_________________________________________________________________
STARTEC GLOBAL COMMUNICATIONS CORPORATION
AND
CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
AS RIGHTS AGENT
RIGHTS AGREEMENT
----------------
DATED AS OF MARCH 26, 1998
_________________________________________________________________
TABLE OF CONTENTS
Page
SECTION 1. CERTAIN DEFINITIONS . . . . . . . . . . . . .
SECTION 2. APPOINTMENT OF RIGHTS AGENT . . . . . . . . .
SECTION 3. ISSUE OF RIGHTS CERTIFICATES. . . . . . . . .
SECTION 4. FORM OF RIGHTS CERTIFICATES . . . . . . . . .
SECTION 5. COUNTERSIGNATURE AND REGISTRATION . . . . . .
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE
OF RIGHTS CERTIFICATES; MUTILATED, DESTROYED,
LOST OR STOLEN RIGHTS CERTIFICATES. . . . . .
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE;
EXPIRATION DATE OF RIGHTS . . . . . . . . . .
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS
CERTIFICATES. . . . . . . . . . . . . . . . .
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL
STOCK . . . . . . . . . . . . . . . . . . . .
SECTION 10. PREFERRED STOCK RECORD DATE . . . . . . . . .
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER
AND KIND OF SHARES OR NUMBER OF RIGHTS. . . .
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR
NUMBER OF SHARES. . . . . . . . . . . . . . .
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER
OF ASSETS OR EARNING POWER. . . . . . . . . .
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES . . .
SECTION 15. RIGHTS OF ACTION. . . . . . . . . . . . . . .
SECTION 16. AGREEMENT OF RIGHTS HOLDERS . . . . . . . . .
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A
STOCKHOLDER . . . . . . . . . . . . . . . . .
SECTION 18. DUTIES OF RIGHTS AGENT. . . . . . . . . . . .
SECTION 19. COMPENSATION AND INDEMNIFICATION OF THE
RIGHTS AGENT. . . . . . . . . . . . . . . . .
SECTION 20. MERGER OR CONSOLIDATION OR CHANGE OF
NAME OF RIGHTS AGENT. . . . . . . . . . . . .
SECTION 21. CHANGE OF RIGHTS AGENT. . . . . . . . . . . .
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES . . . . .
SECTION 23. REDEMPTION. . . . . . . . . . . . . . . . . .
SECTION 24. EXCHANGE. . . . . . . . . . . . . . . . . . .
SECTION 25. NOTICE OF CERTAIN EVENTS. . . . . . . . . . .
SECTION 26. NOTICES . . . . . . . . . . . . . . . . . . .
SECTION 27. SUPPLEMENTS AND AMENDMENTS. . . . . . . . . .
SECTION 28. SUCCESSORS. . . . . . . . . . . . . . . . . .
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD,
ETC.. . . . . . . . . . . . . . . . . . . . .
SECTION 30. BENEFITS OF THIS AGREEMENT. . . . . . . . . .
SECTION 31. SEVERABILITY. . . . . . . . . . . . . . . . .
SECTION 32. GOVERNING LAW . . . . . . . . . . . . . . . .
SECTION 33. COUNTERPARTS. . . . . . . . . . . . . . . . .
SECTION 34. DESCRIPTIVE HEADINGS. . . . . . . . . . . . .
SHAREHOLDER RIGHTS AGREEMENT
Shareholder Rights Agreement, dated as of March 26, 1998
(the "Agreement"), between Startec Global Communications
Corporation, a Maryland corporation (the "Company"), and
Continental Stock Transfer & Trust Company, a New York company
(the "Rights Agent").
WHEREAS, on March 26, 1998 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Company authorized and
declared a dividend of one Right for each share of Common Stock
(as hereinafter defined) of the Company outstanding at the Close
of Business (as defined herein) on the Record Date (as defined
herein), and has authorized the issuance of one Right with
respect to each share of Common Stock of the Company issued
between the Record Date (whether originally issued or delivered
from the Company's treasury) and the Distribution Date (as
hereinafter defined), each Right initially representing the right
to purchase one-thousandth of a share of Series A Junior
Participating Preferred Stock of the Company having the rights,
powers and preferences set forth in the form of Certificate of
Designation, Preferences and Rights attached hereto as Exhibit A,
upon the terms and subject to the conditions hereinafter set
forth.
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein set forth, the parties hereby agree as
follows:
SECTION 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms have the
meanings indicated:
(a) "Acquiring Person" shall mean any Person (as such term
is hereinafter defined) who or which, together with all
Affiliates and Associates (as such terms are hereinafter defined)
of such Person, shall be the Beneficial Owner (as such term is
hereinafter defined) of 10% or more of the shares of Common Stock
then outstanding, but shall not include an Exempt Person (as
hereinafter defined).
(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 hereinafter
defined).
(c) A Person shall be deemed the "Beneficial Owner" of and
shall be deemed to "beneficially own" any securities: (i) which
such Person or any of such Person's Affiliates or Associates,
directly or indirectly, owns or has the right to acquire (whether
such right is exercisable immediately or only after the passage
of time) pursuant to any agreement, arrangement or understanding
(whether or not in writing), or upon the exercise of conversion
rights, exchange rights, other rights (other than these Rights),
warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the "Beneficial Owner" of, or to
"beneficially own", (A) securities tendered pursuant to a tender
or exchange offer made by or on behalf of such Person or any of
such Person's Affiliates or Associates until such tendered
securities are accepted for purchase or exchange; or (B)
securities issuable upon exercise of Rights at any time prior to
the occurrence of a Triggering Event (as defined hereinafter), or
(C) securities issuable upon exercise of Rights from and after
the occurrence of a Triggering Event which Rights were acquired
by such Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 hereof (the "Original Rights") or pursuant to Section
11(i) hereof in connection with an adjustment made with respect
to any Original Rights; (ii) which such Person or any of such
Person's Affiliates or Associates, directly or indirectly, has
the right to vote or dispose of or has "beneficial ownership" of
(as determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding, whether or not in
writing; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to beneficially own, any security under
this subparagraph (ii) as a result of an agreement, arrangement
or understanding to vote such security if such agreement,
arrangement or understanding: (A) arises solely from a revocable
proxy given in response to a public proxy or consent solicitation
made pursuant to, and in accordance with, the applicable
provisions of the General Rules and Regulations under the
Exchange Act, and (B) is not also then reportable by such Person
on Schedule 13D under the Exchange Act (or any comparable or
successor report); or (iii) which are beneficially owned,
directly or indirectly, by any other Person (or any Affiliate or
Associate thereof) with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy
as described in the proviso to subparagraph (ii) of this
paragraph (c)) or disposing of any voting securities of the
Company; provided, however, that nothing in this paragraph (c)
shall cause a Person engaged in business as an underwriter of
securities to be the "Beneficial Owner" of, or to "beneficially
own," any securities acquired through such Person's participation
in good faith in a firm commitment underwriting until the
expiration of forty days after the date of such acquisition.
(d) "Board" shall mean the Board of Directors of the
Company.
(e) "Business Day" shall mean any day other than a Saturday,
Sunday, or a day on which banking or trust institutions in the
State of New York are authorized or obligated by law or executive
order to close.
(f) "Close of Business" on any given date shall mean 5:00
P.M., New York City time, on such date; provided, however, that
if such date is not a Business Day it shall mean 5:00 P.M., New
York City time, on the next succeeding Business Day.
(g) "Common Stock" when used with reference to the Company
shall mean the shares of common stock, par value $.01 per share,
of the Company. "Common Stock" when used with reference to any
Person other than the Company shall mean the class of capital
stock with the greatest aggregate voting power, or the class of
equity securities or other equity interests having power to
control or direct the management, of such Person.
(h) "Company" shall mean Startec Global Communications
Corporation, a Maryland corporation.
(i) "Continuing Director" shall mean (i) any member of the
Board, while such Person is a member of the Board, who is not an
Acquiring Person, or an Affiliate or Associate of an Acquiring
Person, or a representative of any Acquiring Person or of any
such Affiliate or Associate, and was a member of the Board as of
the date of this Agreement, or (ii) any Person who subsequently
becomes a member of the Board, while such Person is a member of
the Board, who is not an Acquiring Person, or an Affiliate or
Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, if such
Person's nomination for election or election to the Board is
recommended or approved by a majority of the Continuing
Directors.
(j) "Distribution Date" shall mean the earlier of (i) the
Close of Business on the tenth day after the Stock Acquisition
Date (or, if the tenth day after the Stock Acquisition Date
occurs before the Record Date, the Close of Business on the
Record Date), or (ii) the Close of Business on the tenth Business
Day (or, if such tenth Business Day occurs before the Record
Date, the Close of Business on the Record Date), or such
specified or unspecified later date on or after the Record Date
as may be determined by action of a majority of the Continuing
Directors, after the date that a tender or exchange offer by any
Person (other than the Company, any Subsidiary of the Company or
any employee benefit plan of the Company or of any Subsidiary of
the Company or any Person holding shares of Common Stock for or
pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General
Rules and Regulations under the Exchange Act, if upon
consummation thereof, such Person would be the beneficial owner
of 10% or more of the outstanding shares of Common Stock.
(k) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, as in effect on the date of this Agreement.
(l) "Exchange Date" shall have the meaning set forth in
Section 7(a) hereof.
(m) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan or
employee stock plan of the Company or of any Subsidiary of the
Company, (iv) any Person or entity organized, appointed,
established or holding Common Stock of the Company by, for or
pursuant to the terms of any employee benefit plan or employee
stock plan, (v) a Person who, together with its Affiliates and
Associates, becomes the Beneficial Owner of 10% or more of the
shares of Common Stock of the Company then outstanding solely as
a result of a reduction in the number of shares of Common Stock
of the Company outstanding due to the repurchase of shares of
Common Stock of the Company by the Company, unless and until such
time as such Person shall purchase or otherwise become (as a
result of actions taken by such Person or its Affiliates or
Associates) the Beneficial Owner of additional shares of Common
Stock of the Company constituting 1% or more of the then
outstanding shares of Common Stock of the Company, or (vi) Ram
Xxxxxxx, who is Chairman, President and Chief Executive Officer
of the Company as of the date hereof, members of his immediate
family living in the same household with him, partnerships,
corporations, limited liability companies, or other entities, all
the equity of which is owned by Ram Xxxxxxx or members of his
immediately family living in the same household with him, or
trusts, the beneficial interest of which is held by Ram Xxxxxxx
or members of his immediately family living in the same household
with him, regardless of the acquisition by any such Persons of
Beneficial Ownership of additional shares of Common Stock;
provided, however, that, after the date hereof, that Ram Xxxxxxx,
members of his immediate family living in the same household with
him, and any partnership, corporation, limited liability company,
other entity or trust described in this clause (vi) shall
individually or collectively be an "Acquiring Person" if, in
addition to the shares of Common Stock collectively owned by them
on the date hereof, they acquire in the aggregate more than five
percent (5%) of the shares of Common Stock then outstanding
(excluding from such 5% limitation shares of Common Stock
acquired or to be acquired, pursuant to any employee benefit
plan, compensation plan or incentive plan of the Company or any
Subsidiary of the Company); Provided, further that, such 5%
limitation shall not limit the right of Ram Xxxxxxx, members of
his immediate family living in the same household with him, or
any partnership, corporation, limited liability company, other
entity or trust described in this clause (vi) to become the
Beneficial Owner or Beneficial Owner(s) of 10% of the shares of
Common Stock then outstanding in the event that he, they or it
are ever the Beneficial Owner or Beneficial Owner(s) of less than
10% of the share of Common Stock then outstanding.
(n) "Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
(o) "Final Expiration Date" shall have the meaning set forth
in Section 7(a) hereof.
(p) "Outside Directors" shall mean the Continuing Directors
who are not officers of the Company.
(q) "Person" shall mean any individual, firm, corporation,
partnership or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(r) "Preferred Stock" shall mean shares of Series A Junior
Participating Preferred Stock of the Company.
(s) "Principal Party" shall have the meaning set forth in
Section 13(b) hereof.
(t) "Purchase Price" shall have the meaning set forth in
Section 4(a) and 11(a)(ii) hereof.
(u) "Record Date" shall mean the close of business on April
3, 1998.
(v) "Redemption Period" shall have the meaning set forth in
Section 23(a) hereof.
(w) "Rights Agent" shall mean Continental Stock Transfer &
Trust Company, a New York corporation.
(x) "Rights Certificate" shall have the meaning set forth in
Section 3(d) hereof.
(y) "Rights Dividend Declaration Date" shall mean the close
of business on March 26, 1998.
(z) "Section 11(a)(ii) Event" shall mean any event described
in Section 11(a)(ii) hereof.
(aa) "Section 13 Event" shall mean any event described in
clauses (x), (y) or (z) of Section 13(a) hereof.
(bb) "Securities Act" shall mean the Securities Act of 1933,
as amended, and as in effect on the date of this Agreement.
(cc) "Stock Acquisition Date" shall mean the first date of
public announcement (which, for purposes of this definition,
shall include, without limitation, a report filed pursuant to
Section 13(d) of the Exchange Act) by the Company or an Acquiring
Person that an Acquiring Person has become such.
(dd) "Subsidiary" of any Person shall mean any corporation
or other entity of which a majority of the voting power of the
voting equity securities or equity interests is owned, directly
or indirectly, by such Person, or is otherwise controlled by such
Person.
(ee) "Triggering Event" shall mean any Section 11(a)(ii)
Event or any Section 13 Event.
SECTION 2. APPOINTMENT OF RIGHTS AGENT.
The Company has appointed the Rights Agent to act as agent
for the Company and the holders of the Rights (who, in accordance
with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock of 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 in
no event shall be liable for, the acts or omissions of any such
Co-Rights Agent. In the event that the Company appoints one or
more Co-Rights Agents, the respective duties of the Rights Agent
and any Co-Rights Agents shall be as the Company shall determine,
and any actions which may be taken by the Rights Agent pursuant
to the terms of this Agreement may be taken by any such Co-Rights
Agent.
SECTION 3. ISSUE OF RIGHTS CERTIFICATES.
(a) As promptly as practicable following the Record Date,
the Company will send or deliver a copy of a Summary of Rights to
Purchase Preferred Stock, in substantially the form attached
hereto as Exhibit B (the "Summary of Rights"), to each record
holder of Common Stock as of the Close of Business on the Record
Date at the address of such holder shown on the records of the
Company. With respect to certificates for shares of Common Stock
outstanding as of the Record Date, until the Distribution Date,
the Rights will be evidenced by such certificates for the Common
Stock and the registered holders of the Common Stock shall also
be the registered holders of the associated Rights. Until the
Distribution Date (or the earlier Expiration Date or Final
Expiration Date), the transfer of any certificate representing
shares of Common Stock in respect of which Rights have been
issued shall also constitute the transfer of the Rights
associated with the shares of Common Stock represented thereby.
(b) Rights shall be issued in respect of all shares of
Common Stock issued (whether originally issued or from the
Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date or the Expiration Date or the
Final Expiration Date. Rights shall also be issued to the extent
provided in Section 22 in respect of all shares of Common Stock
which are issued (whether originally issued or from the Company's
treasury) after the Distribution Date and prior to the Expiration
Date. Certificates representing such shares of Common Stock
shall also be deemed to be certificates for Rights, and shall
bear the following legend (in addition to any other legends that
may be required):
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in a Rights
Agreement between Startec Global Communications
Corporation (the "Company") and Continental Stock
Transfer & Trust Company (the "Rights Agent"), dated as
of March 26, 1998 (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 as in effect on the date
of mailing without charge after receipt of a written
request therefor. Under certain circumstances set
forth in the Rights Agreement, Rights issued to, or
held by, any Person who is, was or becomes an Acquiring
Person or any Affiliate or Associate thereof (as such
terms are defined in the Rights Agreement), whether
currently held by or on behalf of such Person or by any
subsequent holder, may become null and void. The
Rights shall not be exercisable, and shall be null and
void so long as held, by a holder in any jurisdiction
where the requisite qualification of the issuance to
such holder, or the exercise by such holder, of the
Rights in such jurisdiction shall not have been
obtained or be obtainable.
With respect to such certificates containing the foregoing
legend, until the earlier of (i) the Distribution Date or (ii)
the Expiration Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such
certificates alone and registered holders of Common Stock shall
also be the registered holders of the associated Rights, and the
transfer of any such certificate shall also constitute the
transfer of the Rights associated with the Common Stock
represented thereby.
(c) Until the Distribution Date (i) the Rights will be
evidenced (subject to the provisions of paragraph (a) of this
Section 3) by the certificates for Common Stock registered in the
names of the holders thereof (which certificates for Common Stock
shall also be deemed to be Rights Certificates) and not by
separate Rights Certificates, and (ii) the Rights will be
transferable only in connection with the transfer of the
underlying shares of Common Stock (including a transfer to the
Company).
(d) As soon as practicable after the Distribution Date, the
Rights Agent upon notification thereof and delivery to it of a
list of holders of Common Stock will send by first-class,
insured, postage prepaid mail, to each record holder of Common
Stock as of the Close of Business on the Distribution Date, at
the address of such holder shown on the records of the Company, a
rights certificate, in substantially the form of Exhibit C hereto
(the "Rights Certificate"), evidencing one Right for each share
of Common Stock so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights
per share of Common Stock has been made pursuant to Section 11
hereof, at the time of distribution of the Rights Certificates,
the Company shall make necessary and appropriate rounding
adjustments (in accordance with Section 14(a) hereof) so that
Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights.
As of and after the Distribution Date, the Rights will be
evidenced solely by such Right Certificates.
SECTION 4. FORM OF RIGHTS CERTIFICATES.
(a) The Rights Certificates (and the forms of election to
purchase and of assignment to be printed on the reverse thereof)
shall be substantially the same as Exhibit C hereto and may have
such marks of identification or designation and such legends,
summaries or endorsements printed thereon as the Company may deem
appropriate and which do not affect the 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 provisions of Section 11 and
Section 22 hereof, the Rights Certificates, whenever issued,
shall be dated as of the Record Date, and on their face shall
entitle the holders thereof to purchase such number of one
one-thousandths of a share of Preferred Stock as shall be set
forth therein at the price set forth therein (such exercise price
per one one-thousandth of a share, the "Purchase Price"), but the
amount and type of securities purchasable upon exercise of each
Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(d)
or Section 22 hereof that represents Rights beneficially owned
by: (i) an Acquiring Person or any Associate or Affiliate of an
Acquiring Person; (ii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such; or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which a majority of the
Continuing Directors has determined is part of an agreement,
arrangement or understanding which has as a primary purpose or
effect avoidance of Section 7(e) hereof and provided that the
Company shall have notified the Rights Agent that this Section
4(b) applies, any Rights Certificate issued pursuant to Section 6
or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this
sentence, shall contain (to the extent feasible) the following
legend:
The Rights represented by this Rights Certificate are
or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person (as such terms are defined in
the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may
become null and void in the circumstances specified in
Section 7(e) of such Rights Agreement.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board or President either
manually or by facsimile signature, and have affixed thereto the
Company's seal or a facsimile thereof which shall be attested by
the Secretary or an Assistant Secretary of the Company, either
manually or by facsimile signature. The Rights Certificates
shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless so countersigned. In case any
officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by
the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent, and issued and delivered by
the Company with the same force and effect as though the person
who signed such Rights Certificates had not ceased to be such
officer of the Company; and any Rights Certificate may be signed
on behalf of the Company by any person who, at the actual date of
the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although
at the date of the execution of this Rights Agreement any such
person was not such an officer.
(b) Following the Distribution Date and receipt by the
Rights Agent of the list of holders of Common Stock of the
Company, the Rights Agent will keep or cause to be kept, at its
principal office or at offices designated as the appropriate
place for surrender of Rights Certificates upon exercise or
transfer, books for registration and transfer of the Rights
Certificates issued hereunder. Such books shall show the names
and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each
of the Rights Certificates and the date of each of the Rights
Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF
RIGHTS CERTIFICATES; MUTILATED, DESTROYED, LOST OR
STOLEN RIGHTS CERTIFICATES.
(a) Subject to the provisions of Section 4(b), Section 7(e)
and Section 14 hereof, at any time after the Close of Business on
the Distribution Date, and at or prior to the Close of Business
on the earlier of the Expiration Date or Final Expiration Date,
any Rights Certificate or Certificates may be transferred, split
up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like
number of one one-thousandths of a share of Preferred Stock (or
following a Triggering Event, Common Stock, other securities,
cash, or other assets, as the case may be) as the Rights
Certificate or Certificates surrendered then entitled such holder
(or former holder in the case of a transfer) to purchase. Any
registered holder desiring to transfer, split up, combine or
exchange any Rights Certificate shall make such request in
writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up,
combined or exchanged at the office of the Rights Agent
designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with
respect to the transfer of any such surrendered Rights
Certificate until the registered holder shall have properly
completed and signed the certificate contained in the form of
assignment on the reverse side of such Rights Certificate and
shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b),
Section 7(e) and Section 14 hereof, countersign and deliver to
the Person entitled thereto a Rights Certificate or Certificates,
as the case may be, as so requested. The Company may require
payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split
up, combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case
of loss, theft or destruction, of indemnity or security
satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the
Rights Agent and cancellation of the Rights Certificate if
mutilated, the Company will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of
the Rights Certificate so lost, stolen, destroyed, or mutilated.
SECTION 7. EXERCISE OF RIGHTS; PURCHASE PRICE; EXPIRATION
DATE OF RIGHTS.
(a) Subject to Section 7(e) hereof, the registered holder of
any Rights Certificate may exercise the Rights evidenced thereby
(except as otherwise provided herein including, without
limitation, the restrictions on exercisability set forth in
Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in
whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly and
properly executed, to the Rights Agent at the office of the
Rights Agent designated for such purpose, together with payment
of the Purchase Price for each one one-thousandth of a share of
Preferred Stock (or other securities, cash or other assets, as
the case may be) as to which the Rights are exercised, at or
prior to the earlier of (i) the close of business on March 25,
2008 (the "Final Expiration Date"), (ii) the time at which the
Rights are redeemed as provided in Section 23 hereof, (iii) the
time at which such Rights are exchanged (the "Exchange Date") as
provided in Section 24 hereof, or (iv) the time at which the
Rights expire pursuant to Section 13(d) hereof (the earliest of
(i), (ii), (iii) and (iv) being herein referred to as the
"Expiration Date").
(b) Each Right shall entitle the registered holder thereof
to purchase one one-thousandth of a share of Preferred Stock, and
the Purchase Price for each one one-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall
initially be $175.00, and shall be subject to adjustment from
time to time as provided in Sections 11 and 13 hereof and shall
be payable in lawful money of the United States of America in
accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly and properly executed, accompanied by payment,
with respect to each Right so exercised, of the Purchase Price
per one one-thousandth of a share of Preferred Stock (or Common
Stock, other securities, cash or other assets, as the case may
be) to be purchased and an amount equal to any applicable
transfer tax or governmental charge in cash, or by certified
check, cashier's check or bank draft payable to the order of the
Company, the Rights Agent shall, subject to Section 18(j) hereof,
thereupon promptly (i) (A) requisition from any transfer agent of
the shares of Preferred Stock (or make available, if the Rights
Agent is the transfer agent) certificates for the total number of
one one-thousandths of a share of Preferred Stock to be purchased
and the Company hereby irrevocably authorizes its transfer agent
to comply with all such requests, or (B) if the Company shall
have elected to deposit the total number of shares of Preferred
Stock issuable upon exercise of the Rights hereunder with a
depositary agent, requisition from the depositary agent
depositary receipts representing such number of one
one-thousandths of a share of Preferred Stock as are to be
purchased (in which case certificates for the shares of Preferred
Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company will
direct the depositary to comply with such request, (ii)
requisition from the Company the amount of cash, if any, to be
paid in lieu of issuance of fractional shares in accordance with
Section 14, (iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon
the order of the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such
holder and (iv) after receipt thereof, promptly deliver such
cash, if any, to or upon the order of the registered holder of
such Rights Certificate. In the event that the Company is
obligated to issue other securities (including Common Stock) of
the Company, pay cash and/or distribute other property pursuant
to Section 11(a) hereof, the Company will make all arrangements
necessary so that such securities, cash and/or other property are
available for distribution by the Rights Agent, if and when
necessary to comply with this Agreement.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section 6
and Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the first occurrence of a Section
11(a)(ii) Event, any Rights beneficially owned by (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring
Person, (ii) a transferee of an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the
Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which a majority of the
Continuing Directors has determined is part of an agreement,
arrangement or understanding which has as a primary purpose or
effect the avoidance of this Section 7(e), shall become null and
void without any further action, and no holder of such Rights
shall have any rights whatsoever with respect to such Rights,
whether under any provision of this Agreement or otherwise. The
Company shall notify the Rights Agent when this Section 7(e)
applies and shall use all reasonable efforts to ensure that the
provisions of this Section 7(e) and Section 4(b) hereof are
complied with, but neither the Company nor the Rights Agent shall
have any liability to any holder of Rights Certificates or other
Person as a result of the Company's failure to make any
determinations with respect to an Acquiring Person or its
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be
obligated to undertake any action with respect to a registered
holder upon the occurrence of any purported exercise as set forth
in this Section 7 unless such registered holder shall have (i)
properly completed and signed the certificate contained in the
form of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and (ii)
provided such additional evidence of the identity of the
Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company or the Rights Agent shall
reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHTS CERTIFICATES.
All Rights Certificates surrendered for the purpose of
exercise, transfer, split up, combination or exchange shall, if
surrendered to the Company or to any of its agents, be delivered
to the Rights Agent for cancellation or in canceled form, or, if
surrendered to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any provisions of this Rights Agreement.
The Company shall deliver to the Rights Agent for cancellation
and retirement, and the Rights Agent shall so cancel and retire,
any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall
deliver all canceled Rights Certificates to the Company, or
shall, at the written request of the Company, destroy such
canceled Rights Certificates, and in such case shall deliver a
certificate of destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF CAPITAL STOCK.
(a) The Company covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued
shares of Preferred Stock (and following the occurrence of a
Triggering Event, out of its authorized and unissued shares of
Common Stock and/or other securities or out of its authorized and
issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering
Event, shares of Common Stock and/or other securities) that, as
provided in this Agreement, including Section 11(a)(iii) hereof,
will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) In the event the shares of Preferred Stock (and,
following the occurrence of a Triggering Event, Common Stock
and/or other securities) issuable upon the exercise of Rights
become listed on any national securities exchange, the Company
shall use its best efforts to cause, from and after such time as
the Rights become exercisable, all shares reserved for such
issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as
soon as practicable following the earliest date after the first
occurrence of a Section 11(a)(ii) Event on which the
consideration to be delivered by the Company upon exercise of the
Rights has been determined in accordance with this Agreement, 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 Expiration Date. The Company will also
take such action as may be appropriate under, or to ensure
compliance with, the securities or "blue sky" laws of the various
states in connection with the exercisability of the Rights. The
Company may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the exercisability of
the Rights in order to prepare and file such registration
statement and permit it to become effective. In addition, if the
Company shall determine that a registration statement is required
following the Distribution Date, the Company may temporarily
suspend the exercisability of the Rights until such time as a
registration statement has been declared effective. Upon any
suspension of exercisability of Rights referred to in this
Section 9(c), the Company shall issue a public announcement (with
prompt notice thereof to the Rights Agent) stating that the
exercisability of the Rights has been temporarily suspended, as
well as a public announcement (with prompt notice thereof to the
Rights Agent) at such time as the suspension is no longer in
effect. Notwithstanding any provision of this Agreement to the
contrary, the Rights shall not be exercisable and shall be null
and void so long as held by a holder in any jurisdiction where
the requisite qualification to the issuance to such holder, or
the exercise by such holder, of the Rights in such jurisdiction
shall not have been obtained or be obtainable, or the exercise
thereof shall not be permitted under applicable law or a
registration statement shall not have been declared effective.
(d) The Company covenants and agrees that it will take all
such action as may be necessary to ensure that all one
one-thousandths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and non-assessable.
(e) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the issuance
or delivery of the Rights Certificates or of any certificates for
a number of one one-thousandths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) upon
the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax or charge which may be payable
in respect of any transfer or delivery of Rights Certificates to
a Person other than, or the issuance or delivery of certificates
for a number of one one-thousandths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be) in
a name other than that of, the registered holder of the Rights
Certificate evidencing Rights surrendered for exercise or to
issue or deliver any certificates for a number of one
one-thousandths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in a name other than
that of the registered holder upon the exercise of any Rights
until any such tax or charge shall have been paid (any such tax
or charge being payable by the holder of such Rights Certificate
at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax or charge is due.
SECTION 10. PREFERRED STOCK RECORD DATE.
Each Person in whose name any certificate for a number of
one one-thousandths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) is issued upon
the exercise of Rights shall for all purposes be deemed to have
become the holder of record of such fractional shares of
Preferred Stock (or Common Stock and/or other securities, as the
case may be) represented thereby on, and such certificate shall
be dated, the date upon which the Rights Certificate evidencing
such Rights was duly surrendered and payment of the Purchase
Price (and any applicable transfer taxes and charges) was made;
provided, however, that if the date of such surrender and payment
is a date upon which the Preferred Stock (or Common Stock and/or
other securities as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become
the record holder of such shares (fractional or otherwise) on,
and such certificate shall be dated, the next succeeding Business
Day on which the Preferred Stock (or Common Stock and/or other
securities as the case may be) transfer books of the Company are
open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any
rights of a stockholder of the Company with respect to shares for
which the Rights shall be exercisable, including, without
limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not
be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF
SHARES OR NUMBER OF RIGHTS.
The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred
Stock payable in shares of Preferred Stock, (B) subdivide the
outstanding Preferred Stock, (C) combine the outstanding
Preferred Stock into a smaller number of shares or (D) issue any
shares of its capital stock in a reclassification of the
Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the Company is
the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of
shares of Preferred Stock or the number and kind of shares of
capital stock issuable on such date, as the case may be, shall be
proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon
payment of the aggregate adjusted Purchase Price then in effect
necessary to exercise a Right in full, the aggregate number and
kind of shares of Preferred Stock or the number and kind of
shares of capital stock, as the case may be, which, if such Right
had been exercised immediately prior to such date and at a time
when the Preferred Stock (or other capital stock, as the case may
be) transfer books of the Company were open, he would have owned
upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination, or reclassification. If an
event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment
provided for in this Section 11(a)(i) shall be in addition to,
and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii) hereof.
(ii) Subject to Sections 23 and 24 of this Agreement, in the
event that any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person organized, appointed or
established by the Company for or pursuant to the terms of any
such plan), alone or together with its Affiliates and Associates,
shall, at any time after the Rights Dividend Declaration Date,
become an Acquiring Person, unless the event causing such Person
to become an Acquiring Person is a transaction set forth in
Section 13(a) hereof, or is an acquisition of shares of Common
Stock pursuant to a cash tender offer made pursuant to Section
14(d) of the Exchange Act for all outstanding shares of Common
Stock (other than shares of Common Stock beneficially owned by
the Person making the offer or by its Affiliates or Associates)
at a price and on terms determined by at least a majority of the
Outside Directors, after receiving advice from one or more
investment banking firms, to be (a) at a price which is fair to
stockholders (taking into account all factors which such members
of the Board deem relevant including, without limitation, prices
which could reasonably be achieved if the Company or its assets
were sold on an orderly basis designed to realize maximum value)
and (b) otherwise in the best interests of the Company and its
stockholders, proper provision shall be made so that promptly
following the Redemption Period (as defined in Section 23(a)),
each holder of a Right (except as provided below and in Section
7(e) hereof) shall thereafter have the right to receive, upon
exercise thereof and payment of an amount equal to the then
current Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-thousandths of a share
of Preferred Stock, such number of shares of Common Stock of the
Company as shall equal the result obtained by (x) multiplying the
then current Purchase Price by the then number of one
one-thousandths of a share of Preferred Stock for which a Right
was or would have been exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, whether or not such
Right was then exercisable, and (y) dividing that product (which,
following such first occurrence, shall thereafter be referred to
as the "Purchase Price" for each Right and for all purposes of
this Agreement except to the extent set forth in Section 13
thereof) by 50% of the current market price per share of Common
Stock (determined pursuant to Section 11(d) hereof) on the date
of such first occurrence (such number of shares, the "Adjustment
Shares").
(iii) The Company may at its option substitute for a share
of Common Stock issuable upon the exercise of Rights in
accordance with the foregoing subparagraph (ii) such number or
fractions of shares of Preferred Stock having an aggregate market
value equal to the current per share market price of a share of
Common Stock. In the event that the number of shares of Common
Stock which is authorized by the Company's Amended and Restated
Articles of Incorporation, but not outstanding, or reserved for
issuance for purposes other than upon exercise of the Rights, is
not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii), the Board shall
(acting by at least a majority of the Continuing Directors), to
the extent permitted by applicable law and by material agreements
then in effect to which the Company is a party, (A) determine the
excess of (1) the value of the Adjustment Shares issuable upon
the exercise of a Right (the "Current Value") over (2) the
Purchase Price (such excess, the "Spread"), and (B) with respect
to each Right (subject to Section 7(e) hereof), make adequate
provision to substitute for some or all of the Adjustment Shares,
upon exercise of a Right and payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3)
Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of
Preferred Stock which the Board has deemed to have the same value
as shares of Common Stock) (such shares of equity securities
being herein called "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 based upon the advice of an investment banking firm
selected by the Board; provided, however, if the Company shall
not have made adequate provision to deliver value pursuant to
clause (B) above within thirty (30) days following the later of
(x) the first occurrence of a Section 11(a)(ii) Event and (y) the
date on which the Company's right of redemption pursuant to
Section 23(a) expires (the later of (x) and (y) being referred to
herein as the "Section 11(a)(ii) Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of
a Right and without requiring payment of the Purchase Price,
shares of Common Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value
equal to the Spread.
If, upon the occurrence of a Section 11(a)(ii) Event, the
Board shall determine in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized
for issuance upon exercise in full of the Rights, then if the
Board so elects, 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 action is to be
taken pursuant to the preceding provisions of this Section
11(a)(iii), the Company (x) shall provide, subject to Section
7(e) hereof, that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order
to seek any authorization of additional shares and/or to decide
the appropriate form of distribution to be made pursuant to the
first sentence of this Section 11(a)(iii) and to determine the
value thereof. In the event of any such suspension, the Company
shall issue a public announcement (with prompt notice thereof to
the Rights Agent) stating that the exercisability of the Rights
has been temporarily suspended, as well as a public announcement
(with prompt notice thereof to the Rights Agent) at such time as
the suspension is no longer in effect. For purposes of this
Section 11(a)(iii), the value of the Common Stock shall be the
current market price (as determined pursuant to Section 11(d)
hereof) per share of the Common Stock 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 Stock on such
date. The Board may, but shall not be required to, establish
procedures to allocate the right to receive shares of Common
Stock upon the exercise of the Rights among holders of Rights
pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the
issuance of rights, options or warrants to all holders of
Preferred Stock entitling them (for a period expiring within
forty-five (45) calendar days after such record date) to
subscribe for or purchase Preferred Stock (or shares having the
same rights, privileges and preferences as the shares of
Preferred Stock ("equivalent preferred stock") or securities
convertible into Preferred Stock at a price per share of
Preferred Stock or per share of "equivalent preferred stock" (or
having a conversion price per share of Preferred Stock, if a
security convertible into Preferred Stock) less than the current
per share market price of the Preferred Stock (as defined in
Section 11(d)) on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record
date by a fraction, the numerator of which shall be the number of
shares of Preferred Stock outstanding on such record date, plus
the number of shares of Preferred Stock which the aggregate
offering price of the total number of shares of Preferred Stock
and/or equivalent preferred stock so to be offered (and/or the
aggregate initial conversion price of the convertible securities
so to be offered) would purchase at such current market price,
and the denominator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number
of additional shares of Preferred Stock and/or equivalent
preferred stock to be offered for subscription or purchase (or
into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be
paid 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, whose determination shall
be described in a statement filed with the Rights Agent and shall
be conclusive for all purposes. Shares of Preferred Stock owned
by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such
adjustment shall be made successively whenever such a record date
is fixed; and in the event that such rights or warrants are not
so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.
(c) In case the Company shall fix a record date for a
distribution to all holders of Preferred Stock (including any
such distribution made in connection with a consolidation or
merger in which the Company is the continuing or surviving
corporation) of evidences of indebtedness, cash (other than a
regular quarterly cash dividend out of the earnings or retained
earnings of the Company), assets (other than a dividend payable
in Preferred Stock, but including any dividend payable in stock
other than Preferred Stock), or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase
Price to be in effect after such record date shall be determined
by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be
the current per share market price of the Preferred Stock (as
defined in Section 11(d)) on such record date, less the fair
market value (as determined in good faith by the Board, whose
determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes) of the
portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable
to a share of Preferred Stock and the denominator of which shall
be such current per share market price of the Preferred Stock.
Such adjustment shall be made successively whenever such a record
date is fixed; and in the event that such distribution is not so
made, the Purchase Price shall again be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.
(d) (i) For the purpose of any computation hereunder, the
"current market price" per share of the Common Stock on any date
shall be deemed to be the average of the daily closing prices per
share of such Common Stock for the thirty (30) consecutive
Trading Days (as such term is hereinafter defined) immediately
prior to but not including such date, and for purposes of
computations made pursuant to Section 11(a)(iii) hereof, the
"current market price" per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices per
share of Common Stock for the ten (10) consecutive Trading Days
immediately following but not including such date; provided,
however, that in the event that the current market price of the
Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (i) a dividend
or distribution on such Common Stock payable in shares of such
Common Stock or securities convertible into such Common Stock
(other than the Rights), or (ii) any subdivision, combination or
reclassification of such Common Stock, and prior to the
expiration of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above, 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 market price" shall be appropriately
adjusted to take into account ex-dividend trading. The closing
price for each day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading
on the New York Stock Exchange or, if the shares of Common Stock
are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed or admitted to
trading on another national securities exchange on which the
shares of Common Stock are listed or admitted to trading or, if
the shares of Common Stock are not listed or admitted to trading
on any national securities exchange, the last quoted price or, if
not so quoted, the average of the high bid and low asked prices
in the over-the-counter market, as reported by the National
Association of Securities Dealers, Inc. Automated Quotations
System ("NASDAQ") or such other system then in use, or, if on any
such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
shares of Common Stock selected by the Board. If on any such
date no market maker is making a market in the Common Stock, the
fair value of such shares on such date as determined in good
faith by the Board shall be used. The term "Trading Day" shall
mean a day on which the principal national securities exchange on
which the shares of Common Stock are listed or admitted to
trading is open for the transaction of business, or, if the
shares of Common Stock are not listed or admitted to trading on
any national securities exchange, the term "Trading Day" shall
mean a Monday, Tuesday, Wednesday, Thursday or Friday on which
banking or trust institutions in the State of New York are not
authorized or obligated by law or executive order to close. If
the Common Stock is not publicly held or not listed or traded,
"current market price" shall mean the fair value per share as
determined in good faith by the Board, whose determination shall
be described in a statement filed with the Rights Agent and shall
be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(d) (other than the last
sentence thereof). If the current market price per share of
Preferred Stock cannot be determined in the manner provided above
or if the Preferred Stock is not publicly held or listed or
traded in a manner described in clause (i) of this Section 11(d),
the "current market price" per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 1,000 (as such
number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the
Common Stock occurring after the date of this Agreement)
multiplied by the current market price per share of the Common
Stock. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, "current market price" per
share of the Preferred Stock shall mean the fair value per share
as determined in good faith by the Board, whose determination
shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. For all purposes of this
Agreement, the "current market price" of one one-thousandth of a
share of Preferred Stock shall be equal to the "current market
price" of one share of Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent (1%) in such price; provided, however, that any
adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a share of Common Stock or other share
or hundred-thousandth of a share of Preferred Stock, as the case
may be. Notwithstanding the first sentence of this Section
11(e), an adjustment required by this Section 11 shall be made no
later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the Expiration
Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right
thereafter exercised shall become entitled to receive any shares
of capital stock of the Company other than Preferred Stock,
thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be
subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with
respect to the Preferred Stock contained in Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k) and (m), and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price,
the number of one one-thousandths of a share of Preferred Stock
purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Sections 11(b) and
(c), each Right outstanding immediately prior to the making of
such adjustment shall thereafter evidence the right to purchase,
at the adjusted Purchase Price, that number of one
one-thousandths of a share of Preferred Stock (calculated to the
nearest hundred-thousandth) obtained by (i) multiplying (x) the
number of one one-thousandths of a share covered by a Right
immediately prior to this adjustment by (y) the Purchase Price in
effect immediately prior to such adjustment of the Purchase Price
and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights,
in lieu of any adjustment in the number of one one-thousandths of
a share of Preferred Stock issuable 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 share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest
ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the
Purchase Price. The Company shall make a public announcement
(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
Rights Certificates have been issued, shall be at least ten (10)
days later than the date of the public announcement. If Rights
Certificates have been issued, upon each adjustment of the number
of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of
record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the
additional Rights to which such holders shall be entitled as a
result of such adjustment, or, at the option of the Company,
shall cause to be distributed to such holders of record in
substitution and replacement for the Rights Certificates held by
such holders prior to the date of adjustment, and upon surrender
thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled
after such adjustment. Rights Certificates so to be distributed
shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company,
the adjusted Purchase Price) and shall be registered in the names
of the holders of record of Rights Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a share of
Preferred Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one one-thousandth of
a share and the number of one one-thousandths of a share which
were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then-par value, if any, of
the number of one one-thousandths of a share of Preferred Stock
issuable upon exercise of the Rights, the Company shall take any
corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue
fully paid and non-assessable such number of one one-thousandths
of a share of Preferred Stock at such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that
an adjustment in the Purchase Price be made effective as of a
record date for a specified event, the Company may elect to defer
and shall provide the Rights Agent with notice of such election,
until the occurrence of such event the issuance to the holder of
any Right exercised after such record date the number of one
one-thousandths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such
exercise over and above the number of one one-thousandths of a
share of Preferred Stock and other capital stock or securities of
the Company, if any, issuable upon such exercise on the basis of
the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx
or other appropriate instrument evidencing such holder's right to
receive such additional shares 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) consolidation or subdivision of
the Preferred Stock, (ii) issuance wholly for cash of any shares
of Preferred Stock at less than the current market price, (iii)
issuance wholly for cash of shares of Preferred Stock or
securities which by their terms are convertible into or
exchangeable for Preferred Stock, (iv) stock dividends or (v)
issuance of rights, options or warrants referred to hereinabove
in this Section 11, hereafter made by the Company to holders of
its Preferred Stock shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o) hereof), (ii) merge
with or into any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)
hereof), or (iii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Company and/or any of its Subsidiaries in one or
more transactions each of which complies with Section 11(o)
hereof), if (x) at the time of or immediately after such
consolidation, merger or sale there are any rights, warrants or
other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate
the benefits intended to be afforded by the Rights or (y) prior
to, simultaneously with or immediately after such consolidation,
merger or sale, the stockholders of the Person who constitutes,
or would constitute, the "Principal Party" for purposes of
Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and
Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23
or Section 27 hereof, take (or permit any Subsidiary to take) any
action if at the time such action is taken it is reasonably
foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the
Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time
after the Rights Dividend Declaration Date and prior to the
Distribution Date (i) declare a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding shares of Common Stock, or (iii)
combine the outstanding shares of Common Stock into a smaller
number of shares, the number of Rights associated with each share
of Common Stock then outstanding, or issued or delivered
thereafter but prior to the Distribution Date, shall be
proportionately adjusted so that the number of Rights thereafter
associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number
of Rights associated with each share of Common Stock immediately
prior to such event by a fraction the numerator of which shall be
the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of
such event.
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 (a) promptly prepare a certificate
setting forth such adjustment, and a brief statement of the facts
and computations accounting for such adjustment, (b) promptly
file with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock a copy of such certificate
and (c) mail or deliver a brief summary thereof to each holder of
a Rights Certificate (or, if prior to the Distribution Date, to
each holder of a certificate representing shares of Common Stock)
in accordance with Section 25 hereof. 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.
(a) Subject to Section 23 of this Agreement, in the event
that, following the Stock Acquisition Date, directly or
indirectly, (x) the Company shall consolidate with, or merge with
and into, any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)
hereof), and the Company shall not be the continuing or surviving
corporation of such consolidation or merger, (y) any Person
(other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof) shall consolidate with, or
merge with or into, the Company, and the Company shall be the
continuing or surviving corporation of such consolidation or
merger and, in connection with such consolidation or merger, all
or part of the outstanding shares of Common Stock shall be
changed into or exchanged for stock or other securities of any
other Person or cash or any other property, or (z) the Company
shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one
transaction or a series of related transactions, assets or
earning power aggregating more than 50% of the assets or earning
power of the Company and its Subsidiaries (taken as a whole) to
any Person or Persons (other than the Company or any Subsidiary
of the Company in one or more transactions each of which complies
with Section 11(o) hereof), then, and in each such case (except
as may be contemplated by Section 13(d) hereof), proper provision
shall be made so that: (i) each holder of a Right, except as
provided in Section 7(e) hereof, shall, upon the expiration of
the Redemption Period (as defined in Section 23(a)), thereafter
have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully
paid, non-assessable and freely tradable shares of Common Stock
of the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or
other adverse claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the number of
one one-thousandths of a share of Preferred Stock for which a
Right was exercisable immediately prior to the first occurrence
of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event,
multiplying the number of one one-thousandths of a share of
Preferred Stock for which a Right was exercisable immediately
prior to the first occurrence of a Section 11(a)(ii) Event by the
Purchase Price in effect immediately prior to such first
occurrence), and (2) dividing that product (which product,
following the first occurrence of a Section 13 Event, shall be
referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the current market price
per share of the shares of Common Stock of such Principal Party
on the date of consummation of such Section 13 Event (or the fair
market value on such date of other securities or property of the
Principal Party, as provided for herein); (ii) such Principal
Party shall thereafter be liable for, and shall assume, by virtue
of such Section 13 Event, all the obligations and duties of the
Company pursuant to this Agreement; (iii) the term "Company"
shall thereafter be deemed to refer to such Principal Party, it
being specifically intended that the provisions of Section 11
hereof (other than Sections 11(a)(ii) and 11(a)(iii)) shall apply
only to such Principal Party following the first occurrence of a
Section 13 Event; (iv) such Principal Party shall take such steps
(including, but not limited to, the reservation of a sufficient
number of shares of its Common Stock) in connection with the
consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable,
as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the
Rights; and (v) the provisions of Section 11(a)(ii) and Section
11(a)(iii) hereof shall be of no effect following the first
occurrence of any Section 13 Event.
(b) "Principal Party" shall mean (i) in the case of any
transaction described in clause (x) or (y) of the first sentence
of Section 13(a), the Person that is the issuer of any securities
into which shares of Common Stock of the Company are converted in
such merger or consolidation, and if no securities are so issued,
the Person that is the other party to such merger or
consolidation; and (ii) in the case of any transaction described
in clause (z) of the first sentence of Section 13(a), the Person
that is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions; provided, however, that in any such case, (1) if
the Common Stock of such Person is not at such time and has not
been continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such Person
is a direct or indirect Subsidiary of another Person the Common
Stock of which is and has been so registered, "Principal Party"
shall refer to such other Person; and (2) in case such Person is
a Subsidiary, directly or indirectly, of more than one Person,
the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such
Persons is the issuer of the Common Stock having the greatest
aggregate market value.
(c) The Company shall not consummate any Section 13 Event
unless the Principal Party shall have a sufficient number of
authorized shares of its Common Stock which have not been issued
or reserved for issuance to permit the exercise in full of the
Rights in accordance with this Section 13 and unless prior
thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of
this Section 13 and further providing that, as soon as
practicable after the date of any such Section 13 Event, the
Principal Party will: (i) prepare and file a registration
statement under the Securities Act, with respect to the Rights
and the securities purchasable upon exercise of the Rights on an
appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as
practicable after such filing and (B) remain effective (with a
prospectus at all times meeting the requirements of the Act)
until the Expiration Date; and (ii) deliver to holders of the
Rights historical financial statements for the Principal Party
and each of its Affiliates which comply in all respects with the
requirements for registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers.
In the event that a Section 13 Event shall occur at any time
after the occurrence of a Section 11(a)(ii) Event, the Rights
which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a) hereof.
(d) Notwithstanding anything in this Agreement to the
contrary, Section 13 shall not be applicable to a transaction
described in subparagraphs (x) and (y) of Section 13(a) if (i)
such transaction is consummated with a Person or Persons (or a
wholly owned subsidiary of any such Person or Persons) who
acquired shares of Common Stock pursuant to a cash tender offer
for all outstanding shares of Common Stock which complies with
the provisions of Section 11(a)(ii) hereof, (ii) the price per
share of Common Stock offered in such transaction is not less
than the price per share of Common Stock paid to all holders of
Common Stock whose shares were purchased pursuant to such cash
tender offer and (iii) the form of consideration being offered to
the remaining holders of shares of Common Stock pursuant to such
transaction is the same as the form of consideration paid
pursuant to such cash tender offer. Upon consummation of any
such transaction contemplated by this Section 13(d), all Rights
hereunder shall expire.
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of
Rights except prior to the Distribution Date as provided in
Section 11(p) hereof, or to distribute Rights Certificates which
evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the current market value of the 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, or, in
case no such sale takes place on such day, the average of the
high bid and low asked prices, in either case as reported by
NASDAQ or such other system then in use or, if on any such date
the Rights are not quoted by any such organization, the average
of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected
by the Board. If on any such date no such market maker is making
a market in the Rights the fair value of the Rights on such date
as determined in good faith by the Board shall be used. In the
event the Rights are listed or admitted to trading on a national
securities exchange, 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 high bid and low asked
prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to the
national securities exchange on which the Rights are listed or
admitted to trading.
(b) The Company shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred
Stock) upon exercise of the Rights or to distribute certificates
which evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock). In lieu of fractional shares of
Preferred Stock that are not integral multiples of one
one-thousandth of a share of Preferred Stock, the Company may pay
to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the current market value of one
one-thousandth of a share of Preferred Stock. For purposes of
this Section 14(b), the current market value of one
one-thousandth of a share of Preferred Stock shall be one
one-thousandth of the closing price of a share of Preferred Stock
(as determined pursuant to Section 11(d)(ii) hereof) for the
Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of one of the events specified
in Section 11 giving rise to the right to receive Common Stock,
common stock equivalents or other securities upon the exercise of
a Right, the Company shall not be required to issue fractions of
shares of Common Stock, common stock equivalents or other
securities upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock,
common stock equivalents or other securities. In lieu of
fractional shares of Common Stock, common stock equivalents or
other securities the Company may pay to the registered holders of
Rights Certificates at the time such Rights are exercised as
herein provided an amount in cash equal to the same fraction of
the current market value of one (1) share of Common Stock, common
stock equivalents or other securities. For purposes of this
Section 14(c), the current market value of one share of Common
Stock shall be the closing price of one share of Common Stock (as
determined pursuant to Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as
permitted by this Section 14.
SECTION 15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement, except
the rights of action vested in the Rights Agent pursuant to
Section 18 and Section 19 hereof, are vested in the respective
registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock);
and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent
of the Rights Agent or of the holder of any other Rights
Certificate (or, prior to the Distribution Date, of the Common
Stock), may, in his own behalf and for his own benefit, enforce,
and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of,
his right to exercise the Rights evidenced by such Rights
Certificate in the manner provided in such Rights Certificate and
in this Agreement. Without limiting the foregoing or any
remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an
adequate remedy at law for any breach of this Agreement and will
be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the
obligations hereunder of any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHTS HOLDERS.
Every holder of a Right by accepting the same consents and
agrees with the Company and the Rights Agent and with every other
holder of a Right that: (a) prior to the Distribution Date, the
Rights will be transferable only in connection with the transfer
of the Common Stock; (b) after the Distribution Date, the Rights
Certificates are transferable only on the registry books of the
Rights Agent if surrendered at the office of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate form of
assignment and the certificate contained therein duly completed
and executed; (c) subject to Section 6(a) and Section 7(f)
hereof, the Company and the Rights Agent may deem and treat the
Person in whose name the Rights Certificate (or, prior to the
Distribution Date, the associated Common Stock certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent, subject to the last sentence of Section 7(e)
hereof, shall be affected by any notice to the contrary; and (d)
Notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability
to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement
by reason of any preliminary or permanent injunction or other
order, decree, judgment or ruling (whether interlocutory or
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 government authority, prohibiting or otherwise
restraining performance of such obligation; provided, however,
the Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as
possible.
SECTION 17. RIGHTS CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Rights Certificate shall be
entitled to vote, receive dividends or be deemed for any purpose
the holder of the Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the
Rights represented thereby, nor shall anything contained herein
or in any Rights Certificate be construed to confer upon the
holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election
of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate
action, or to receive notice of meetings or other actions
affecting stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by such Rights Certificate
shall have been exercised in accordance with the provisions
hereof.
SECTION 18. 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 the holders of Rights
Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may
be legal counsel for the Company), and the 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 (including, without limitation, the
identity of any Acquiring Person and the determination of
"current market price") be proved or established by the Company
prior to taking or suffering or omitting to take 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 person believed by the Rights Agent to be any one of the
Chairman of the Board, President, Chief Executive Officer, a Vice
President, the 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, omitted or suffered in good faith by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its
own gross negligence, bad faith, or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this
Agreement or in the Rights Certificates (except as to its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and shall be deemed to have
been made by the Company only.
(e) The Rights Agent is serving as an administrative agent
and shall not have any liability for, nor be under any
responsibility in respect of, the validity of any provision of
this Agreement or the execution and delivery of this Agreement
(except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate
(except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or
condition contained in this Agreement or in any Rights
Certificate; nor shall it be responsible for any transfer to an
Acquiring Person or change in the exercisability of the Rights
(including the Rights becoming null and void pursuant to Section
7(e) hereof) or any adjustment required under any of the
provisions hereof or responsible for the manner, method, or
amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except
with respect to the exercise of Rights evidenced by Rights
Certificates after actual notice of any such adjustment); nor
shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation
of any shares of Common Stock or shares of Preferred Stock to be
issued pursuant to this Agreement or any Rights Certificate or as
to whether any shares of Common Stock or shares of Preferred
Stock will, when so issued, be validly authorized and issued,
fully paid and non-assessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any person believed by the Rights Agent to be any
one of the Chairman of the Board, the President, Chief Executive
Officer, a Vice President, the Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions
in connection with its duties, and it shall not be liable for any
action taken, omitted to be taken or suffered to be taken by it
in good faith in accordance with instructions of any such
officer. 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,
suffered or omitted by the Rights Agent under this Rights
Agreement and the date on or after which such action shall be
taken or suffered or such omission shall be effective. The
Rights Agent shall not be liable for any action taken or suffered
by, or omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date
specified in such application (which date shall not be less than
five Business Days after the date any officer of the Company
actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to
taking any such action (or the effective date in the case of an
omission), the Rights Agent shall have received written
instruction in response to such application specifying the action
to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, affiliate,
director, officer or employee of the Rights Agent may buy, sell
or deal in any of the Rights or other securities of the Company
or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for
the Company or for any other Person or legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent shall not be answerable or accountable for
any act, default, neglect, or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect, or misconduct; provided, however, the
Rights Agent was not grossly negligent in the selection and
continued employment thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if it believes in good
faith that repayment of such funds or adequate indemnification
against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered
to the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to
purchase, as the case may be, has either not been properly
completed or indicates an affirmative response to clause 1 and/or
2 thereof, the Rights Agent shall not take any further action
with respect to such requested exercise of transfer without first
consulting with the Company.
(l) The Rights Agent undertakes only the express duties and
obligations imposed on it by this Agreement and no implied duties
or obligations shall be read into this Agreement against the
Rights Agent.
SECTION 19. COMPENSATION AND INDEMNIFICATION 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, administration, execution and any
amendment of this Agreement and the exercise and performance of
its duties hereunder. The Company also agrees to indemnify the
Rights Agent, its officers, employees, agents and directors for,
and to hold each of them harmless against, any loss, liability,
or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for any
action taken, suffered or omitted by the Rights Agent or such
other indemnified party in connection with the acceptance and
administration of this Agreement and the exercise of its duties
hereunder, including but not limited to the costs and expenses of
defending against any claim of liability in the premises. The
indemnity provided for hereunder shall survive the expiration of
the Rights and the termination of this Agreement.
(b) The Rights Agent shall be authorized and protected and
shall incur no liability for or in respect of any action taken,
suffered or omitted by it in connection with its acceptance and
administration of this Agreement or the exercise of its duties
hereunder in reliance upon any Rights 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, 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.
(c) Anything in this Agreement to the contrary
notwithstanding, in no event shall the Rights Agent be liable for
special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if
the Rights Agent has been advised of the likelihood of such loss
or damage and regardless of the form of the action.
SECTION 20. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT.
(a) Any Person into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated,
or any Person resulting from any merger or consolidation to which
the Rights Agent or any successor Rights Agent shall be a party,
or any Person succeeding to the shareholder services business of
the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part
of any of the parties hereto; provided, however, that such Person
would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof.
(b) In case at any time the name of the Rights Agent shall
be changed and at any such time any of the Rights Certificates
shall have been countersigned but not delivered, the Rights Agent
may adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
SECTION 21. CHANGE OF RIGHTS AGENT.
(a) The Rights Agent or any successor Rights Agent may
resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company
and to each transfer agent of the Common Stock and the Preferred
Stock by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. The Company may remove
the Rights Agent or any successor Rights Agent upon thirty (30)
days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of
the Common Stock and Preferred Stock by registered or certified
mail, and to the holders of the Rights Certificates by
first-class mail. If the Rights Agent shall resign or be removed
or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of thirty (30) days
after giving notice of such removal or after it has been notified
in writing of such resignation or incapacity by the resigning or
incapacitated Rights Agent or by the holder of a Rights
Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then the registered
holder of any Rights Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent.
Any successor Rights Agent, whether appointed by the Company or
by such a court, shall be (i) a Person organized and doing
business under the laws of the United States or of the State of
Maryland or New York (or of any other state of the United States
so long as such Person is authorized to do business in the State
of Maryland or New York), in good standing, having an office in
the State of Maryland or New York which 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 or (ii) an affiliate of such a
Person. After appointment, the successor Rights Agent shall be
vested with the same powers, rights, duties and responsibilities
as if it had been originally named as Rights Agent without
further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property
at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the
purpose. Not later than the effective date of any such
appointment the Company shall file notice thereof in writing with
the predecessor Rights Agent and each transfer agent of the
Common Stock and the Preferred Stock, and mail a notice thereof
in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21,
however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the
appointment of the successor Rights Agent, as the case may be.
(b) In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the
Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor Rights Agent
or in the name of the successor Rights Agent; and in all such
cases such Rights Certificates shall have the full force provided
in the Rights Certificates and in this Agreement.
SECTION 22. ISSUANCE OF NEW RIGHTS CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or
of the Rights to the contrary, the Company may, at its option,
issue new Rights Certificates evidencing Rights in such form as
may be approved by the Board to reflect any adjustment or change
in the Purchase Price per share and the number or kind of class
of shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date
(other than upon exercise of a Right) and prior to the redemption
or expiration of the Rights, the Company (a) shall, with respect
to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of
securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board,
issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided,
however, that (i) no such Rights Certificate shall be issued if,
and to the extent that, the Company shall be advised by counsel
that such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom
such Rights Certificate would be issued, and (ii) no such Rights
Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of
the issuance thereof.
SECTION 23. REDEMPTION.
(a) The Board may, at its option, at any time during the
period commencing on the Rights Dividend Declaration Date and
ending on the earlier of (i) the Close of Business on the tenth
day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date,
the Close of Business on the tenth day following the Record
Date), as such period may be extended or shortened in the
discretion of the Board of Directors (the "Redemption Period") or
(ii) the Close of Business on the Final Expiration Date, cause
the Company to redeem all but not less than all the then
outstanding Rights at a redemption price of $.001 per Right, as
such amount may be appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the
date hereof (such redemption price being hereinafter referred to
as the "Redemption Price"); provided, however, that, if the Board
authorizes redemption of the Rights or a change in the Redemption
Period on or after the time a Person becomes an Acquiring Person,
then there must be Continuing Directors then in office and such
authorization shall require the concurrence of a majority of such
Continuing Directors. If, following the occurrence of a Stock
Acquisition Date and following the expiration of the Company's
right of redemption hereunder (i) a Person who is an Acquiring
Person shall have transferred or otherwise disposed of a number
of shares of Common Stock in one transaction or series of
transactions, not directly or indirectly involving the Company or
any of its Subsidiaries, which did not result in the occurrence
of a Triggering Event such that such Person is thereafter a
Beneficial Owner of 5% or less of the outstanding shares of
Common Stock, (ii) there are no other Persons, immediately
following the occurrence of the event described in clause (i),
who are Acquiring Persons, and (iii) the Board (with the
concurrence of a majority of the Continuing Directors) shall so
approve, then the Company's right of redemption shall be
reinstated and thereafter be subject to the provisions of this
Section 23. Notwithstanding anything contained in this Agreement
to the contrary, the Rights shall not be exercisable after the
first occurrence of a Section 11(a)(ii) Event or a Section 13
Event until such time as the Company's right of redemption
hereunder has expired. The Company may, at its option, pay the
Redemption Price in cash, shares of Common Stock (based on the
current market price of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate
by the Board.
(b) Immediately upon the action of the Board ordering the
redemption of the Rights, evidence of which shall have been filed
with the Rights Agent, and without any further action and without
any notice, the right to exercise the Rights will terminate and
the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. Promptly after the action of the
Board ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent and the
holders of the then outstanding Rights by mailing such notice to
all such holders at their last addresses as they appear upon the
registry books of the Rights Agent or, prior to the Distribution
Date, on the registry books of the Transfer Agent for the Common
Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the
notice. Each such notice of redemption will state the method by
which the payment of the Redemption Price will be made.
SECTION 24. EXCHANGE.
(a) The Board may, at its option, at any time after any
Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include
Rights that have become null and void pursuant to the provisions
of Section 11(a)(ii) or Section 7(e) hereof) for shares of Common
Stock at an exchange ratio of one share of Common Stock per
Right, appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the
"Exchange Ratio").
(b) Immediately upon the action of the Board ordering the
exchange of any Rights pursuant to subsection (a) of this Section
24 and without any further action and without any notice, the
right to exercise such Rights shall terminate and the only right
thereafter of a holder of such Rights shall be to receive that
number of shares of Common Stock equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice (as well as prompt
notice to the Rights Agent) of any such exchange; provided,
however, that the failure to give, or any defect in, such notice
shall not affect the validity of such exchange. The Company
promptly shall mail a notice of any such exchange to all of the
holders of such Rights at their last addresses as they appear
upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of Common
Stock for Rights will be effected and, in the event of any
partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the
number of Rights (other than Rights which have become void
pursuant to the provisions of Section 11(a)(ii) or Section 7(e)
hereof) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common
Stock issued but not outstanding or authorized but unissued to
permit any exchange of Rights as contemplated in accordance with
this Section 24, the Company shall take all such action as may be
necessary to authorize additional shares of Common Stock for
issuance upon exchange of the Rights.
(d) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of such
fractional shares, the Company shall pay to the registered
holders of the Right Certificates with regard to which such
fractional shares would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole
share of Common Stock. For the purposes of this paragraph (d),
the current market value of a whole share of Common Stock shall
be the closing price of a share of Common Stock (as determined
pursuant to the second sentence of Section 11(d) hereof) for the
Trading Day immediately prior to the date of exchange pursuant to
this Section 24.
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time after the
Distribution Date (i) to pay any dividend payable in stock of any
class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a
regular quarterly cash dividend out of earnings or retained
earnings) or (ii) to offer to the holders of Preferred Stock
rights or warrants to subscribe for or to purchase any additional
shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding
Preferred Stock), or (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 more than 50% of
the assets or earning power of the Company and its subsidiaries
(taken as a whole) to, any other Person, or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in
each such case, the Company shall give to the Rights Agent and to
each holder of a Rights 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,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of
Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i)
or (ii) above at least twenty (20) days prior to the record date
for determining holders of the shares of Preferred Stock for
purposes of such action and in the case of any such other action,
at least twenty (20) days prior to the date of the taking of such
proposed action or the date of participation therein by the
holders of the shares of Preferred Stock whichever shall be the
earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then,
in any such case, (i) the Company shall as soon as practicable
thereafter give to each holder of a Rights Certificate, to the
extent feasible and in accordance with Section 26 hereof, a
notice of the occurrence of such event which shall specify the
event and the consequences of the event to holders of Rights
under Section 11(a)(ii) hereof, and (ii) all references in the
preceding paragraph to Preferred Stock shall be deemed thereafter
to refer to Common Stock and/or, if appropriate other securities.
SECTION 26. NOTICES.
Notices or demands authorized by this Agreement to be given
or made by the Rights Agent or by the holder of any Rights
Certificate to or on the Company shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Rights Agent)
as follows: Startec Global Communications Corporation 00000
Xxxxx Xxxx Xxxxx, Xxxxxxxx, Xxxxxxxx 00000 Attention: President
and Chief Executive Officer. Subject to the provisions of
Section 21 hereof, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of
any Rights Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage
prepaid, addressed (until another address is filed in writing
with the Company) as follows: Continental Stock Transfer &
Trust Company 0 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000 Attention:
Compliance Department. Notices or demands authorized by this
Agreement to be given or made by the Company or the Rights Agent
to the holder of any Rights Certificate shall be sufficiently
given or made if sent by first-class mail, postage prepaid,
addressed to any such holder at the address of such holder as
shown on the registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS.
Prior to the Distribution Date and subject to the
penultimate sentence of this Section 27, the Company may, and the
Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the approval of any
holders of certificates representing shares of Common Stock.
From and after the Distribution Date and subject to the
penultimate sentence of this Section 27, the Company may, and the
Rights Agent shall at any time and from time to time, if the
Company so directs, supplement or amend this Agreement without
the approval of any holders of Rights Certificates in order (i)
to cure any ambiguity, (ii) to correct or supplement any
provision contained herein which may be defective or inconsistent
with any other provisions herein, (iii) to shorten or lengthen
any time period hereunder or (iv) to change or supplement the
provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the
interests of the Rights Agent or the holders of Rights
Certificates (other than an Acquiring Person or an Affiliate or
Associate of any such Person); provided, however, that this
Agreement may not be supplemented or amended (A) to lengthen a
time period relating to when the Rights may be redeemed at such
time as the Rights are not then redeemable, or (B) to lengthen
any other time period unless such lengthening is for the purpose
of protecting, enhancing or clarifying the rights of, and/or the
benefits to, the holders of Rights (other than an Acquiring
Person or an Affiliate or Associate of any such Person). Upon
the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Notwithstanding
anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the
Redemption Price, the Final Expiration Date, the number of one
one-thousandths of a share of Preferred Stock for which a Right
is exercisable or the Purchase Price; provided, however, that at
any time prior to the Distribution Date, the Company may amend
this Agreement to increase the Purchase Price. In addition, no
supplement or amendment that changes or increases the rights,
duties and obligations of the Rights Agent under this Agreement
shall be effective without the consent of the Rights Agent.
Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the
holders of shares of Common Stock.
SECTION 28. SUCCESSORS.
All the covenants and provisions of this Agreement by or for
the benefit of the Company or the Rights Agent shall bind and
inure to the benefit of their respective successors and assigns
hereunder.
SECTION 29. DETERMINATIONS AND ACTIONS BY THE BOARD, ETC.
For all purposes of this Agreement, any calculation of the
number of shares of Common Stock outstanding at any particular
time, including for purposes of determining the particular
percentage of such outstanding shares of Common Stock of which
any Person is the Beneficial Owner, shall be made in accordance
with the last sentence of Rule 13d-3(d)(1)(i) of the General
Rules and Regulations under the Exchange Act. The Board (with,
where specifically provided for herein, the concurrence of the
Continuing Directors or Outside Directors) shall have the
exclusive power and authority to administer this Agreement and to
exercise all rights and powers specifically granted to the Board
(with, where specifically provided for herein, the concurrence of
the Continuing Directors or Outside Directors) or to the Company,
or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to
(i) interpret the provisions of this Agreement, and (ii) make all
determinations deemed necessary or advisable for the
administration of this Agreement (including without limitation a
determination to redeem or not redeem the Rights or to amend the
Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) which are done or made
by the Board (with, where specifically provided for herein, the
concurrence of the Continuing Directors or Outside Directors) in
good faith, shall (x) be final, conclusive and binding on the
Company, the Rights Agent, the holders of the Rights and all
other Persons, and (y) not subject any director to any liability
to the holders of the Rights. The Rights Agent is entitled to
always assume that the Company's Board of Directors acted in good
faith and shall be fully protected and incur no liability in
reliance thereon.
SECTION 30. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any
Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock)
any legal or equitable right, remedy or claim under this
Agreement; but this Agreement shall be for the sole and exclusive
benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of Common Stock).
SECTION 31. SEVERABILITY.
If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no
way be affected, impaired or invalidated; provided, however, that
notwithstanding anything in this Agreement to the contrary, if
any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the
Board of Directors determines in its good faith judgment that
severing the invalid language from this Agreement would
materially and adversely affect the purpose or effect of this
Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the Close of
Business on the tenth day following the date of such
determination by the Board.
SECTION 32. GOVERNING LAW.
This Agreement, each Right and each Rights Certificate
issued hereunder shall be deemed to be a contract made under the
laws of the State of Maryland and for all purposes shall be
governed by and construed in accordance with laws of such State.
SECTION 33. COUNTERPARTS.
This Agreement may be executed in any number of
counterparts. It shall not be necessary that the signature of or
on behalf of each party appears on each counterpart, but it shall
be sufficient that the signature of or on behalf of each party
appears on one or more of the counterparts. All counterparts
shall collectively constitute a single agreement. It shall not
be necessary in any proof of this Agreement to produce or account
for more than a number of counterparts containing the respective
signatures of or on behalf of all of the parties.
SECTION 34. DESCRIPTIVE HEADINGS.
Descriptive headings of the several Sections of this
Agreement are inserted for convenience only and shall not control
or affect the meaning or construction of any of the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have caused this
Rights Agreement to be duly executed and attested, all as of the
day and year first above written.
STARTEC GLOBAL COMMUNICATIONS CORPORATION
By:
-----------------------------------
Name: Ram Xxxxxxx
Title: Chairman of the Board of Directors,
President and Chief Executive Officer
ATTEST:
By:
----------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Senior Vice President
CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
as Rights Agent
By:
-------------------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: Vice President
ATTEST:
By:
---------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Assistant Secretary
Exhibit A
STARTEC GLOBAL COMMUNICATIONS CORPORATION
ARTICLES SUPPLEMENTARY
STARTEC GLOBAL COMMUNICATIONS CORPORATION, a Maryland
corporation having its principal office in Bethesda, Maryland
(the "Corporation"), hereby certifies to the State Department of
Assessments and Taxation of Maryland that:
FIRST: The Corporation's Amended and Restated Articles of
Incorporation (the "Charter"), currently provides for One Hundred
Thousand (100,000) authorized but unissued shares of preferred
stock, par value $1.00 per share, which may be classified by the
Corporation's Board of Directors. Pursuant to the authority
conferred upon the Board of Directors by the Charter, the Board
of Directors on March 26, 1998 duly designated 25,000 shares of
the Corporation's authorized but unissued preferred stock as a
series of preferred stock, to be entitled "Series A Junior
Participating Preferred Stock".
SECOND: A description of the Series A Junior Participating
Preferred Stock, and of the preferences, rights, voting powers,
restrictions, dividends, qualifications and terms and conditions
thereof, is as follows:
Section 1. Designation and Amount.
The shares of such series, par value $1.00 per share, shall
be designated as "Series A Junior Participating Preferred Stock"
and the number of shares constituting such series shall be
Twenty-Five Thousand (25,000). 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 Junior Participating 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 Junior Participating Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders
of any shares of any series of Preferred Stock ranking prior and
superior to the shares of Series A Junior Participating Preferred
Stock with respect to dividends, the holders of shares of Series
A Junior Participating Preferred Stock shall be entitled to
receive, when, as and if declared by the Board of Directors out
of funds legally available for the purpose, quarterly dividends
payable in cash on the 15th day of April, July, October and
January, 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 first issuance of a share
or fraction of a share of Series A Junior Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal
to the greater of (a) $1.00 or (b) subject to the provision for
adjustment hereinafter set forth, 1,000 times the aggregate per
share amount of all cash dividends, and 1,000 times the aggregate
per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of
common stock, par value $.01 per share, of the Corporation (the
"Common Stock"), or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on the
Common Stock, since the immediately preceding Quarterly Dividend
Payment Date, or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction
of a share of Series A Junior Participating Preferred Stock. In
the event the Corporation shall at any time after March 26, 1998
(the "Rights Declaration Date") (i) declare or pay any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such
case the amount to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to
such event under clause (b) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the numerator
of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution
on the Series A Junior Participating Preferred Stock as provided
in paragraph (A) above immediately after it declares a dividend
or distribution on the Common Stock (other than a dividend
payable in shares of Common Stock); provided that, in the event
no dividend or distribution shall have been declared on the
Common Stock during the period between any Quarterly Dividend
Payment Date and the next subsequent Quarterly Dividend Payment
Date, a dividend of $1.00 per share on the Series A Junior
Participating Preferred Stock shall nevertheless be payable on
such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Junior Participating Preferred
Stock from the Quarterly Dividend Payment Date next preceding the
date of issue of such shares of Series A Junior Participating
Preferred Stock, unless the date of issue of such shares is prior
to the record date set for the first Quarterly Dividend Payment
Date, in which case dividends on such shares shall begin to
accrue from the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is a date after
the record date for the determination of holders of shares of
Series A Junior Participating Preferred Stock entitled to receive
a quarterly dividend and before such Quarterly Dividend Payment
Date, in either of which event such dividends shall begin to
accrue and be cumulative from such Quarterly Dividend Payment
Date. Accrued but unpaid dividends shall not bear interest.
Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such
dividends at the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Series
A Junior Participating Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon, which
record date shall be no more than 50 days prior to the date fixed
for the payment thereof.
Section 3. Voting Rights.
The holders of shares of Series A Junior Participating
Preferred Stock shall have the following voting rights: (A)
Subject to the provision for adjustment hereinafter set forth,
each one one-thousandth of a share of Series A Junior
Participating Preferred Stock shall entitle the holder thereof to
one vote on all matters submitted to a vote of the stockholders
of the Corporation. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock, or (iii) combine the outstanding
Common Stock into a smaller number of shares, then in each such
case the number of votes per share to which holders of shares of
Series A Junior Participating Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying
such number by a fraction the numerator of which is the number of
shares of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of Common
Stock that were outstanding immediately prior to such event;
provided that in no event shall each share of Series A Junior
Participating Preferred Stock entitle the holder thereof to more
than one vote on all matters submitted to a vote of the
stockholders of the Corporation.
(B) Except as otherwise provided by law, the holders of
shares of Series A Junior Participating Preferred Stock and the
holders of shares of Common Stock shall vote together as one
class on all matters submitted to a vote of stockholders of the
Corporation.
(C) Except as set forth herein, holders of Series A Junior
Participating Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent
they are entitled to vote with holders of Common Stock as set
forth herein) for taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever dividends or distributions payable on the
Series A Junior Participating Preferred Stock as provided in
Section 2 are not paid, thereafter and until such dividends and
distributions, whether or not declared, on shares of Series A
Junior Participating Preferred Stock outstanding shall have been
paid in full, the Corporation shall not: (i) declare or pay
dividends on, or make any other distributions on, or redeem or
purchase or otherwise acquire for consideration any shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series A Junior Participating
Preferred Stock; or (ii) declare or pay dividends on, or make any
other distributions on, any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Junior Participating Preferred
Stock, except dividends paid ratably on the Series A Junior
Participating Preferred Stock and all such parity stock on which
dividends are payable 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 on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A Junior
Participating Preferred Stock, provided that the Corporation may
at any time redeem, purchase or otherwise acquire shares of any
such parity stock in exchange for shares of any stock of the
Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior
Participating Preferred Stock; or (iv) redeem or purchase or
otherwise acquire for consideration any shares of Series A Junior
Participating Preferred Stock, or any shares of stock ranking on
a parity with the Series A Junior Participating Preferred Stock,
except in accordance with a purchase offer made in writing or by
publication (as determined by the Board of Directors) to all
holders of such shares upon such terms as the Board of Directors,
after consideration of the respective annual dividend rates and
other relative rights and preferences of the respective series
and classes, shall determine in good faith will result in fair
and equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration
any shares of stock of the Corporation unless the Corporation
could, under paragraph (A) of this Section 4, purchase or
otherwise acquire such shares at such time and in such manner.
Section 5. Reacquired Shares.
Any shares of Series A Junior Participating Preferred Stock
purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and canceled promptly after the
acquisition thereof. All such shares shall upon their
cancellation become authorized but unissued shares of Preferred
Stock and may be reissued as part of a new series of Preferred
Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance
set forth herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no distribution
shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or
winding up) to the Series A Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Series A Junior
Participating Preferred Stock shall have received $10.00 per
share, plus any unpaid dividends and distributions payable
thereon, whether or not declared, to the date of such payment
(the "Series A Liquidation Preference"). Following the payment
of the full amount of the Series A Liquidation Preference, no
additional distributions shall be made to the holders of Series A
Junior Participating Preferred Stock unless, prior thereto, the
holders of shares of Common Stock shall have received an amount
per share (the "Common Adjustment") equal to the quotient
obtained by dividing (i) the Series A Liquidation Preference by
(ii) 1,000 (as appropriately adjusted as set forth in
subparagraph (C) below to reflect such events as stock splits,
stock dividends and recapitalizations with respect to the Common
Stock) (such number in clause (ii) immediately above being
referred to as the "Adjustment Number"). Following the payment
of the full amount of the Series A Liquidation Preference and the
Common Adjustment in respect of all outstanding shares of Series
A Junior Participating Preferred Stock and Common Stock,
respectively, holders of Series A Junior Participating Preferred
Stock and holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets to be
distributed in the ratio of the Adjustment Number to one (1) with
respect to such Preferred Stock and Common Stock, on a per share
basis, respectively.
(B) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series A
Liquidation Preference and the liquidation preferences of all
other series of preferred stock, if any, which rank on a parity
with the Series A Junior Participating Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of
such parity shares in proportion to their respective liquidation
preferences. In the event, however, that there are sufficient
assets available to permit payment in full of the Common
Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time after the
Rights Declaration Date (i) declare any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivide the outstanding
Common Stock, or (iii) combine the outstanding Common Stock into
a smaller number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall be
adjusted by multiplying such Adjustment Number by a fraction the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc.
In case the Corporation shall enter into any consolidation,
merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case
the shares of Series A Junior Participating Preferred Stock shall
at the same time be similarly exchanged or changed in an amount
per share (subject to the provision for adjustment hereinafter
set forth) equal to 1,000 times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Corporation
shall at any time after the Rights Declaration Date (i) declare
any dividend on Common Stock payable in shares of Common Stock,
(ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock into a smaller number of shares, then in
each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series A
Junior Participating Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to
such event.
Section 8. Redemption.
The outstanding shares of Series A Junior Participating
Preferred Stock shall not be redeemable by the Corporation. The
preceding sentence shall not limit the ability of the Corporation
to purchase or otherwise deal in such shares of stock to the
extent permitted by law.
Section 9. Ranking.
Notwithstanding anything contained herein to the contrary,
the Series A Junior Participating Preferred Stock shall rank
junior to all other series of the Corporation's Preferred Stock
as to voting rights, the payment of dividends and the
distribution of assets in liquidation, unless the terms of any
such series shall provide otherwise.
Section 10. Amendment.
The Amended and Restated Articles of Incorporation of the
Corporation shall not be further amended in any manner which
would materially alter or change the powers, preferences or
special rights of the Series A Junior Participating Preferred
Stock so as to affect them adversely without the affirmative vote
of the holders of at least a majority of the outstanding shares
of Series A Junior Participating Preferred Stock, voting
separately as a class.
Section 11. Fractional Shares.
Series A Junior Participating Preferred Stock may be issued
in fractions of a share which shall entitle the holders, in
proportion to such holders fractional shares, to exercise voting
rights, receive dividends, participate in distributions and to
have the benefit of all other rights of holders of Series A
Junior Participating Preferred Stock.
THIRD: The classification of authorized but unissued shares
as set forth in these Articles Supplementary has no change in the
authorized capital of the Corporation consisting of One Hundred
Thousand (100,000) shares of Preferred Stock, par value $1.00 per
share, and Twenty Million (20,000,000) shares of Common Stock,
par value $.01 per share, amounting in the aggregate to Three
Hundred Thousand Dollars ($300,000).
IN WITNESS WHEREOF, Startec Global Communications
Corporation has caused these presents to be signed in its name
and on its behalf by its President and its corporate seal to be
hereunto affixed and attested by its Secretary this 26th day of
March, 1998, and the undersigned officers acknowledge that these
Articles Supplementary are the acts of the Corporation, and that,
to the best of their knowledge, information and belief all
matters and facts set forth herein relating to the authorization
and approval of these Articles are true in all material respects,
and that this statement is made under the penalties of perjury.
Startec Global Communications Corporation
By:
-----------------------------------
Ram Xxxxxxx, President and Chief
Executive Officer
Attest:
By:
-------------------------
Xxxxxxx X. Xxxxxxx
Senior Vice President
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK
On March 26, 1998, the Board of Directors of Startec Global
Communications Corporation (the "Company") declared a dividend
distribution of one right ("Right") for each outstanding share of
common stock, par value $.01 per share (the "Common Stock") of
the Company. The distribution is payable to stockholders of
record on April 3, 1998. Each Right, when exercisable, entitles
the registered holder to purchase from the Company one one-
thousandth of a share of Series A Junior Participating Preferred
Stock ("Preferred Stock") at a price of $150 per one one-
thousandth share (the "Purchase Price"), subject to adjustment.
The description and terms of the Rights are set forth in a Rights
Agreement (the "Rights Agreement") between the Company and
Continental Stock Transfer & Trust Company, as Rights Agent (the
"Rights Agent").
Initially, the Rights will be attached to all certificates
representing shares of Common Stock then outstanding, and no
separate certificates evidencing the Rights will be distributed.
The Rights will separate from the Common Stock and a distribution
of Rights Certificates (as defined below) will occur upon the
earlier to occur of (i) 10 days following a public announcement
that a person (other than an Exempt Person (as defined below)) or
group of affiliated or associated persons (an "Acquiring Person")
has acquired, or obtained the right to acquire, beneficial
ownership of 10% or more of the outstanding shares of Common
Stock (the "Stock Acquisition Date") or (ii) 10 business days (or
such later date as the Continuing Directors (as defined below)
may determine) following the commencement of a tender offer or
exchange offer the consummation of which would result in the
beneficial ownership by a person of 10% or more of the
outstanding shares of Common Stock (the earlier of such dates
being called the "Distribution Date").
Until the Distribution Date, (i) the Rights will be
evidenced by the Common Stock certificates, and will be
transferred with and only with the Common Stock certificates,
(ii) new Common Stock certificates issued after April 3, 1998
upon transfer or new issuance of the Common Stock will contain a
notation incorporating the Rights Agreement by reference, and
(iii) the surrender for transfer of any certificates for Common
Stock outstanding will also constitute the transfer of the Rights
associated with the Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date
and will expire at the close of business on March 25, 2008,
unless earlier redeemed or exchanged by the Company as described
below. The Rights will not be exercisable by a holder in any
jurisdiction where the requisite qualification to the issuance to
such holder, or the exercise by such holder, of the Rights has
not been obtained or is not obtainable.
As soon as practicable following the Distribution Date,
separate certificates evidencing the Rights ("Rights
Certificates") will be mailed to holders of record of the Common
Stock as of the close of business on the Distribution Date and,
thereafter, the separate Rights Certificates alone will evidence
the Rights. Except as otherwise determined by the Board of
Directors, only shares of Common Stock issued prior to the
Distribution Date will be issued with Rights.
In the event that a Person (other than an Exempt Person)
becomes the beneficial owner of 10% or more of the then
outstanding shares of Common Stock (except pursuant to an offer
for all outstanding shares of Common Stock which the Outside
Directors (as defined below) determine to be fair to and
otherwise in the best interests of the Company and its
stockholders), each holder of a Right (other than Rights held by
the party triggering the Rights and certain transferees which are
voided) will, after the end of a redemption period referred to
below, have the right to exercise the Right by purchasing, for an
amount equal to the Purchase Price, Common Stock (or, in certain
circumstances, cash, property or other securities of the Company)
having a value equal to two times such amount. Notwithstanding
any of the foregoing, following the occurrence of the events set
forth in this paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and void.
However, Rights are not exercisable following the occurrence of
the events set forth above until such time as the Rights are no
longer redeemable by the Company as set forth below.
For example, at a Purchase Price of $100 per Right, each
Right not owned by an Acquiring Person (or by certain related
parties) following an event set forth in the preceding paragraph
would entitle its holder to purchase $200 worth of Common Stock
(or other consideration, as noted above) for $100. Assuming that
the Common Stock had a per share value of $25 at such time, the
holder of each valid Right would be entitled to purchase eight
shares of Common Stock for $100.
In the event that, at any time following the Stock
Acquisition Date, (i) the Company is acquired in a merger or
other business combination transaction in which the Company is
not the surviving corporation (other than a merger which follows
an offer described in the second preceding paragraph), or (ii)
50% or more of the Company's assets or earning power is sold or
transferred, each holder of a Right (except Rights which
previously have been voided as set forth above) shall, after the
expiration of the redemption period referred to below, have the
right to receive, upon exercise, common stock of the acquiring
company having a value equal to two times the Purchase Price of
the Right (e.g., common stock of the acquiring company having a
value of $200 for the $100 Purchase Price).
At any time after a person or group of affiliated or
associated persons becomes an Acquiring Person, the Board of
Directors of the Company may exchange the Rights (other than
Rights owned by such person or group which have become void), in
whole or in part, at an exchange ratio of one share of Common
Stock per Right (subject to adjustment).
The Purchase Price payable, and the number of one
one-thousandths of a share of Preferred Stock or other securities
or property issuable, upon exercise of the Rights are subject to
adjustment from time to time to prevent dilution (i) in the event
of a stock dividend on, or a subdivision, combination or
reclassification of the Preferred Stock, (ii) upon the grant to
holders of the Preferred Stock of certain rights or warrants to
subscribe for Preferred Stock or convertible securities at less
than the current market price of the Preferred Stock or (iii)
upon the distribution to holders of the Preferred Stock of
evidences of indebtedness or assets (excluding regular quarterly
cash dividends) or of subscription rights or warrants (other than
those referred to above).
With certain exceptions, no adjustment in the Purchase Price
will be required until cumulative adjustments require an
adjustment of at least 1% in such Purchase Price. No fractional
shares will be issued (other than fractions which are integral
multiples of one one-thousandth of a share of Preferred Stock)
and in lieu thereof, an adjustment in cash will be made based on
the market price of the Preferred Stock on the last trading date
prior to the date of exercise.
In general, the Board of Directors of the Company, may cause
the Company to redeem the Rights in whole, but not in part, at
any time during the period commencing on March 26, 1998, and
ending on the tenth day following the Stock Acquisition Date, as
such period may be extended or shortened by the Board of
Directors (the "Redemption Period") at a price of $.001 per Right
(payable in cash, Common Stock or other consideration deemed
appropriate by the Board of Directors). Under certain
circumstances set forth in the Rights Agreement, the decision to
redeem the Rights will require the concurrence of a majority of
the Continuing Directors. After the Redemption Period has
expired, the Company's right of redemption may be reinstated
(with the concurrence of the Continuing Directors) if an
Acquiring Person reduces his beneficial ownership to 5% or less
of the outstanding shares of Common Stock in a transaction or
series of transactions not involving the Company and there are no
other Acquiring Persons. Immediately upon the action of the
Board of Directors of the Company ordering redemption of the
Rights, with, where required, the concurrence of the Continuing
Directors, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.001 redemption price.
The term "Continuing Director" means any member of the Board
of Directors of the Company who was a member of the Board of
Directors prior to the date of the Rights Agreement, and any
person who is subsequently elected to the Board if such person is
recommended or approved by a majority of the Continuing
Directors, but shall not include an Acquiring Person or an
affiliate or associate of an Acquiring Person, or any
representative of the foregoing entities. The term "Outside
Directors" means "Continuing Directors" who are not officers of
the Company. The term "Exempt Person" means (i) the Company or
any of its subsidiaries, (ii) any employee benefit plan of the
Company or its subsidiaries, (iii) a Person who becomes the
beneficial owner of 10% or more of the Common Stock as the result
of any repurchase of Common Stock by the Company, or (iv) Ram
Xxxxxxx, the President and Chief Executive Officer of the Company
and his immediate family or any entity owned by such persons.
Until a Right is exercised, the holder thereof, as such,
will have no rights as a stockholder of the Company, including,
without limitation, the right to vote or to receive dividends.
While the distribution of the Rights will not be subject to
federal taxation to stockholders or to the Company, stockholders
may, depending upon the circumstances, recognize taxable income
in the event that the Rights become exercisable for Common Stock
(or other consideration) of the Company or for common stock of
the acquiring company as set forth above.
Other than those provisions relating to the principal
economic terms of the Rights (other than an increase in the
Purchase Price), any of the provisions of the Rights Agreement
may be amended by the Board of Directors of the Company prior to
the Distribution Date. After the Distribution Date, the
provisions of the Rights Agreement may be amended by the Board in
order to cure any ambiguity, defect or inconsistency or to make
changes which do not adversely affect the interests of holders of
Rights (excluding the interests of any Acquiring Person), or to
shorten or lengthen any time period under the Rights Agreement;
provided however, no amendment to adjust the time period
governing redemption may be made at such time as the Rights are
not redeemable.
EXHIBIT C
[Form of Rights Certificate]
Certificate No. R-__________ __________ Rights
NOT EXERCISABLE AFTER MARCH 25, 2008 OR EARLIER IF
REDEEMED OR EXCHANGED BY THE COMPANY. THE RIGHTS ARE
SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF ANY SUCH PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND
VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL
BE VOID SO LONG AS HELD, BY A HOLDER IN ANY
JURISDICTION WHERE THE REQUISITE QUALIFICATION TO THE
ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH
HOLDER, OF THE RIGHTS IN SUCH JURISDICTION SHALL NOT
HAVE BEEN OBTAINED OR BE OBTAINABLE. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN
ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN
ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY
BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN
SECTION 7(e) OF SUCH AGREEMENT.]
(The portion of the legend in brackets shall be inserted only if
applicable - - and shall replace the preceding sentence.)
Rights Certificate
Startec Global Communications Corporation
This certifies that , or its 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
March 26, 1998 (the "Rights Agreement"), between Startec Global
Communications Corporation, a Maryland corporation (the
"Company"), and Continental Stock Transfer & Trust Company (the
"Rights Agent"), to purchase from the Company at any time prior
to March 25, 2008 at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent,
one one-thousandth of a fully paid, non-assessable share of
Series A Junior Participating Preferred Stock, par value $1.00
per share (the "Preferred Stock") of the Company, at a purchase
price of $175 per one one-thousandth share (the "Purchase
Price"), upon presentation and surrender of this Rights
Certificate with the Form of Election to Purchase and related
Certificate duly executed. The number of Rights evidenced by
this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the
Purchase Price per share set forth above, are the number and
Purchase Price as of March 26, 1998, based on the Preferred Stock
as constituted at such date, and are subject to adjustment upon
the happening of certain events as provided in the Rights
Agreement.
From and after the occurrence of an event described in
Section 11(a)(ii) of the Rights Agreement, the Rights evidenced
by this Rights Certificate beneficially owned by (i) an Acquiring
Person or an Affiliate or Associate of any such Person (as such
terms are defined in the Rights Agreement), which the Continuing
Directors (as defined in the Rights Agreement), in their sole
discretion, determine is or was involved in or caused or
facilitated, directly or indirectly (including through any change
in the Board), such Section 11(a)(ii) Event, (ii) a transferee of
any such Acquiring Person, Associate or Affiliate, or (iii) under
certain circumstances specified in the Rights Agreement, a
transferee of a person who, concurrently with or after such
transfer, became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person shall become null and void and no holder
hereof shall have any right with respect to such Rights from and
after the occurrence of such Section 11(a)(ii) Event.
The Rights evidenced by this Rights Certificate shall not be
exercisable, and shall be void so long as held, by a holder in
any jurisdiction where the requisite qualification to the
issuance to such holder, or the exercise by such holder, of the
Rights in such jurisdiction shall not have been obtained or be
obtainable.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other
securities, which may be purchased upon the exercise of the
Rights evidenced by this Rights Certificate are subject to
modification and adjustment upon the happening of certain events,
including Triggering Events (as such term is defined in the
Rights Agreement).
This Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities
hereunder of the Rights Agent, the Company and the holders of the
Rights Certificates, which limitations of rights include the
temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the above-mentioned
office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the
Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Right Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a
like aggregate number of one one-thousandths of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate
or Rights Certificates surrendered shall have entitled such
holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon
surrender hereof another Rights Certificate or Rights
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be redeemed by the
Company at its option at a redemption price of $.001 per Right at
any time prior to the earlier of the close of business on (i) the
tenth day following the Stock Acquisition Date (as such time
period may be changed in the discretion of the Board of Directors
pursuant to the Rights Agreement), and (ii) the Final Expiration
Date (as defined in the Rights Agreement). Under certain
circumstances set forth in the Rights Agreement, the decision to
redeem shall require the concurrence of a majority of the
Continuing Directors. After the expiration of the redemption
period, the Company's right of redemption may be reinstated if an
Acquiring Person reduces his beneficial ownership to 5% or less
of the outstanding shares of Common Stock in a transaction or
series of transactions not involving the Company, and such
reinstatement is approved by the Company's Board of Directors
(with the concurrence of a majority of the Continuing Directors).
At any time after a person becomes an Acquiring Person, the
Board of Directors of the Company may exchange the Rights (other
than Rights owned by such Acquiring Person which have become
void), in whole or in part, at an exchange ratio of one share of
Common Stock per Right (subject to adjustment).
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Preferred Stock or of any other
securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give 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 Rights Certificate shall have
been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of
the Company and its corporate seal.
Dated as of ________________ ___, _______
Startec Global Communications Corporation
By:________________________________
Name:______________________________
Title:_____________________________
Attest:
________________________________
Countersigned:
_______________________
_______________________
By:____________________
Authorized Signature
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder desires
to
transfer the Rights Certificate.)
FOR VALUE RECEIVED______________________________________________
hereby sells, assigns and transfers unto________________________
________________________________________________________________
(Please print name and address of transferee) this Rights
Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint
__________________ Attorney, to transfer the within Rights
Certificate on the books of the within-named Company, with full
power of substitution.
Dated:_________________________, ______
_________________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that: (1) this Rights Certificate [ ] is [ ] is not being
sold, assigned and transferred by or on behalf of a Person who
is or was an Acquiring Person or an Affiliate or Associate of
any such Person (as such terms are defined pursuant to the Rights
Agreement); (2) after due inquiry and to the best knowledge of
the undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was
or subsequently became an Acquiring Person or an Affiliate or
Associate of any such Person.
Dated:_________________________, _________
________________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder desires to exercise
Rights
represented by the Rights Certificate.)
To: __________________
The undersigned hereby irrevocably elects to exercise ______
Rights represented by this Rights Certificate to purchase the
shares of Preferred Stock issuable upon the exercise of the
Rights (or such other securities of the Company or of any other
person which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name
of and delivered to:
________________________________________________________________
(Please print name and address)
Please insert social security or other identifying number:
______________________________. If such number of Rights shall
not be all the Rights evidenced by this Rights Certificate, a new
Rights Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
_________________________________________________________________
(Please print name and address)
_________________________________________________________________
Please insert social security or other identifying number:
______________________________.
Dated:________________________________
___________________________
Signature
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate
boxes that: (1) the Rights evidenced by this Rights Certificate
[ ] are [ ] are not being exercised by or on behalf of a Person
who is or was an Acquiring Person or an Affiliate or Associate of
any such Person (as such terms are defined in the Rights
Agreement); (2) after due inquiry and to the best knowledge of
the undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Rights Certificate from any Person who is, was
or became an Acquiring Person or an Affiliate or Associate of any
such Person.
Dated: _______________, ____
______________________________
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and
Certificate must correspond to the name as written upon the face
of this Rights Certificate in every particular, without
alteration or enlargement or any change whatsoever.
