Parent, and its
Affiliates and Associates, as of the date of termination of the Merger Agreement
(the "PARENT PERCENTAGE"), provided further that for so long as Parent, together
with its Affiliates and Associates, beneficially owns Common Shares in excess of
the Designated Percentage, upon any divestiture by Parent, or its Affiliates
and/or Associates, of beneficial ownership of any Common Shares of the Company,
the Parent Percentage shall be deemed reduced to such percentage of the Common
Shares of the Company as is beneficially owned by Parent, together with its
Affiliates and Associates, immediately following such divestiture such that,
upon any acquisition thereafter of beneficial ownership by Parent, and/or its
Affiliates and Associates, of Common Shares of the Company in excess of such
reduced Parent Percentage, Parent shall become an Acquiring Person.
(b) "AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement.
(c) A Person shall be deemed the "BENEFICIAL OWNER" of and shall be
deemed to "BENEFICIALLY OWN" any securities:
(i) that such Person 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) that such Person 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), written or otherwise, or upon the
exercise of conversion rights, exchange rights, rights (other than the
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Rights), warrants or options, or otherwise; provided, however, that a Person
shall not be deemed to be the Beneficial Owner of, or to beneficially own,
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person until such tendered securities are accepted for purchase or
exchange; or (B) the right to vote pursuant to any agreement, arrangement or
understanding; provided, however, that a Person shall not be deemed the
Beneficial Owner of, or to beneficially own, any security if the agreement,
arrangement or understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the applicable
rules and regulations promulgated under the Exchange Act and (2) is not also
then reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) that are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which such Person
has any agreement, arrangement or understanding (other than customary agreements
with and between underwriters and selling group members with respect to a bona
fide public offering of securities), written or otherwise, for the purpose of
acquiring, holding, voting (except to the extent contemplated by the proviso to
Section 1(c)(ii)(B)) or disposing of any securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership
to the contrary, (A) the phrase "THEN OUTSTANDING," when used with reference to
a Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding that such Person
would be deemed to own beneficially hereunder, and (B) a Person who is a
director or officer of the Company or who is an Affiliate or Associate of a
director or officer of the Company (each, an "EXEMPTED PERSON") shall not be
deemed to "beneficially own" Common Shares held by another Exempted Person
solely by reason of any agreement, arrangement or understanding, written or
otherwise, entered into in opposition to a transaction that, at the time such
agreement, arrangement or understanding was entered into, has not been approved
or recommended by the Board of Directors to the stockholders of the Company.
(d) "BUSINESS DAY" shall mean any day other than a Saturday, a
Sunday or a day on which banking institutions in the State of Massachusetts are
not open for business.
(e) "CLOSE OF BUSINESS" on any given date shall mean 5:00 p.m.,
Eastern Time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 p.m., Eastern Time, on the next succeeding
Business Day.
(f) "COMMON SHARES" when used with reference to the Company shall
mean the shares of common stock, par value $0.001 per share, of the Company.
"Common Shares" when used with reference to any Person other than the Company
shall mean the capital stock (or equity interest) with the greatest voting power
of such other Person or, if such other Person is a Subsidiary of another Person,
of the Person or Persons that ultimately control such first-mentioned Person.
(g) "DESIGNATED PERCENTAGE" shall have the meaning set forth in
Section 1(a) hereof.
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(h) "DISTRIBUTION DATE" shall mean the earlier of (i) the tenth day
after the Shares Acquisition Date (or if the tenth day after the Shares
Acquisition Date occurs before the Record Date, the Record Date) or (ii) the
tenth Business Day (or such later date as may be determined by action of the
Board of Directors of the Company prior to such time as any Person becomes an
Acquiring Person) (or if the tenth Business Day occurs before the Record Date,
the Record Date) after the first public announcement of the intention of any
Person (other than the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such plan) to commence
a tender or exchange offer the consummation of which would result in any such
Person becoming an Acquiring Person (including any such date that is after the
date of this Agreement and prior to the issuance of the Rights).
(i) "EXCHANGE ACT" shall mean the Securities Exchange Act of 1934,
as amended.
(j) "FINAL EXPIRATION DATE" shall have the meaning set forth in
Section 7(a) hereof.
(k) "PERSON" shall mean any individual, firm, corporation,
partnership, limited partnership, business trust, limited liability company,
unincorporated association or any other entity, and shall include any successor
(by merger or otherwise) of such entity.
(l) "PURCHASE PRICE" shall have the meaning set forth in Section
7(b) hereof.
(m) "PREFERRED SHARES" shall mean shares of Series A Junior
Participating Preferred Stock, par value $0.001 per share, of the Company having
the rights and preferences set forth in the Certificate of Designations attached
to this Agreement as Exhibit A.
(n) "REDEMPTION DATE" shall have the meaning set forth in Section
7(a) hereof.
(o) "RIGHTS" shall have the meaning set forth in the second
paragraph of this Agreement, provided, however, that none of the following shall
be deemed "Rights" or "outstanding Rights" for any purpose under this Agreement
from and after the effective time of the event indicated: (i) Rights that have
become Void Rights pursuant to Section 7(f) hereof, and upon such occurrence,
all Right Certificates therefor shall be null and void and shall not be deemed
"outstanding Right Certificates"; (ii) all rights that have been redeemed
pursuant to Section 23 hereof, and upon such occurrence, all Right Certificates
therefor shall represent only the right to receive the consideration provided in
Section 23 hereof and shall not be deemed "outstanding Right Certificates", and
(iii) any Rights that have been exchanged pursuant to Section 24 hereof, and
upon such occurrence, all Right Certificates therefor shall represent only the
right to receive the consideration provided in Section 24 and shall not be
deemed "outstanding Right Certificates".
(p) "SHARES ACQUISITION DATE" shall mean the earlier of the date of
(i) the public announcement (which, for the 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 or (ii) the public disclosure of facts by the Company or an
Acquiring Person indicating that an Acquiring Person has become such.
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(q) "SUBSIDIARY" of any Person shall mean any Person of which a
majority of the voting power of the voting equity securities or equity interest
is owned, directly or indirectly, by such Person.
(r) A "SUCCESSOR" shall mean the estate or legal representative of a
deceased individual, the beneficiary of a deceased individual's estate, a trust
created by a deceased individual as grantor, or the beneficiary of a trust
created by a deceased individual as grantor.
(s) A "TRIGGERING EVENT" shall be deemed to have occurred upon any
Person becoming an Acquiring Person.
(t) "VOID RIGHTS" shall have the meaning set forth in Section 7(f).
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable upon ten days' prior written notice to the Rights Agent.
The Rights Agent shall have no duty to supervise, and shall in no event be
liable for, the acts or omissions of any such co-Rights Agent.
SECTION 3. EVIDENCE OF RIGHTS BEFORE DISTRIBUTION DATE; TRANSFER; LEGENDS.
(a) From the Record Date until the earliest of the Distribution
Date, the Redemption Date or the Final Expiration Date, (x) Rights will be
evidenced by the certificates for Common Shares registered in the names of the
holders thereof (which certificates shall also be deemed to be Right
Certificates) and not by separate Right Certificates (as defined below), and (y)
Rights will be transferable only in connection with the transfer of Common
Shares. On the Record Date, or as soon as reasonably practicable thereafter, the
Company will send a copy of a Summary of Stock Purchase Rights, in substantially
the form of Exhibit B hereto (the "SUMMARY OF RIGHTS"), by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the Close of
Business on the Record Date, at the address of such holder shown on the records
of the Company. Until the earliest of the Distribution Date, the Redemption Date
or the Final Expiration Date, the surrender for transfer of any certificate for
Common Shares outstanding on the Record Date, with or without a copy of the
Summary of Rights attached thereto, shall also constitute the surrender for
transfer of the Rights associated with the Common Shares represented thereby.
(b) Certificates for Common Shares that become outstanding
(including, without limitation, reacquired Common Shares referred to in the last
sentence of this Section 3(b)) after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF TO
CERTAIN RIGHTS (THE "RIGHTS") AS SET FORTH IN A RIGHTS AGREEMENT
BETWEEN HANDSPRING, INC. (THE "COMPANY") AND EQUISERVE TRUST
COMPANY, N.A., AS RIGHTS AGENT, DATED AS OF JUNE 5, 2003, AS SUCH
MAY
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SUBSEQUENTLY BE 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 THE COMPANY. UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, SUCH
RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES AND WILL NO LONGER
BE EVIDENCED BY THIS CERTIFICATE. THE COMPANY WILL MAIL TO THE
HOLDER OF THIS CERTIFICATE A COPY OF THE RIGHTS AGREEMENT WITHOUT
CHARGE AFTER RECEIPT OF A WRITTEN REQUEST THEREFOR. AS DESCRIBED IN
SECTION 7(F) OF THE RIGHTS AGREEMENT, RIGHTS BENEFICIALLY OWNED BY
ANY PERSON WHO BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN OTHER PERSONS SHALL BECOME NULL AND VOID.
In the event that the Company purchases or acquires any Common Shares after the
Record Date but prior to the Distribution Date, any Rights associated with such
Common Shares shall be deemed cancelled and retired so that the Company shall
not be entitled to exercise any Rights associated with the Common Shares that
are no longer outstanding.
SECTION 4. EVIDENCE OF RIGHTS AFTER DISTRIBUTION DATE; FORM OF RIGHT
CERTIFICATES; COUNTERSIGNATURES.
(a) From and after the Distribution Date until the earlier of the
Redemption Date or the Final Expiration Date, Rights will be evidenced solely by
Right Certificates that, together with the forms of election to purchase
Preferred Shares and of assignment to be printed on the reverse thereof, shall
be substantially in the form set forth as Exhibit C hereto (each, a "RIGHT
CERTIFICATE"), which may have such marks of identification or designation and
such legends, summaries or endorsements printed thereon as the Company may deem
appropriate and which do not affect the rights, duties or responsibilities of
the Rights Agent and as are not inconsistent with the provisions of this
Agreement, or as may be required to comply with any applicable law or with any
rule or regulation made pursuant thereto or with any rule or regulation of any
stock exchange on which the Rights may from time to time be listed, or to
conform to usage. Subject to the other provisions of this Agreement, the Right
Certificates shall entitle the holders thereof to purchase such number of one
one-thousandths of a Preferred Share as shall be set forth therein at the
Purchase Price, but the number of such one one-thousandths of a Preferred Share
and the Purchase Price shall be subject to adjustment as provided herein.
(b) The Right Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its Chief Executive Officer, its
President, any of its Vice Presidents, or its Treasurer, either manually or by
facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the Secretary or any Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent (unless
applicable exchange rules and law permit facsimile signature, in which case the
Rights Agent signature may be by facsimile) and shall not be valid for any
purpose unless countersigned. In case any officer of the Company who shall have
signed any of the Right Certificates shall cease to be such officer of the
Company before
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countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent
and issued and delivered by the Company with the same force and effect as though
the individual who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf of the
Company by any individual who, at the actual date of the execution of such Right
Certificate, shall be a proper officer of the Company to sign such Right
Certificate, although at the date of the execution of this Rights Agreement any
such individual was not such an officer.
SECTION 5. DISTRIBUTION OF CERTIFICATES; REGISTRATION.
(a) As soon as practicable after the Distribution Date (and so long
as the Redemption Date and the Final Expiration Date shall not have occurred),
the Company will prepare and execute, the Rights Agent will countersign and the
Company will send or cause to be sent (and the Rights Agent will, if requested
and provided with all necessary information, send) by first-class, insured,
postage-prepaid mail to each record holder of Common Shares as of the Close of
Business on the Distribution Date (other than the holder of Void Rights (as
defined in Section 7(f) hereof), at the address of such holder shown on the
records of the Company, Rights Certificates evidencing one Right for each Common
Share so held.
(b) Following the Distribution Date and receipt by the Rights Agent
of all relevant information, the Rights Agent will keep or cause to be kept, at
its office, books for registration and transfer of the Right Certificates issued
hereunder. Such books shall show the names and addresses of the respective
holders of the Right Certificates, the number of Rights evidenced on its face by
each of the Right Certificates and the date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Section 14 hereof, at any time
after the Close of Business on the Distribution Date, and at or prior to the
Close of Business on the earlier of the Redemption Date or the Final Expiration
Date, any Right Certificate or Right Certificates (other than Right Certificates
representing Void Rights or Rights that have been exchanged pursuant to Section
24 hereof) may be transferred, split up, combined or exchanged for another Right
Certificate or Right Certificates, entitling the registered holder to purchase a
like number of one one-thousandths of a Preferred Share as the Right Certificate
or Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the office of
the Rights Agent. Thereupon the Company shall execute and the Rights Agent shall
countersign and deliver to the Person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may require
payment of a sum sufficient for all taxes and governmental charges that may be
imposed in connection with any transfer, split up, combination or exchange of
Right Certificates. The Rights Agent shall have no duty or obligation under this
Section 6 unless and until it is satisfied that all such taxes and/or charges
have been paid.
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(b) Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, at the Company's request, reimbursement to the Company
and the Rights Agent of all reasonable expenses incidental thereto, and, (i) in
case of loss, theft or destruction, of indemnity or security satisfactory to
them, or (ii) in the case of mutilation, upon surrender to the Rights Agent and
cancellation of the Right Certificate, then, in either such case, the Company
will make and deliver a new Right Certificate of like tenor to the Rights Agent
for delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION DATE; VOID
RIGHTS.
(a) Subject to Section 7(f) hereof, the registered holder of any
Right Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the Distribution Date
upon surrender of the Right Certificate, with the form of election to purchase
on the reverse side thereof duly executed, to the Rights Agent at the office of
the Rights Agent, together with payment of the Purchase Price for each one
one-thousandth of a Preferred Share as to which the Rights are exercised and
payment of all transfer taxes and governmental charges required to be paid by
the holder of such Right Certificate as provided in Section 9 hereof, at or
prior to the earliest of (i) the Close of Business on June 5, 2013 (the "FINAL
EXPIRATION DATE"), (ii) the time at which the Rights are redeemed as provided in
Section 23 hereof (the "REDEMPTION DATE"), or (iii) the time at which such
Rights are exchanged as provided in Section 24 hereof.
(b) The purchase price for each one one-thousandth of a Preferred
Share pursuant to the exercise of a Right (the "PURCHASE PRICE") shall initially
be $7.00, shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be payable in lawful money of the United
States of America in accordance with Section 7(c) hereof.
(c) Upon receipt of a Right Certificate representing exercisable
Rights within the time permitted in Section 7(a), with the form of election to
purchase and certificate duly executed, accompanied by payment of the Purchase
Price for the shares to be purchased and an amount equal to all applicable taxes
and governmental charges required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof by certified check, cashier's
check or money order payable to the order of the Company, the Rights Agent shall
promptly (i)(A) requisition from any transfer agent of the Preferred Shares
certificates for the number of one 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 Preferred Shares issuable upon exercise of Rights with a
depositary agent, requisition from any depositary agent for the Preferred Shares
depositary receipts representing such number of one 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 Preferred Shares represented by such receipts shall be
deposited by the transfer agent with the depositary agent), and the Company
hereby directs the depositary agent to comply with all such requests, (ii) when
appropriate, requisition from the Company the amount of cash to be paid in lieu
of issuance of fractional Preferred Shares in accordance with Section 14 hereof,
(iii) after receipt of such certificates or depositary receipts, cause the same
to be delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or
9
names as may be designated by such holder and (iv) when appropriate, after
receipt, deliver such cash to or upon the order of the registered holder of such
Right Certificate. In the event that the Company is obligated to issue
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 Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to
such holder's duly authorized assigns, subject to the provisions of Section 6
and Section 14 hereof.
(e) The Company covenants and agrees that it will cause to be
reserved and kept available, out of its authorized and unissued Preferred Shares
or any Preferred Shares held in its treasury, the number of Preferred Shares
that will be sufficient to permit the exercise in full of all Rights in
accordance with this Section 7.
(f) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Triggering Event, (i) all Rights that
are or were acquired or beneficially owned by an Acquiring Person (and all
Rights that are or were acquired or beneficially owned by each Associate and by
each Affiliate of such Acquiring Person) shall be null and void without any
further action on the part of the Company, the Rights Agent or any other Person
(all such Rights, "VOID RIGHTS") and (ii) any holder of such Void Rights
(including (A) 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"), (B) 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 (x) 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 (y) 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 (C) 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 thereafter have no right to exercise such Void Rights under any provision
of this Agreement. No Right Certificate shall be issued pursuant to Sections 5
or 6 that represents Rights beneficially owned by an Acquiring Person whose
Rights have become Void Rights pursuant to the preceding sentence or by any
Associate or Affiliate thereof; no Right Certificate shall be issued at any time
upon the transfer of any Rights to an Acquiring Person whose Rights have become
Void Rights pursuant to the preceding sentence or to any Associate or Affiliate
thereof or to any nominee of such Acquiring Person, Associate or Affiliate; and
any Right Certificate delivered to the Rights Agent for transfer to an Acquiring
Person whose Rights have become Void Rights pursuant to the preceding sentence
or for transfer to any Associate or Affiliate thereof shall be cancelled. This
Section 7(f) shall apply not only to an initial Acquiring Person, and each of
its Affiliates and Associates, but also to all subsequent Acquiring Persons, and
each of their Affiliates and Associates.
10
(g) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) properly completed and signed the certificate following the form of election
to purchase set forth on the reverse side of the Right Certificate surrendered
for such exercise and (ii) provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates or Associates
thereof as the Company or the Rights agent shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall cancel
and retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Right Certificates to the Company, or shall, at the written request of
the Company, destroy such cancelled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
SECTION 9. STATUS AND AVAILABILITY OF PREFERRED SHARES.
(a) The Company covenants and agrees that it will use all
reasonable 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 all reasonable 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 all reasonable 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 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.
11
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 valid 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 taxes and governmental charges that may be payable
in respect of the issuance or delivery of the Right Certificates or of any
Preferred Shares (or other securities of the Company) upon the exercise of
Rights. The Company shall not, however, be required (i) to pay any tax or
governmental charge that may be payable in respect of any transfer or delivery
of Right 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 Right Certificate evidencing Rights surrendered for exercise or to issue
or (ii) to deliver any certificates or depositary receipts for Preferred Shares
(or other securities of the Company) upon the exercise of any Rights until all
such taxes and governmental charges shall have been paid (all such taxes and
governmental charges being payable by the holder of such Right Certificate at
the time of surrender for exercise) or until it has been established to the
Company's reasonable satisfaction that no such tax or governmental charge is
due.
SECTION 10. PREFERRED SHARES RECORD DATE. Each Person in whose name any
certificate for Preferred Shares (or other securities of the Company) is issued
upon the valid exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Preferred Shares (or other securities of the
Company) represented thereby on, and such certificate shall be dated, the date
upon which the Right Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and any applicable taxes and governmental
charges) was made. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right 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.
12
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES OR NUMBER OF
RIGHTS. The Purchase Price, the number of Preferred Shares covered by each Right
and the number of Rights outstanding are subject to adjustment from time to time
as provided in this Section 11, provided, however, that no adjustment, payment
or distribution of securities or other change in the Rights or securities
issuable upon exercise of any Rights as provided in this Section 11 shall apply
to any Void Rights.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide the outstanding Preferred Shares, (C) combine
the outstanding Preferred Shares into a smaller number of Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Preferred
Shares (including any such reclassification in connection with a consolidation
or merger in which the Company is the continuing or surviving corporation),
except as otherwise provided in this Section 11(a), the Purchase Price in effect
at the time of the record date for such dividend or of the effective date of
such dividend, subdivision, combination or reclassification, and the number and
kind of shares of capital stock that would be issuable upon exercise of a Right
on such date (if such Rights were then exercisable), shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive the aggregate number and kind of shares of capital stock
that, if such Right had been exercised immediately prior to such date, such
holder would have owned upon such exercise and been entitled to receive by
virtue of such dividend, subdivision, combination or reclassification; 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 the class or
series of capital stock of the Company issuable upon exercise of one Right.
(ii) Subject to Section 7(f) and Section 24 of this
Agreement, in the event that any Person shall become an Acquiring Person, unless
the event causing the Designated Percentage threshold to be crossed and the
Person to thereby become an Acquiring Person is a transaction set forth in
Section 13 hereof, each holder of a Right shall thereafter have a right to
receive, upon exercise of such Right at a price equal to the then current
Purchase Price multiplied by the number of one one-thousandths of a Preferred
Share for which a Right is then exercisable, in accordance with the terms of
this Agreement and in lieu of Preferred Shares, such number of Common Shares of
the Company as shall equal the result obtained by (x) multiplying the then
current Purchase Price by the number of one one-thousandths of a Preferred Share
for which a Right is then exercisable and dividing that product by (y) 50% of
the then current per share market price of the Company's Common Shares
(determined pursuant to Section 11(d) hereof) on the date such Person became an
Acquiring Person.
(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, 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 (calculated as provided in
the last sentence of this Section 11(a)(iii)) pursuant to Section 11(a)(ii)
hereof (the "CURRENT VALUE") over (2) the Purchase Price (such excess, the
"SPREAD"),
13
and (B) with respect to each Right, make adequate provision to substitute for
such Common Shares, upon payment of the applicable Purchase Price, (1) cash, (2)
a reduction in the Purchase Price, (3) Common Shares or other equity securities
of the Company (including, without limitation, shares of the Company's Preferred
Stock, or units of shares of the Company's capital stock) that the Board of
Directors of the Company has determined to have the same value as Common Shares
(such equity securities, "COMMON STOCK EQUIVALENTS")), (4) debt securities of
the Company, (5) other assets or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate value has been
determined by the Board of Directors of the Company in good faith; provided,
however, if the Company shall not have made adequate provision to deliver value
pursuant to clause (B) of this paragraph within thirty (30) days following the
first occurrence of an event triggering the rights to purchase Common Shares
described in Section 11(a)(ii) (the "SECTION 11(A)(II) TRIGGER DATE"), then the
Company shall be obligated to deliver, upon the surrender for exercise of a
Right without requiring payment of the Purchase 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 cash have an aggregate value equal to the
Spread. If the Board of Directors of the Company 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, the thirty (30) day period set
forth above may be extended to the extent necessary, but not more than ninety
(90) days after the Section 11(a)(ii) Trigger Date, in order that the Company
may seek stockholder approval for the authorization of such additional shares
(such period, as it may be extended, the "SUBSTITUTION PERIOD"). To the extent
that the Company determines that some action needs to 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(g) hereof, that such action shall apply uniformly
to all Rights, and (y) may suspend the exercisability of the Rights until the
expiration of the Substitution Period in order to seek any authorization of
additional shares and/or to decide the appropriate form of distribution to be
made pursuant to such first sentence and to determine the value thereof. In the
event of any such suspension, the Company shall make a public announcement, and
shall deliver to the Rights Agent a statement, stating that the exercisability
of the Rights has been temporarily suspended. At such time as the suspension is
no longer in effect, the Company shall make another public announcement, and
deliver to the Rights Agent a statement, so stating. For purposes of this
Section 11(a)(iii), the value of the Common Shares shall be the current per
share market price (as determined pursuant to Section 11(d)(i) hereof) 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 fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Shares entitling them
to subscribe for or purchase Preferred Shares (or shares having the same rights,
privileges and preferences as the Preferred Shares ("EQUIVALENT PREFERRED
SHARES")) or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent preferred share
(or having a conversion price per share, if a security convertible into
Preferred Shares or equivalent preferred shares) less than the then current per
share market price of the Preferred Shares (as defined in Section 11(d)) on such
record date, the Purchase Price to be in effect after such record date shall be
determined by multiplying (x) the Purchase Price in effect immediately prior to
such record date by (y) a fraction, (1) the numerator of which shall be the sum
of (A) number of Preferred Shares and/or equivalent preferred shares outstanding
on such record date plus (B) the
14
number of Preferred Shares and/or equivalent preferred shares that the aggregate
offering price of the total number of Preferred Shares and/or equivalent
preferred shares so to be offered (and/or the aggregate initial conversion price
of the convertible securities so to be offered) would purchase at such current
market price and (2) the denominator of which shall be the sum of (A) number of
Preferred Shares and/or equivalent preferred shares outstanding on such record
date plus (B) the number of additional Preferred Shares and/or equivalent
preferred shares to be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially convertible); provided,
however, that in no event shall the consideration to be paid upon the exercise
of one Right be less than the aggregate par value of the class or series of
shares of capital stock of the Company issuable upon exercise of one Right. In
case such subscription price may be paid in a consideration part or all of which
shall be in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the Company, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. Preferred Shares and/or equivalent
preferred shares owned by or held for the account of the Company shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall be adjusted to be the Purchase Price that would then be in effect if
such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of
a distribution to all holders of the Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Shares) or subscription rights or warrants (excluding those referred
to in Section 11(b) hereof), the Purchase Price to be in effect after such
record date shall be determined by multiplying (x) the Purchase Price in effect
immediately prior to such record date by (y) a fraction, (1) the numerator of
which shall be the difference of (A) then current per share market price of the
Preferred Shares or equivalent preferred shares on such record date, less (B)
the fair market value (as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed with
the Rights Agent and shall be conclusive for all purposes) of the portion of the
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Preferred Share or equivalent preferred
share and (2) the denominator of which shall be such current per share market
price of the Preferred Shares or equivalent preferred shares; provided, however,
that in no event shall the consideration to be paid upon the exercise of one
Right be less than the aggregate par value of the class or series of shares of
capital stock of the Company to be issued upon exercise of one Right. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price that would then be in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"CURRENT PER SHARE MARKET PRICE" of any security (a "SECURITY" for the purpose
of this Section 11(d)(i)) on any date shall be deemed to be the average of the
daily closing prices per share of such Security for the 30 consecutive Trading
Days (as such term is hereinafter defined) immediately prior to such date;
provided, however, that in the event that the current per share market price of
the Security is determined during a period following the announcement by the
issuer of such Security of (A) a
15
dividend or distribution on such Security payable in shares of such Security or
securities convertible into such shares, or (B) any subdivision, combination or
reclassification of such Security and prior to the expiration of 30 Trading Days
after the ex-dividend date for such dividend or distribution, or the record date
for such 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 quoted price, or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by The Nasdaq Stock Market ("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. The term "TRADING DAY" shall
mean a day on which the principal national securities exchange on which the
Security is listed or admitted to trading is open for the transaction of
business or, if the Security is not listed or admitted to trading on any
national securities exchange, a Business Day.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares shall be determined in
accordance with the method set forth in Section 11(d)(i). If the Preferred
Shares are not publicly traded, the "current per share market price" of the
Preferred Shares shall be conclusively deemed to be the current per share market
price of the Common Shares as determined pursuant to Section 11(d)(i)
(appropriately adjusted to reflect each stock split, stock combination, stock
dividend or similar transaction occurring after the date hereof), multiplied by
one thousand. If neither the Common Shares nor the Preferred Shares are publicly
held or so listed or traded, "current per share market price" shall mean the
fair value per share thereof 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.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in the
Purchase Price; provided, however, that any adjustments that by reason of this
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest one one-millionth of a
Preferred Share or one one-thousandth of any other share or security as the case
may be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than three years from the
date of the transaction that, but for such sentence of this Section 11(e), would
have required such adjustment.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than Preferred Shares,
the number of such other shares so receivable
16
upon exercise of any Right shall thereafter be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Shares contained in Section 11(a)
through (c), inclusive, and the provisions of Sections 7, 9, 10 and 13 with
respect to the Preferred Shares shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one 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.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-thousandths of a Preferred Share (calculated to the nearest one
one-millionth of a Preferred Share) obtained by (i) multiplying (x) the number
of one one-thousandths of a share covered by a Right immediately prior to this
adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights in substitution for any
adjustment in the number of one one-thousandths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
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 and outstanding thereafter shall become that
number of Rights (calculated to the nearest ten one-thousandth) obtained by
dividing (x) the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by (y) the Purchase Price in effect immediately after adjustment
of the Purchase Price. The Company shall make a public announcement (with prompt
notice thereof to the Rights Agent) of its election to adjust the number of
Rights, indicating the record date for the adjustment, and, if known at the
time, the amount of the adjustment to be made. This record date may be the date
on which the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been distributed, shall be at least ten days later than the
date of the public announcement. If Right Certificates have been distributed,
upon each adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to holders of
record of Right Certificates on such record date, Right Certificates evidencing,
subject to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in substitution and
replacement for the Right Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new Right
Certificates evidencing all the Rights to which such holders shall be entitled
after such adjustment. Right Certificates to be so distributed shall be issued,
executed and countersigned in the manner provided for herein and shall be
registered in the names of the holders of record of Right Certificates on the
record date specified in the public announcement.
17
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-thousandths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price and the number of one one-thousandths
of a Preferred Share that were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-thousandth of the then par value of
the Preferred Shares issuable upon exercise of the Rights, the Company shall
take any corporate action that may, in the opinion of its counsel, be necessary
in order that the Company may validly and legally issue fully paid and
non-assessable Preferred Shares at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer (and shall promptly notify the
Rights Agent of any such elections), until the occurrence of such event, the
issuing to the holder of any Right exercised after such record date, the
additional Preferred Shares and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Preferred Shares
and other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due xxxx or
other appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any (i) subdivision, combination or consolidation of the Preferred
Shares, (ii) issuance wholly for cash of Preferred Shares or securities that by
their terms are convertible into or exchangeable for Preferred Shares, (iii)
dividends on Preferred Shares payable in Preferred Shares or (iv) issuance of
any rights, options or warrants referred to hereinabove in Section 11(b),
hereafter made by the Company to holders of its Preferred Shares shall not be
taxable to such stockholders.
(n) In the event that at any time after the date of this
Agreement, the Company shall (i) declare or pay any dividend on the Common
Shares payable in Common Shares or (ii) effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise other than
by payment of dividends in Common Shares) into a greater or lesser number of
Common Shares, then in any such case (i) the number of one one-thousandths of a
Preferred Share purchasable after such event upon proper exercise of each Right
shall be determined by multiplying (x) the number of one one-thousandths of a
Preferred Share so purchasable immediately prior to such event by (y) a
fraction, (1) the numerator of which is the number of Common Shares outstanding
immediately before such event and (2) the denominator of which is the number of
Common Shares outstanding immediately after such event, and (ii) each Common
Share outstanding immediately after such event shall have issued with respect to
it that number of Rights that each Common Share outstanding immediately prior to
such event had issued with respect to it. The adjustments provided for in this
Section 11(n) shall be made successively whenever such a dividend is declared or
paid or such a subdivision, combination or consolidation is effected.
18
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Sections 23, 24 and 27, take (or
permit any Subsidiary to take) any action if the purpose of such action is to,
or if at the time such action is taken it is reasonably foreseeable that such
action will, diminish substantially or eliminate the benefits intended to be
afforded by the Rights.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Sections 11 or 13 hereof, the
Company shall promptly (a) prepare a certificate setting forth such adjustment,
and a brief statement of the facts and computations accounting for such
adjustment, (b) file with the Rights Agent and with each transfer agent for the
Common Shares or the Preferred Shares a copy of such certificate and (c) mail a
brief summary thereof to each holder of a Right Certificate in accordance with
Section 25 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 therein contained and shall have no duty with
respect to and shall not be deemed to have knowledge of any adjustment unless
and until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR EARNING
POWER. In the event that any Person shall become an Acquiring Person, and,
directly or indirectly, (a) the Company shall consolidate with, or merge with
and into, an Acquiring Person, or an Affiliate or Associate of an Acquiring
Person, (b) an Acquiring Person, or an Affiliate or Associate of an Acquiring
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 merger
and, in connection with such merger, all or part of the Common Shares shall be
changed into or exchanged for stock or other securities of any other Person (or
the Company) or cash or any other property, or (c) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or otherwise
transfer), in one or more transactions, assets or earning power aggregating 50%
or more of the assets or earning power of the Company and its Subsidiaries
(taken as a whole) to an Acquiring Person, or an Affiliate or Associate of an
Acquiring Person, then, and in each such case, proper provision shall be made so
that (i) each holder of a Right (other than Rights that have become Void Rights)
shall thereafter have the right to receive, upon the exercise thereof at a price
equal to the then current Purchase Price multiplied by the number of one
one-thousandths of a Preferred Share for which a Right is then exercisable, in
accordance with the terms of this Agreement and in lieu of Preferred Shares,
such number of Common Shares of the Person in the transaction (including the
Company as successor thereto or as the surviving corporation) who is issuing the
consideration with the greatest fair market value to the Company and its
stockholders in connection with such transaction (the "PRINCIPAL ISSUER") as
shall equal the result obtained by (A) multiplying the then current Purchase
Price by the number of one one-thousandths of a Preferred Share for which a
Right is then exercisable and dividing that product by (B) 50% of the then
current per share market price of the Common Shares of the Principal Issuer
(determined pursuant to Section 11(d) hereof) on the date of consummation of
such consolidation, merger, sale or transfer; (ii) the Principal Issuer shall be
liable for, and shall assume, by virtue of such consolidation, merger, sale or
transfer, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer to the
Principal Issuer; and (iv) the Principal Issuer shall take such steps
(including, but not limited to, the reservation of a sufficient number of its
Common Shares in accordance with Section 9 hereof) in
19
connection with such consummation as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to the Common Shares thereafter deliverable upon the exercise of
the Rights. The Company covenants and agrees that it shall not consummate any
such consolidation, merger, sale or transfer unless prior thereto the Company
and the Principal Issuer shall have executed and delivered to the Rights Agent a
supplemental agreement so providing. The Company shall not enter into any
transaction of the kind referred to in this Section 13 if at the time of such
transaction there are any rights, warrants, instruments or securities
outstanding or any agreements or arrangements that, as a result of the
consummation of such transaction, would eliminate or substantially diminish the
benefits intended to be afforded by the Rights. The provisions of this Section
13 shall similarly apply to successive mergers or consolidations or sales or
other transfers.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights
or to distribute Right Certificates that evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be the last
sale price, regular way, or, in case no such sale takes place on such day, the
average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the New York Stock Exchange or,
if the Rights are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting system
with respect to securities listed on the principal national securities exchange
on which the Rights are listed or admitted to trading or, if the Rights are not
listed or admitted to trading on any national securities exchange, the last
quoted price or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by Nasdaq or such other
system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the Board of
Directors of the Company. If on any such date no such market maker is making a
market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Company shall be used.
(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 that evidence fractional Preferred Shares (other than
fractions that are integral multiples of one one-thousandth of a Preferred
Share). 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 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
20
Right Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fractions of the current market value of one
Preferred Share. For the purposes of this Section 14(b), the current market
value of a Preferred Share shall be the closing price of a Preferred Share (as
determined pursuant to the second sentence of Section 11(d)(i) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) The holder of a Right by the acceptance of the Right expressly
waives any right to receive fractional Rights or fractional shares upon exercise
of a Right (except as provided above).
SECTION 15. RIGHTS OF ACTION. All rights of action in respect of this
Agreement, excepting the rights of action of the Rights Agent and the Company,
are vested in the respective registered holders of the Rights; and any
registered holder of any Right may, without the consent of the Rights Agent or
of the holder of any other Right, in such holder's own behalf and for such
holder's own benefit, enforce, and may institute and maintain any suit, action
or proceeding against the Company to enforce, or otherwise act in respect of,
such holder's right to exercise the Rights in the manner provided in this
Agreement and in any issued and outstanding Right Certificate representing such
Right. Without limiting the foregoing or any remedies available to the holders
of Rights, it is specifically acknowledged that the holders of Rights would not
have an adequate remedy at law for any breach of this Agreement and will be
entitled to specific performance of the obligations under, and injunctive relief
against actual or threatened violations of the obligations of any Person subject
to, this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books maintained by the Rights Agent if
surrendered at the office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer and payment of taxes and governmental changes, all
as otherwise provided in Section 6; and
(c) the Company and the Rights Agent shall deem and treat the
Person in whose name the Right Certificate (or, prior to the Distribution Date,
the associated Common Shares certificate) is registered as the absolute owner
thereof and of the Rights evidenced thereby (notwithstanding any notations of
ownership or writing on the Right Certificates or the associated Common Shares
certificate made by anyone other than the Company or the Rights Agent) for all
purposes whatsoever, and neither the Company nor the Rights Agent shall be
affected by any notice (other than notice provided by transfer documentation
properly completed and tendered in accordance with this Agreement) to the
contrary.
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its failure to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree, judgment or ruling (whether
21
interlocutory final) issued by a court of competent jurisdiction or by a
governmental, regulatory or administrative agency or commission, or any statute,
rule, regulation or executive order promulgated or enacted by any governmental
authority prohibiting or otherwise restraining performance of such obligation.
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER. No holder,
as such, of any Right shall be entitled to vote, receive dividends or be deemed
for any purpose the holder of the Preferred Shares or any other securities of
the Company that may at any time be issuable on the exercise of such Rights nor
shall anything contained herein or in any Right Certificate be construed to
confer upon the holder of any Rights, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise, until such Right
shall have been properly exercised in accordance with the provisions hereof.
SECTION 18. COMPENSATION AND INDEMNITY OF 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 preparation, delivery, amendment, administration and execution
of this Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent (including employees,
directors, officers and agents of the Rights Agent (the Rights Agent together
with such Persons, the "AGENT INDEMNITEES")) for, and to hold each Agent
Indemnitee harmless against, any loss, liability, damage, judgment, fine,
penalty, claim, demand, settlement, cost or expense (each an "AGENT LOSS"),
incurred on the part of such Agent Indemnitee for any action taken, suffered or
omitted by any of the Agent Indemnitees 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, provided, however, that the
Company shall not be required to indemnify any Agent Indemnitee hereunder for
any Agent Loss that resulted from any action taken, suffered or omitted by the
Agent Indemnitee in bad faith or through gross negligence or willful misconduct
of the Rights Agent or any other Agent Indemnity, as each is finally determined
by a court of competent jurisdiction, and the respective Agent Indemnitee shall
promptly refund to the Company all sums advanced to such Agent Indemnitee as or
against indemnification for Agent Losses upon such judicial determination. If an
Agent Indemnitee brings an action to enforce its right to indemnification under
this Section 18, the Company shall pay the costs of such action to the extent
that such Agent Indemnitee is a prevailing party in such litigation. Anything to
the contrary notwithstanding, in no event shall any Agent Indemnitee be liable
for special, punitive, indirect, consequential or incidental loss or damage of
any kind whatsoever (including but not limited to lost profits), even if such
Agent Indemnitee has been advised of the likelihood of such loss or damage. Any
liability of an Agent Indemnitee under this Rights Agreement will be limited to
the amount of fees paid by the Company to the Rights Agent. The provisions of
this Section 18 and Section 20 below shall survive the termination of this
Agreement, the exercise or expiration of the Rights and the resignation or
removal of the Rights Agent.
(b) The Rights Agent shall be authorized to rely on, shall be
protected and shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with the acceptance and administration
of this Agreement or the exercise or
22
performance of its duties hereunder in reliance upon any Right Certificate or
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, instruction, direction, consent, certificate, statement, or other paper
or document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT. Any
Person into which the Rights Agent or any successor Rights Agent may be merged
or with which it may be consolidated, or any Person resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent shall be a
party, or any Person succeeding to the shareholder service business of the
Rights Agent or any successor Rights Agent, shall be the successor to the Rights
Agent under this Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided that such Person
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement any of the Right
Certificates shall have been countersigned but not delivered, any such successor
Rights Agent may adopt the countersignature of the predecessor Rights Agent and
deliver such Right Certificates so countersigned; and in case at that time any
of the Right Certificates shall not have been countersigned, any successor
Rights Agent may countersign such Right Certificates either in the name of the
predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Right Certificates shall have the full force provided in the
Right Certificates and in this Agreement.
In case at any time the name of the Rights Agent shall be changed and at
such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver Right Certificates so countersigned; and in case at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Agreement.
SECTION 20. RIGHTS AND DUTIES OF RIGHTS AGENT. The Rights Agent undertakes
only the duties and obligations expressly imposed by this Agreement upon the
following terms and conditions, by all of which the Company and, by their
acceptance of Rights, the holders of Rights shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the advice or opinion of such counsel shall
be full and complete authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted by it in good faith and in accordance with such advice or
opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter be
proved or established by the Company prior to taking, suffering or omitting 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 General Counsel,
the
23
Treasurer or the Secretary of the Company and delivered to the Rights Agent; and
such certificate shall be full authorization and protection to the Rights Agent
and the Rights Agent shall incur no liability for or in respect of any action
taken, suffered or omitting in good faith by it under the provisions of this
Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
bad faith, gross negligence or willful misconduct as finally determined by a
court of competent jurisdiction. The Rights Agent makes no representation or
warranty with respect to and is not responsible or liable for the validity,
value or availability of the Rights, the Right Certificates or the Preferred
Shares.
(d) The Rights Agent shall be protected and shall incur no
liability for any action taken, suffered or omitted by it in connection with,
its administration of this Agreement in reliance upon any Right Certificate or
certificate for the Common Shares or for other securities of the Company,
instrument of assignment or transfer, power of attorney, endorsement, affidavit,
letter, notice, direction, consent, certificate, statement or other paper or
document believed by it to be genuine and to be signed, executed and, where
necessary, verified or acknowledged, by the proper Person or Persons, or
otherwise upon the advice or opinion of counsel as set forth in this Section 20.
(e) The Rights Agent shall not be assumed to have knowledge of and
shall not be required to take note of or act upon any fact or circumstance
including, without limitation, the occurrence of facts or circumstances leading
to the Shares Acquisition Date or the Distribution Date, facts or circumstances
relating to whether any Person may be an Affiliate or an Associate of any other
Person, facts or circumstances relevant to an adjustment to the Purchase Price,
facts or circumstances relevant to events described in Section 13 (mergers,
etc.), Section 23 (redemption) and Section 24 (exchange) that may be relevant to
performance by the Rights Agent under this Agreement unless the Company has
provided written notice thereof to the Rights Agent; and the Company agrees that
it will (i) promptly notify the Rights Agent in writing of the occurrence of the
Shares Acquisition Date (including the identity of the Acquiring Person and the
date on which the Shares Acquisition Date occurred), the Distribution Date, the
Redemption Date, and of any events described in Section 13 (merger), and (ii)
promptly provide the Rights Agent with such other information as the Rights
Agent may reasonably request in connection with the performance of its duties
under this Agreement.
(f) The Rights Agent shall not have any liability for or be under
any responsibility in respect of the validity of this Agreement or the execution
and delivery hereof (except the due authorization and execution hereof by the
Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be responsible
for any breach by the Company of any covenant or condition contained in this
Agreement or in any Right Certificate; nor shall it be responsible for any
change in the exercisability of the Rights (including the Rights becoming null
and void pursuant to Section 7(f) hereof) or any change or adjustment in the
terms of the Rights (including the manner, method or amount thereof) provided
for in Section 3, 11, 13, 23 or 24, or the ascertaining of the existence of
facts that would require any such change or adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates after receipt of the
certificate described in Section 12 hereof, upon which the Rights Agent may
rely); nor shall it by any act hereunder be deemed to
24
make any representation or warranty as to the authorization or reservation of
any Preferred Shares will, when issued, be validly authorized and issued, fully
paid and nonassessable.
(g) 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.
(h) 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 General Counsel, the Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in connection
with its duties, and it shall not be liable for any action taken or suffered by
it in good faith in accordance with instructions of any such officer or for any
delay in acting while waiting for those instructions. Any application by the
Rights Agent for written instructions from the Company may, at the option of the
Rights Agent, set forth in writing any action proposed to be taken or omitted by
the Rights Agent with respect to its duties or obligations under this Rights
Agreement and the date on and/or after which such action shall be taken or
omitted and the Rights Agent shall not be liable for any action taken, suffered
or omitted in accordance with a proposal included in any such application on or
after the date specified therein (which date shall not be less than three
Business Days after the date any such officer actually receives such
application, unless any such officer shall have consented in writing to an
earlier date) unless, prior to taking or omitting any such action, the Rights
Agent has received written instructions in response to such application
specifying the action to be taken or omitted.
(i) The Rights Agent and any stockholder, director, Affiliate,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other Person.
(j) 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, with regard to acts performed through its
attorneys, the Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct of any such attorneys or for any loss to the
Company resulting from any such act, default, neglect or misconduct, absent bad
faith, gross negligence or willful misconduct of the Rights Agent (as finally
determined by a court of competent jurisdiction) in the selection and continued
employment of such attorneys.
(k) 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 it reasonably believes that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.
SECTION 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares or Preferred
25
Shares by registered or certified mail, and to the holders of the Right
Certificates by first-class mail. In the event the transfer agency relationship
in effect between the Company and the Rights Agent terminates, the Rights Agent
will be deemed to resign automatically on the effective date of such
termination; and any required notice will be sent by the Company. The Company
may remove the Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Shares or Preferred Shares by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. If the Company shall fail to make such appointment within a
period of 30 days after giving notice of such removal or after it has been
notified in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Right (who shall, with such
notice, submit such holder's Right Certificate or, before the Distribution Date,
certificate representing Common Shares, for inspection by the Company), then the
registered holder of any Right may apply to any court of the United States or of
any state thereof having competent jurisdiction over such matter for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (i) a Person organized and doing
business under the laws of the United States or of the State of California (or
of any other state of the United States), so long as such Person in good
standing, which is authorized under such laws to exercise shareholder service
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 $50 million dollars or (ii) an
Affiliate of a Person described in clause (i) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance, conveyance, act
or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the
predecessor Rights Agent and each transfer agent of the Common Shares or
Preferred Shares, and mail a notice thereof in writing to the registered holders
of Rights. Failure to give any notice provided for in this Section 21, however,
or any defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of the successor
Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Right Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the Purchase Price and the number or kind or class of shares or other securities
or property purchasable under the Rights made in accordance with the provisions
of this Agreement. In addition, following the Distribution Date and prior to the
Redemption Date or Final Expiration Date, in connection with the issuance or
sale of Common Shares 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, in each case, which options or securities are
outstanding prior to the Distribution Date, the Board of Directors shall issue
Right Certificates representing the appropriate number of Rights in connection
with such issuance or sale; provided, however, that (i) no such Right
Certificate shall be issued and this sentence shall be null and void ab initio
if, and to the extent that, such issuance or this
26
sentence would create a significant risk of or result in material adverse tax
consequences to the Company or the Person to whom such Right 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 Right 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 Board of Directors of the Company may, at its option, at
any time from and after the Record Date and prior to such time as any Person
becomes an Acquiring Person (the "REDEMPTION PERIOD"), redeem all but not less
than all the then outstanding Rights at a redemption price of $0.000001 per
Right, appropriately adjusted to reflect each stock split, stock combination,
stock dividend or similar transaction occurring after the date hereof (such
redemption price, as so adjusted, being hereinafter referred to as the
"REDEMPTION PRICE"). After the Redemption Period has expired, the Board of
Directors may not extend the period for redemption of the Rights or otherwise
provide for their redemption. The redemption of the Rights by the Board of
Directors may be made effective at such time during the Redemption Period, on
such basis and subject to such conditions as the Board of Directors in its sole
discretion may establish.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to Section 23(a), and
without any further action and without any notice, the right to exercise all
then outstanding 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 notice to the Rights Agent and 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 days
after such action of the Board of Directors ordering the redemption of the
Rights pursuant to Section 23(a), the Company shall mail a notice of redemption
to all the holders of the then outstanding Rights at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent for the Common
Shares. Any notice that is mailed in the manner herein provided shall be deemed
given upon mailing, whether or not the holder receives the notice. If the
payment of the Redemption Price is not included in such notice, each such notice
shall state the method by which the payment of the Redemption Price will be
made. Neither the Company nor any of its Affiliates or Associates may redeem,
acquire or purchase for value any Rights at any time in any manner other than
(i) as specifically set forth in this Section 23 or in Section 24 hereof, or
(ii) in connection with the purchase of Common Shares prior to the Distribution
Date.
SECTION 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at
any time after any Person becomes an Acquiring Person, authorize and direct the
exchange of all or part of the then outstanding and exercisable Rights (which
shall not include Rights that have become Void Rights) for Common Shares at an
exchange ratio (the "EXCHANGE RATIO") of one Common Share per Right,
appropriately adjusted to reflect each stock split, stock combination, stock
dividend or similar transaction occurring after the date hereof. Notwithstanding
the foregoing,
27
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 a majority of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant Section 24(a) hereof and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of Common Shares equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give notice to the Rights Agent and public notice of any such exchange;
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights Agent. Any notice
that is mailed in the manner herein provided shall be deemed given when mailed,
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 that
will be exchanged. Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights that have become Void Rights) held by each
holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at
its option, may substitute Preferred Shares (or common stock equivalents, as
such term is defined in Section 11(a)(iii) hereof) for Common Shares
exchangeable for Rights, at the initial rate of one one-thousandth of a
Preferred Share (or common stock equivalents) for each Common Share, as
appropriately adjusted to reflect adjustments in the voting rights of the
Preferred Shares pursuant to the terms thereof, so that the fraction of a
Preferred Share delivered in lieu of each Common Share shall have the same
voting rights as one Common Share, 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.
28
(d) The Company shall not be required to issue fractions of Common
Shares or to distribute certificates that evidence fractional Common Shares. In
lieu of such fractional Common Shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such fractional Common
Shares would otherwise be issuable, an amount in cash equal to the same fraction
of the current per share market value of a whole Common Share. For the purposes
of this Section 24(d), the current per share market value of a whole Common
Share shall be the closing price of a Common Share (as determined pursuant to
the second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Shares or to make
any other distribution to the holders of its Preferred Shares (other than a
regular quarterly cash dividend), (ii) to offer to the holders of its Preferred
Shares rights or warrants to subscribe for or to purchase any additional
Preferred Shares or shares of stock of any class or any other securities, rights
or options, (iii) to effect any reclassification of its Preferred Shares (other
than a reclassification involving only the subdivision of outstanding Preferred
Shares), (iv) to effect any consolidation or merger into or with, or to effect
any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to, any other Person, (v) to effect the liquidation, dissolution or
winding up of the Company or (vi) to declare or pay any dividend on the Common
Shares payable in Common Shares or to effect a subdivision, combination or
consolidation of the Common Shares (by reclassification or otherwise than by
payment of dividends in Common Shares), then, in each such case, the Company
shall give to the Rights Agent and each holder of a Right Certificate, in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the record date for the purposes of such stock dividend, or distribution
of rights or warrants, or the date on which such reclassification,
consolidation, merger, sale, transfer, liquidation, dissolution or winding up is
to take place and the date of participation therein by the holders of the Common
Shares and/or Preferred Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii) above
at least ten days prior to the record date for determining holders of the
Preferred Shares for purposes of such action, and in the case of any such other
action, at least ten days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the Common Shares
and/or Preferred Shares, whichever shall be the earlier.
(b) If any event set forth in Section 11(a)(ii) hereof shall
occur, then the Company shall as soon as practicable thereafter give to each
holder of a Right Certificate, in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe such event and the
consequences of such event to holders of Rights under Section 11(a)(ii) hereof.
SECTION 26. NOTICES. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Right 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:
29
Handspring, Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
Right 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:
EquiServe Trust Company, N.A.
000 Xxxxxx Xxxxxx
Mail Stop 45-02-62
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 Right Certificate shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed to such holder at the address of such holder as shown on the registry
books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS. The Company may, by resolution of
its Board of Directors, from time to time, and the Rights Agent shall, if the
Company directs, supplement or amend this Agreement without the approval of any
holders of Rights in order to cure any ambiguity, to correct or supplement any
provision contained herein that may be defective or inconsistent with any other
provisions herein, or to make any other provisions or changes with respect to
the Rights that the Company may deem necessary or desirable, including, without
limitation, to modify or amend the definition of Acquiring Person set forth in
Section 1(a) hereof, to change the Purchase Price set forth in Section 7(b), or
to extend or shorten the period for redemption of the Rights; provided, however,
that from and after such time as any Person becomes an Acquiring Person, this
Agreement shall not be amended in any manner that would adversely affect the
interests of the holders of Rights (other than Void Rights of an Acquiring
Person and its Affiliates and Associates), including, without limitation, to
extend the period for redemption of the Rights, or otherwise provide for their
redemption, or to provide for an earlier Final Expiration Date. Any such
supplement or amendment will be evidenced by a writing signed by the Company and
the Rights Agent. Upon the delivery of a certificate from an appropriate officer
of the Company and, if requested by the Rights Agent, an opinion of counsel,
that states that the proposed supplement or amendment complies with this Section
27, the Rights Agent shall execute such supplement or amendment, provided,
however, the Rights Agent shall not be obligated to enter into any amendment or
supplement to this Agreement that in the opinion of the Rights Agent, may
adversely affect the rights, duties, liabilities of the Rights Agent.
SECTION 28. SUCCESSORS. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
SECTION 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the
30
Rights any legal or equitable right, remedy or claim under this Agreement; but
this Agreement shall be for the sole and exclusive benefit of the Company, the
Rights Agent and the registered holders of the Rights.
SECTION 30. SEVERABILITY. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, then such term, provision,
covenant or restriction shall be enforced to the maximum extent permissible, and
the remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be affected,
impaired or invalidated.
SECTION 31. GOVERNING LAW. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of 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.
SECTION 32. COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
SECTION 33. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
SECTION 34. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof.
SECTION 35. FORCE MAJEURE. Notwithstanding anything to the contrary
contained herein, Rights Agent shall not be liable for any delays or failures in
performance resulting from acts beyond its reasonable control including, without
limitation, acts of God, terrorist acts, shortage of supply, breakdowns or
malfunctions, interruptions or malfunction of computer facilities, or loss of
data due to power failures or mechanical difficulties with information storage
or retrieval systems, labor difficulties, war, or civil unrest.
[Signatures on Following Page]
31
IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement
to be duly executed and attested, all as of the day and year first above
written.
Company:
HANDSPRING, INC.
By: /s/ Xxxxxxx X. Xxxxxx
---------------------------------------
Name: Xxxxxxx X. Xxxxxx
-------------------------------------
Title: Vice President of Finance and
------------------------------------
Chief Financial Officer
------------------------------------
Rights Agent:
EQUISERVE TRUST COMPANY, N.A.
By: /s/ Xxxxx Xxxxxx
---------------------------------------
Name: Xxxxx Xxxxxx
-------------------------------------
Title: Managing Director
------------------------------------
[SIGNATURE PAGE TO RIGHTS AGREEMENT]
32
EXHIBIT A
FORM
OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
OF
HANDSPRING, INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
----------------
Handspring, Inc., a corporation organized and existing under the General
Corporation Law of the State of Delaware (hereinafter called the "CORPORATION"),
hereby certifies that the following resolution was adopted by the Board of
Directors of the Corporation as required by Section 151 of the General
Corporation Law at a meeting duly called and held on June 3, 2003:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors of this Corporation (hereinafter called the "BOARD OF
DIRECTORS" or the "BOARD") in accordance with the provisions of the Certificate
of Incorporation of the Corporation, the Board of Directors hereby creates a
series of Preferred Stock, par value $0.001 per share (the "PREFERRED STOCK"),
of the Corporation and hereby states the designation and number of shares, and
fixes the relative rights, preferences, and limitations thereof as follows:
Series A Junior Participating Preferred Stock:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "SERIES A JUNIOR PARTICIPATING PREFERRED STOCK" (the "SERIES A
PREFERRED STOCK") and the number of shares constituting the Series A Preferred
Stock shall be Two Hundred Thousand (200,000). Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided, that
no decrease shall reduce the number of shares of Series A Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any other stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares of
Series A 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,
1
quarterly dividends payable in cash on the first day of March, June, September
and December in each year (each such date being referred to herein as a
"QUARTERLY DIVIDEND PAYMENT DATE"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Series A Preferred Stock, in an amount (if any) per share (rounded to the
nearest cent), subject to the provision for adjustment hereinafter set forth,
equal to 1000 times the aggregate per share amount of all cash dividends, and
1000 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, par value $0.001 per share (the "COMMON STOCK"), of the Company or
a subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under the
preceding sentence shall be adjusted by multiplying (x) such amount by (y) a
fraction, (1) the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and (2) the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(B) The Corporation shall declare a dividend or distribution on
the Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock).
(C) Dividends due pursuant to paragraph (A) of this Section shall
begin to accrue and be cumulative on outstanding shares of Series A Preferred
Stock from the Quarterly Dividend Payment Date next preceding the date of issue
of such shares, unless the date of issue of such shares is prior to the record
date for the first Quarterly Dividend Payment Date, in which case dividends on
such shares shall begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series A Preferred
Stock entitled to receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but
unpaid dividends shall not bear interest. Dividends paid on the shares of Series
A Preferred Stock in an amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series A Preferred Stock entitled to receive payment of a dividend or
distribution declared thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of Series A Preferred
Stock shall have the following voting rights:
2
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series A Preferred Stock shall entitle the holder thereof to 1000
votes on all matters submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time declare or pay any dividend on
the Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the number of votes per share to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying (x) such number by (y) a fraction, (1) the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and (2) the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other Certificate
of Designations creating a series of Preferred Stock or any similar stock, or by
law, the holders of shares of Series A Preferred Stock and the holders of shares
of Common Stock and any other capital stock of the Corporation having general
voting rights shall vote together as one class on all matters submitted to a
vote of stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series A Preferred Stock
outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A Preferred Stock;
(ii) declare or pay dividends, 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
Preferred Stock, except dividends paid ratably on the Series A Preferred Stock
and all such parity stock on which dividends are payable or in arrears in
proportion to the total amounts to which the holders of all such shares are then
entitled; or
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of
the Corporation ranking junior (as to dividends and upon dissolution,
liquidation or winding up) to the Series A Preferred Stock.
3
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series A Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
subject to the conditions and restrictions on issuance set forth herein, in the
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preferred Stock or any similar stock or as otherwise
required by law.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP.
(A) Upon any liquidation, dissolution or winding up of the
Corporation, the holders of shares of Series A Preferred Stock shall be entitled
to receive, prior and in preference to any distribution of any assets of the
Corporation to the holders of Common Stock, the amount of $0.10 per share for
each share of Series A Preferred Stock then held by them. Thereafter, the
holders of shares of Series A Preferred Stock shall be entitled to receive an
aggregate amount per share, subject to the provision for adjustment hereinafter
set forth, equal to 1000 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. In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the aggregate amount to which holders of shares of Series A
Preferred Stock were entitled immediately prior to such event under the
preceding sentence shall be adjusted by multiplying (x) such amount by (y) a
fraction (1) the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and (2) the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
(B) If the assets of the Corporation legally available for
distribution to the holders of shares of Series A Preferred Stock upon
liquidation, dissolution or winding up of the Corporation are insufficient to
pay the full preferential amount set forth in the first sentence of paragraph
(A) above, then the entire assets of the Corporation legally available for
distribution to the holders of Series A Preferred Stock shall be distributed
among such holders in proportion to the shares of Series A Preferred Stock then
held by them.
(C) The foregoing rights upon liquidation, dissolution or winding
up provided to the holders of Series A Preferred Stock shall be subject to the
rights of the holders of any other series of Preferred Stock (or any other
stock) ranking prior and superior to the Series A Preferred Stock upon
liquidation, dissolution or winding up.
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or other property, then in
4
any such case each share of Series A Preferred Stock shall at the same time be
similarly exchanged or changed into an amount per share, subject to the
provision for adjustment hereinafter set forth, equal to 1000 times the
aggregate amount of stock, securities, cash and/or any other property (payable
in kind), as the case may be, into which or for which each share of Common Stock
is changed or exchanged. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a dividend
in shares of Common Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series A Preferred Stock
shall be adjusted by multiplying (x) such amount by (y) a fraction, (1) the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and (2) the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
SECTION 8. NO REDEMPTION. The shares of Series A Preferred Stock shall not
be redeemable.
5
IN WITNESS WHEREOF, this Certificate of Designations is executed on behalf
of the Corporation this __ day of __________, 2003.
HANDSPRING, INC.
By:_____________________________
[SIGNATURE PAGE TO CERTIFICATE OF DESIGNATIONS]
6
EXHIBIT B
SUMMARY OF STOCK PURCHASE RIGHTS
On June 3, 2003, the Board of Directors of Handspring, Inc. (the
"COMPANY") declared a dividend of one stock purchase right (a "RIGHT") for each
outstanding share of common stock, par value $0.001 per share (the "COMMON
SHARES"), of the Company. The dividend is payable to stockholders of record on
June 5, 2003 (the "RECORD DATE"). In addition, one Right will be issued with
each share of Company common stock that becomes outstanding (i) between the
Record Date and the earliest of the Distribution Date (as defined below), the
date the Rights are redeemed and the date the Rights expire or (ii) following
the Distribution Date and prior to the date the Rights are redeemed and the date
the Rights expire, pursuant to the exercise of employee stock options or upon
the exercise, conversion or exchange of other securities of the Company,
outstanding prior to the Distribution Date. Each Right entitles the registered
holder to purchase from the Company one one-thousandth of a share of the
Company's Series A Junior Participating Preferred Stock (the "PREFERRED SHARES")
at a price of $7.00 per one one-thousandth of a Preferred Share (the "PURCHASE
PRICE"), subject to adjustment. A complete description of the terms of the
Rights is set forth in a Rights Agreement between the Company and EquiServe
Trust Company, N.A., as Rights Agent (the "RIGHTS AGREEMENT").
Until the earlier to occur of (i) ten days following a public announcement
or disclosure that a person or group of affiliated or associated persons (an
"ACQUIRING PERSON"), has acquired beneficial ownership of 15% or more of the
Company's outstanding common stock or (ii) ten business days (or a later date
determined by the Company's Board of Directors before a person or group becomes
an Acquiring Person) following the announcement of an intention to make a tender
offer or exchange offer the consummation of which would result in a person or
group becoming an Acquiring Person (the earlier of such dates being called the
"DISTRIBUTION DATE"), the Rights will be represented by common stock
certificates with a copy of this Summary of Rights attached. No person or group
will become an Acquiring Person if the Company's Board of Directors determines
that such person crossed the ownership threshold inadvertently, and such person
or group promptly sells shares of Company common stock until they own less than
15% of the outstanding common stock. Until termination of the Agreement and Plan
of Reorganization dated as of June 4, 2003, among the Company, Palm, Inc.
("PALM") and certain subsidiaries of Palm (the "MERGER AGREEMENT"), Palm is not,
and will not become, an Acquiring Person. If, upon termination of the Merger
Agreement, Palm then holds 15% or more of the Company's outstanding common
stock, Palm will not be, or become, an Acquiring Person unless Palm, together
with its affiliated and associated persons, acquires shares of Company Common
Stock in addition to the number of shares of the Company's outstanding common
stock beneficially owned by them as of the date of termination of the Merger
Agreement. If Palm, or its affiliated or associated persons, thereafter divests
shares of Company common stock, the percentage beneficial ownership of the
Company's outstanding common stock that Palm, together with its affiliated and
associated persons, is permitted to hold without becoming an Acquiring Person
shall automatically be reduced to the percentage of the Company's outstanding
common stock beneficially owned by Palm, and its affiliated and associated
persons, immediately following such divestiture.
While the Merger Agreement is in effect, neither Xxxxxxx X. Xxxxxxx nor
Xxxxx X. Xxxxxxxx will become an Acquiring Person unless either person, together
with his or her
1
respective affiliated or associated persons, has acquired shares of Company
common stock (other than in connection with Company stock option exercises or
other Company compensatory stock issuances) in addition to the number of shares
of the Company's outstanding common stock beneficially owned by them as of the
Record Date, and such ownership exceeds 15% of the Company's outstanding common
stock. Following termination of the Merger Agreement, neither Xxxxxxx X. Xxxxxxx
nor Xxxxx X. Xxxxxxxx will become an Acquiring Person unless either person,
together with his or her respective affiliated or associated persons, has
acquired, in addition to the number of shares of the Company's outstanding
common stock beneficially owned by them as of the Record Date, a number of
shares (excluding shares acquired in connection with Company stock option
exercises or other Company compensatory stock issuances) exceeding 5% of the
total number of outstanding shares of common stock of the Company, and such
ownership exceeds 15% of the Company's outstanding common stock.
The Rights Agreement provides that, until the Distribution Date, the
Rights will be transferred only with Company common stock. Until the
Distribution Date (or earlier redemption or expiration of the Rights), new
common stock certificates issued after the Record Date will contain a notation
incorporating the Rights Agreement by reference. Until the Distribution Date (or
earlier redemption or expiration of the Rights), the transfer of any common
stock certificates, even without such notation or a copy of this Summary of
Rights being attached, will also constitute the transfer of the Rights
associated with the Company common stock represented by such certificate. After
the Distribution Date, separate certificates representing the Rights will be
mailed to record holders of Company common stock on the Distribution Date and
such separate certificates alone will evidence the Rights. If shares of Company
common stock are issued or sold after the Distribution Date (but prior to the
redemption or expiration of the Rights) in connection with the exercise of stock
options or upon the exercise, conversion or exchange of other securities of the
Company outstanding prior to the Distribution Date, the Company shall issue the
appropriate number of Rights in connection with such issuance or sale.
The Rights are not exercisable until the Distribution Date. The Rights
will expire on June 5, 2013, unless the expiration date is extended or unless
the Rights are earlier redeemed or exchanged by the Company, as described below.
Until a Right is exercised, the holder of a Right, as such, will have no rights
as a stockholder of the Company.
The purchase price payable, and the number of Preferred Shares or other
securities or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution. The number of Rights and the
number of one one-thousandths of a Preferred Share issuable upon exercise of
each Right are also subject to adjustment upon certain events occurring before
the Distribution Date.
The Preferred Shares have been structured so that each Preferred Share has
dividend, liquidation and voting rights equal to those of 1,000 shares of
Company common stock. Because of this, the value of the one one-thousandth
interest in a Preferred Share purchasable upon exercise of each Right should
approximate the value of one Common Share. The Preferred Shares are not
redeemable.
2
In the event that any person or group owns more than 15% of the Company's
outstanding common stock and thereby becomes an Acquiring Person, unless the
event causing the person to become an Acquiring Person is a merger, acquisition
or other business combination described in the next paragraph, each holder of a
Right, other than Rights beneficially owned by the Acquiring Person (which will
thereafter be void), will thereafter have the right to receive upon exercise and
payment of the exercise price that number of shares of common stock having a
market value of two times the exercise price of the Right. If the Company does
not have enough authorized but unissued shares of common stock to satisfy this
obligation to issue common shares, the Company will deliver upon payment of the
exercise price of a Right an amount of cash or other securities equivalent in
value to the common stock issuable upon exercise of a Right.
In the event that any person or group becomes an Acquiring Person and the
Company merges into or engages in certain other business combinations with an
Acquiring Person, or 50% or more of its consolidated assets or earning power are
sold to an Acquiring Person, each holder of a Right, other than Rights owned by
an Acquiring Person, will thereafter have the right to receive, upon exercise
and payment of the exercise price, that number of shares of common stock of the
acquiring company that at the time of such transaction will have a market value
of two times the exercise price of the Right.
At any time after a person or group becomes an Acquiring Person and prior
to such person acquiring a majority of the outstanding Company common stock, the
Company Board of Directors may exchange all or some of the Rights (other than
Rights owned by the Acquiring Person), at an exchange ratio of one Common Share,
or one one-thousandth of a Preferred Share (or other equivalent securities), per
Right.
At any time before a person or group becomes an Acquiring Person, the
Company Board of Directors may redeem all (but not some) of the Rights at a
price of $0.000001 per Right and on such terms and conditions as the Board of
Directors may establish. After the period for redemption of the Rights has
expired, the Board may not amend the Rights Agreement to extend the period for
redemption of the Rights. Immediately upon any redemption of the Rights, the
right to exercise the Rights will terminate and the only right of the holders of
Rights will be to receive the redemption price.
The terms of the Rights may be amended by a resolution of the Board of
Directors without the consent of the holders of the Rights, except that after a
person or group becomes an Acquiring Person, no such amendment may adversely
affect the interests of the holders of the Rights (other than an Acquiring
Person). Pursuant to the Merger Agreement, the Rights may not be redeemed, and
the terms of the Rights and of the Rights Agreement may not be amended, modified
or terminated, unless and until the Board of Directors changes its
recommendation to the stockholders of the Company that such stockholders approve
the transactions contemplated by the Merger Agreement.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form 8-A filed
June 11, 2003. A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is deemed to be incorporated into this summary.
3
EXHIBIT C
FORM OF RIGHT CERTIFICATE
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER __________, 2013, OR EARLIER IF REDEMPTION OR
EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT $0.000001 PER
RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
RIGHT CERTIFICATE
HANDSPRING, 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 [__], 2003 (the "RIGHTS AGREEMENT"), between
Handspring, Inc., a Delaware corporation (the "COMPANY"), and EquiServe Trust
Company, N.A. (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., Pacific Time, on June 5, 2013 at the office of the
Rights Agent, or at the office of its successor as Rights Agent, one
one-thousandth of a fully paid non-assessable share of Series A Junior
Participating Preferred Stock, par value $0.001 per share (the "PREFERRED
SHARES"), of the Company, at a purchase price of ____________ per one
one-thousandth of a Preferred Share (the "PURCHASE PRICE"), upon presentation
and surrender of this Right Certificate with the Certification and the Form of
Election to Purchase duly executed. The number of Rights evidenced by this Right
Certificate (and the number of one one-thousandths of a Preferred Share that may
be purchased upon exercise hereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of __________, based on the
Preferred Shares as constituted at such date. As provided in the Rights
Agreement, the Purchase Price and the number of one one-thousandths of a
Preferred Share that may be purchased upon the exercise of the Rights evidenced
by this Right Certificate are subject to modification and adjustment upon the
happening of certain events.
This Right Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates. Copies of
the Rights Agreement are on file at the principal executive offices of the
Company and the above-mentioned offices of the Rights Agent.
This Right Certificate, with or without other Right Certificates, upon
surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Preferred Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If this
Right Certificate shall
1
be exercised in part, the holder shall be entitled to receive upon surrender
hereof another Right Certificate or Right Certificates for the number of whole
Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate (i) may be redeemed by the Company at a redemption price of
$0.000001 per Right or (ii) may be exchanged in whole or in part for Preferred
Shares or shares of the Company's Common Stock, par value $0.001 per share.
No fractional Preferred Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions that are integral
multiples of one one-thousandth of a Preferred Share, which may, at the election
of the Company, be evidenced by depository receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of the Preferred Shares or of
any other securities of the Company that may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in the Rights
Agreement), or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the Company and
its corporate seal.
Dated as of _______________________
ATTEST:
HANDSPRING, INC.
By: _______________________________ By: _______________________________
Countersigned:
EQUISERVE TRUST COMPANY, N.A.
By: _______________________________
Authorized Signature
2
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED ___________________________________ hereby sells,
assigns and transfers unto ___________________________________________________
(Please print name and address of transferee) this Right Certificate, together
with all right, title and interest therein, and does hereby irrevocably
constitute and appoint __________________________________________________,
Attorney, to transfer the within Right Certificate on the books of the
within-named Company, with full power of substitution.
Dated: ______________________
_________________________________
Signature
Signature(s) Guaranteed:
SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15
______________________________________
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement).
_________________________________
Signature
Form of Reverse Side of Right Certificate--continued
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To _______________________:
The undersigned hereby irrevocably elects to exercise _____________ Rights
represented by this Right Certificate to purchase the Preferred Shares issuable
upon the exercise of such Rights and requests that certificates for such
Preferred Shares be issued in the name of:
Please insert social security
or other identifying number_______________________
__________________________________________________
(Please print name and address)
__________________________________________________
__________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number_______________________
__________________________________________________
(Please print name and address)
__________________________________________________
__________________________________________________
Dated: _____________________________________
_________________________________
Signature
Signature(s) Guaranteed:
SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15
Form of Reverse Side of Right Certificate--continued
------------------------------------------------
The undersigned hereby certifies that the Rights evidenced by this Right
Certificate are not beneficially owned by an Acquiring Person or an Affiliate or
Associate thereof (as such terms are defined in the Rights Agreement).
----------------------------
Signature
------------------------------------------------
NOTICE
The signature in the foregoing Forms of Assignment and Election must
conform to the name as written upon the face of this Right Certificate in every
particular, without alteration or any change whatsoever.
In the event the certification set forth above in the Form of Assignment
or the Form of Election to Purchase, as the case may be, is not completed, the
Company and the Rights Agent will deem the beneficial owner of the Rights
evidenced by this Right Certificate to be an Acquiring Person or an Affiliate or
Associate thereof (as defined in the Rights Agreement) and such Assignment or
Election to Purchase will not be honored.
