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RIGHTS AGREEMENT
dated as of
November 20, 1998
between
ILLUMINET HOLDINGS, INC.
and
UMB Bank, N.A.,
as Rights Agent
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RIGHTS AGREEMENT
Table of Contents
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ARTICLE I CERTAIN DEFINITIONS.....................................................1
1.1 Certain Definitions............................................................1
ARTICLE II THE RIGHTS..................................................................6
2.1 Legend on Common Stock Certificates............................................6
2.2 Exercise of Rights; Separation of Rights.......................................6
2.3 Adjustments to Purchase Price; Number of Rights................................8
2.4 Date on Which Exercise is Effective............................................9
2.5 Execution, Authentication, Delivery and Dating of Rights Certificates..........10
2.6 Registration, Registration of Transfer and Exchange............................10
2.7 Mutilated, Destroyed, Lost and Stolen Rights Certificates......................11
2.8 Persons Deemed Owners..........................................................12
2.9 Delivery and Cancellation of Certificates......................................12
2.10 Agreement of Rights Holders....................................................12
ARTICLE III ADJUSTMENTS TO THE RIGHTS IN THE EVENT OF CERTAIN TRANSACTIONS.............13
3.1 Flip-in........................................................................13
3.2 Flip-over......................................................................15
ARTICLE IV THE RIGHTS AGENT............................................................15
4.1 General........................................................................15
4.2 Merger or Consolidation or Change of Name of Rights Agent......................16
4.3 Duties of Rights Agent.........................................................16
4.4 Change of Rights Agent.........................................................19
ARTICLE V MISCELLANEOUS................................................................19
5.1 Redemption.....................................................................19
5.2 Expiration.....................................................................20
5.3 Issuance of New Rights Certificates............................................20
5.4 Supplements and Amendments.....................................................20
5.5 Fractional Shares..............................................................21
5.6 Rights of Action...............................................................21
5.7 Holder of Rights Not Deemed a Stockholder......................................21
5.8 Notice of Proposed Actions.....................................................21
5.9 Notices........................................................................22
5.10 Suspension of Exercisability...................................................22
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5.11 Costs of Enforcement...........................................................22
5.12 Successors.....................................................................23
5.13 Benefits of this Agreement.....................................................23
5.14 Determination and Actions by the Board of Directors, etc.......................23
5.15 Descriptive Headings...........................................................23
5.16 Governing Law..................................................................23
5.17 Counterparts...................................................................23
5.18 Severability...................................................................23
EXHIBIT A
Form of Rights Certificate
(Together with Form of
Election to Exercise)
EXHIBIT B
Form of Certificate of Designation
of Series B Participating Cumulative Preference Stock
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RIGHTS AGREEMENT
RIGHTS AGREEMENT dated as of November 20, 1998 between Illuminet
Holdings, Inc., a Delaware corporation (the "Company"), and UMB Bank, N.A., as
Rights Agent (the "Rights Agent", which term shall include any successor Rights
Agent hereunder).
WITNESSETH:
The Board of Directors of the Company has authorized and declared a
dividend of one Right (as hereinafter defined) for each share of Common Stock,
par value $.01 per share, of the Company (the "Common Stock") outstanding at the
Close of Business (as hereinafter defined) on November 20, 1998 (the "Record
Date"), and has authorized the issuance of one Right (as such number may
hereafter be adjusted pursuant to the provisions of this Rights Agreement) with
respect to each share of Common Stock that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the Redemption Date or
the Expiration Date (as such terms are hereinafter defined). Each Right shall
initially represent the right to purchase one one-thousandths (1/1000ths) of a
share of Series B Participating Cumulative Preference Stock, $.01 par value, of
the Company (the "Preference Stock"), having the powers, rights and preferences
set forth in the Certificate of Designation attached as Exhibit B.
NOW THEREFORE, in consideration of the premises and the respective
agreements set forth herein, the parties hereby agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.1 CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
"Acquiring Person" shall mean any Person who is a Beneficial
Owner of 20% or more of the outstanding shares of Common Stock;
provided, however, that the term "Acquiring Person" shall not
include any Person (i) who is the Beneficial Owner of 20% or
more of the outstanding shares of Common Stock on the date of
this Agreement or who shall become the Beneficial Owner of 20%
or more of the outstanding shares of Common Stock solely as a
result of an acquisition by the Company of shares of Common
Stock, until such time hereafter or thereafter as any of such
Persons shall become the Beneficial Owner (other than by means
of a stock dividend or stock split) of any additional shares of
Common Stock, (ii) who is the Beneficial Owner of 20% or more of
the outstanding shares of Common Stock but who acquired
Beneficial Ownership of shares of Common Stock without any plan
or intention to seek or affect control of the Company, if such
Person promptly enters into an irrevocable commitment promptly
to divest, and thereafter promptly divests (without exercising
or retaining any power, including voting, with respect to such
shares), sufficient shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common
Stock) so that such Person ceases to be the Beneficial Owner of
20% or more of the outstanding shares of Common Stock or (iii)
who Beneficially Owns shares of
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Common Stock consisting solely of one or more of (A) shares of
Common Stock Beneficially Owned pursuant to the grant or
exercise of an option granted to such Person by the Company in
connection with an agreement to merge with, or acquire, the
Company entered into prior to a Flip-in Date, (B) shares of
Common Stock (or securities convertible into, exchangeable into
or exercisable for Common Stock) Beneficially Owned by such
Person or its Affiliates or Associates at the time of grant of
such option, (C) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common
Stock) acquired by Affiliates or Associates of such Person after
the time of such grant which, in the aggregate, amount to less
than 1% of the outstanding shares of Common Stock or (D) shares
of Common Stock (or securities convertible into, exchangeable
into or exercisable for Common Stock) which are held by such
Person in trust accounts, managed accounts and the like or
otherwise held in a fiduciary capacity, that are beneficially
owned by third persons who are not Affiliates or Associates of
such Person or acting together with such Person to hold such
shares, or which are held by such Person in respect of a debt
previously contracted. In addition, the Company, any
wholly-owned Subsidiary of the Company and any employee stock
ownership or other employee benefit plan of the Company or a
wholly-owned Subsidiary of the Company shall not be an Acquiring
Person.
"Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 under the Securities
Exchange Act of 1934, as such Rule is in effect on the date of
this Agreement.
A Person shall be deemed the "Beneficial Owner", and to have
"Beneficial Ownership" of, and to "Beneficially Own", any
securities as to which such Person or any of such Person's
Affiliates or Associates is or may be deemed to be the
beneficial owner of pursuant to Rules 13d-3 and 13d-5 under the
Securities Exchange Act, as such Rules are in effect on the date
of this Agreement, as well as any securities as to which such
Person or any of such Person's Affiliates or Associates has the
right to become Beneficial owner (whether such right is
exercisable immediately or only after the passage of time or the
occurrence of conditions) pursuant to any agreement, arrangement
or understanding, or upon the exercise of conversion rights,
exchange rights, rights (other than the Rights), warrants or
options, or otherwise; provided, however, that a Person shall
not be deemed the "Beneficial Owner", or to have "Beneficial
Ownership" of, or to "Beneficially Own", any security (i) solely
because such security has been tendered pursuant to a tender or
exchange offer made by such Person or any of such Person's
Affiliates or Associates until such tendered security is
accepted for payment or exchange or (ii) solely because such
Person or any of such Person's Affiliates or Associates has or
shares the power to vote or direct the voting of such security
pursuant to a revocable proxy given in response to a public
proxy or consent solicitation made to more than ten holders of
shares of a class of stock of the Company registered under
Section 12 of the Securities Exchange Act of 1934 and pursuant
to, and in accordance with, the applicable rules and regulations
under the Securities Exchange Act of 1934, except if such power
(or the
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arrangements relating thereto) is then reportable under Item 6
of Schedule 13D under the Securities Exchange Act of 1934 (or
any similar provision of a comparable or successor report).
Notwithstanding the foregoing, no officer or director of the
Company shall be deemed to Beneficially Own any securities of
any other Person (i) by virtue of any actions such officer or
director takes in such capacity as an officer or director, or
(ii) by virtue of holding such position of officer or director.
For purposes of this Agreement, in determining the percentage of
the outstanding shares of Common Stock with respect to which a
Person is the Beneficial owner, all shares as to which such
Person is deemed the Beneficial owner shall be deemed
outstanding.
"Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in Kansas City, Missouri
are generally authorized or obligated by law or executive order
to close.
"Close of Business" on any given date shall mean 4:00 p.m.,
Kansas City, Missouri time on such date (or, if such date is not
a Business Day, 4:00 p.m., Kansas City, Missouri time on the
next succeeding Business Day).
"Common Stock" shall mean the shares of Common Stock of the
Company.
"Distribution Date" shall mean the close of business on the
earlier of (i) the tenth Business Day (or such later date as the
Board of Directors of the Company may from time to time fix by
resolution adopted prior to the Distribution Date that would
otherwise have occurred) after the date on which any Person
commences a tender or exchange offer which, if consummated,
would result in such Person's becoming an Acquiring Person and
(ii) the Flip-in Date; provided, that if any tender or exchange
offer referred to in clause (i) of this paragraph is canceled,
terminated or otherwise withdrawn prior to the Distribution Date
without the purchase of any shares of Common Stock pursuant
thereto, such offer shall be deemed, for purposes of this
paragraph, never to have been made.
"Exchange Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 3.1(c)
hereof.
"Expiration Time" shall mean the earliest of (i) the Exchange
Time, (ii) the Redemption Time, (iii) the Close of Business on
the 10th anniversary of the date of this Rights Agreement, and
(iv) pursuant to an agreement entered into prior to a Flip-in
Date, upon the merger of the Company into another corporation or
with another corporation in which all shares of Common Stock are
either converted into cash and/or securities of another
corporation or, with respect to treasury shares and shares owned
by the other party to the merger or its affiliates, canceled.
"Flip-in Date" shall mean the tenth business day after any
Shares Acquisition Date or such earlier or later date as the
Board of Directors of the Company may
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from time to time fix by resolution adopted prior to the Flip-in
Date that would otherwise have occurred.
"Flip-over Entity," for purposes of Section 3.2, shall mean (i)
in the case of a Flip-over Transaction or Event described in
clause (i) of the definition thereof, the Person issuing any
securities into which shares of Common Stock are being converted
or exchanged and, if no such securities are being issued, the
other party to such Flip-over Transaction or Event and (ii) in
the case of a Flip-over Transaction or Event referred to in
clause (ii) of the definition thereof, the Person receiving the
greatest portion of the assets or earning power being
transferred in such Flip-over Transaction or Event, provided in
all cases if such Person is a subsidiary of a corporation, the
parent corporation shall be the Flip-over Entity.
"Flip-over Stock" shall mean the capital stock (or similar
equity interest) with the greatest voting power in respect of
the election of directors (or other persons similarly
responsible for direction of the business and affairs) of the
Flip-over Entity.
"Flip-over Transaction or Event" shall mean a transaction or
series of transactions after a Flip-in Date in which, directly
or indirectly, (i) the Company shall consolidate or merge or
participate in a share exchange with any other Person if, at the
time of the consolidation, merger or share exchange or at the
time the Company enters into any agreement with respect to any
such consolidation, merger or share exchange, the Acquiring
Person "controls" the Board of Directors of the Company and
either (A) any term of or arrangement concerning the treatment
of shares of capital stock in such consolidation, merger or
share exchange relating to the Acquiring Person is not identical
to the terms and arrangements relating to other holders of the
Common Stock or (B) the Person with whom the transaction or
series of transactions occurs is the Acquiring Person or an
Affiliate or Associate of the Acquiring Person or (ii) the
Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer) assets (A)
aggregating more than 50% of the assets (measured by either book
value or fair market value) or (B) generating more than 50% of
the operating income or cash flow of the Company and its
Subsidiaries (taken as a whole) to any Person (other than the
Company or one or more of its wholly owned Subsidiaries) or to
two or more such Persons which are Affiliates or Associates or
otherwise acting in concert, if, at the time of the entry by the
Company (or any such Subsidiary) into an agreement with respect
to such sale or transfer of assets, the Acquiring Person
"controls" the Board of Directors of the Company. An Acquiring
Person shall be deemed to "control" the Company's Board of
Directors when, following a Flip-in Date, the persons who were
directors of the Company before the Flip-in Date shall cease to
constitute a majority of the Company's Board of Directors.
"Market Price" per share of any securities on any date shall
mean the average of the daily closing prices per share of such
securities (determined as described below) on each of the 20
consecutive Trading Days through and including the
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Trading Day immediately preceding such date; provided, however,
that if an event of a type analogous to any of the events
described in Section 2.3 hereof shall have caused the closing
prices used to determine the Market Price on any Trading Days
during such period of 20 Trading Days not to be fully comparable
with the closing price on such date, each such closing price so
used shall be appropriately adjusted in order to make it fully
comparable with the closing price on such date. The closing
price per share of any securities on any date shall be the last
reported sale price, regular way, or, in case no such sale takes
place or is quoted on such date, the average of the closing bid
and asked prices, regular way, for each share of such
securities, 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, Inc. or, if the securities are not listed or admitted
to trading on the New York Stock Exchange, Inc., as reported in
the principal consolidated transaction reporting system with
respect to securities listed on the principal national
securities exchange on which the securities are listed or
admitted to trading or, if the securities are not listed or
admitted to trading on any national securities exchange, as
reported by the National Association of Securities Dealers, Inc.
Automated Quotation System or such other system then in use, or,
if on any such date the securities are not listed or admitted to
trading on any national securities exchange or 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 securities selected by the Board of Directors of
the Company; provided, however, that if on any such date the
securities are not listed or admitted to trading on a national
securities exchange or traded in the over-the-counter market,
the closing price per share of such securities on such date
shall mean the fair value per share of securities on such date
as determined in good faith by the Board of Directors of the
Company, after consultation with a nationally recognized
investment banking firm, and set forth in a certificate
delivered to the Rights Agent.
"Person" shall mean any individual, firm, partnership,
association, group (as such term is used in Rule 13d-5 under the
Securities Exchange Act of 1934, as such Rule is in effect on
the date of this Agreement), corporation or other entity.
"Preference Stock" shall mean the Series B Participating
Cumulative Preference Stock of the Company having the rights,
powers and preferences set forth in the Certificate of
Designation attached as Exhibit B hereto.
"Purchase Price" shall mean, as of any date, the price at which
a holder may purchase the securities issuable upon exercise of
one whole Right. Until adjustment thereof in accordance with the
terms hereof, the Purchase Price shall equal $150.00.
"Redemption Price" shall mean an amount equal to $0.01.
"Redemption Time" shall mean the time at which the right to
exercise the Rights shall terminate pursuant to Section 5.1
hereof.
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"Shares Acquisition Date" shall mean the first date of public
announcement by the Company (by any means) that an Acquiring
Person has become such.
"Subsidiary" of any specified Person shall mean any corporation
or other entity of which a majority of the voting power of the
equity securities or a majority of the equity interest is
Beneficially Owned, directly or indirectly, by such Person.
"Trading Day," when used with respect to any securities, shall
mean a day on which the New York Stock Exchange, Inc. is open
for the transaction of business or, if such securities are not
listed or admitted to trading on the New York Stock Exchange,
Inc., a day on which the principal national securities exchange
on which such securities are listed or admitted to trading is
open for the transaction of business or, if such securities are
not listed or admitted to trading on any national securities
exchange, a Business Day.
ARTICLE II
THE RIGHTS
2.1 LEGEND ON COMMON STOCK CERTIFICATES. Prior to the earliest of
the Distribution Date, the Redemption Date or the Expiration Date, certificates
for Common Stock shall evidence one Right for each share of Common Stock
represented thereby and shall have impressed on, printed on, written on or
otherwise affixed to them the following legend:
This certificate also evidences and entitles the holder hereof
to certain Rights as set forth in a Rights Agreement between
Illuminet Holdings, Inc. (the "Company") and UMB Bank, N.A., as
Rights Agent, dated as of November 20, 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 may be
redeemed, may expire, or may be evidenced by separate
certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge within
five days after receipt of a written request therefor. Under
certain circumstances, Rights issued to, or which are or were
Beneficially Owned by, Acquiring Persons or their Affiliates or
Associates (as such terms are defined in the Rights Agreement)
and any subsequent holder of such Rights may become null and
void.
Certificates representing shares of Common Stock issued and outstanding at the
Record Date or issued after the Record Date without the foregoing legend shall
evidence one Right for each share of Common Stock evidenced thereby
notwithstanding the absence of the foregoing legend and the transfer of any of
such certificates representing shares of Common Stock shall also constitute the
transfer of the Rights associated with the Common Stock represented by such
certificates.
2.2 EXERCISE OF RIGHTS; SEPARATION OF RIGHTS.
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(a) Subject to Sections 3.1, 5.1, 5.10 and 5.11 and subject
to adjustment as herein set forth, each Right will entitle the holder
thereof, after the Distribution Date and prior to the Expiration Time,
to purchase, for the Purchase Price, one one-thousandth (1/1000) of a
share of Preference Stock.
(b) Until the Distribution Date, (i) no Right may be
exercised and (ii) each Right will be evidenced by the certificate for
the associated share of Common Stock and will be transferable only
together with, and will be transferred by a transfer of, such associated
share.
(c) Subject to this Section 2.2 and to Sections 3.1, 5.1,
5.10 and 5.11, after the Distribution Date and prior to the Expiration
Time, the Rights (i) may be exercised and (ii) may be transferred
independent of shares of Common Stock. Promptly following the
Distribution Date, the Rights Agent will mail by first class mail at the
Company's expense to each holder of record of Common Stock at such
holder's address as shown by the records of the Company (the Company
hereby agreeing to furnish copies of records of each holder, its
address, tax payer identification number and number of shares held to
the Rights Agent for this purpose), as of the Distribution Date (other
than any Person whose Rights have become void pursuant to Section
3.1(b)), (x) a certificate (a "Rights Certificate") in substantially the
form of Exhibit A hereto appropriately completed, representing the
number of Rights held by such holder at the Distribution Date and having
such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate and
as are not inconsistent with the provisions of this Agreement, or as may
be required to comply with any law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any national
securities exchange or quotation system on which the Rights may from
time to time be listed or traded, or to conform to usage, and (y) a
disclosure statement describing the Rights.
(d) Subject to Sections 3.1, 5.1, 5.10 and 5.11, Rights may
be exercised on any Business Day after the Distribution Date and prior
to the Expiration Time by submitting to the Rights Agent the Rights
Certificate evidencing such Rights with an Election to Exercise (an
"Election to Exercise") substantially in the form attached to the Rights
Certificate duly completed, accompanied by payment in cash, or by
certified or official bank check or money order payable to the order of
the Company, of a sum equal to the Purchase Price multiplied by the
number of Rights being exercised and a sum sufficient to cover any
transfer tax or charge which may be payable in respect of any transfer
involved in the transfer or delivery of Rights Certificates or the
issuance or delivery of certificates for shares or depositary receipts
(or both) in a name other than that of the holder of the Rights being
exercised.
(e) Upon receipt of a Rights Certificate, with an Election
to Exercise accompanied by payment as set forth in Section 2.2(d), and
subject to Sections 3.1, 5.1, 5.10 and 5.11, the Rights Agent will
thereupon promptly (i) (A) requisition from the Company or its transfer
agent stock certificates evidencing such number of shares of Preference
Stock (the Company hereby irrevocably authorizing its transfer agents to
comply with all such requisitions) and (B) requisition from the
depositary selected by the
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Company depositary receipts representing the fractional shares to be
purchased or if the Company elects pursuant to Section 5.5 not to issue
certificates representing fractional shares, requisition from the
Company the amount of cash to be paid in lieu of fractional shares in
accordance with Section 5.5 and (ii) after receipt of such certificates,
depositary receipts and/or cash, deliver the same by first class mail to
or upon the order of the registered holder of such Rights Certificate,
registered (in the case of certificates or depositary receipts) in such
name or names as may be designated by such holder.
(f) In case the holder of any Rights shall exercise less
than all the Rights evidenced by such holder's Rights Certificate, a new
Rights Certificate evidencing the Rights remaining unexercised will be
issued by the Rights Agent to such holder or to such holder's duly
authorized assigns.
(g) The Company covenants and agrees that it will (i) take
all such action as may be necessary to ensure that all shares 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, executed, issued and delivered and fully
paid and nonassessable; (ii) take all such action as may be necessary to
comply with any applicable requirements of the Securities Act of 1933,
the Securities Exchange Act of 1934, and the rules and regulations
thereunder, and any other applicable law, rule or regulation, in
connection with the issuance of any shares upon exercise of Rights; and
(iii) pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the original
issuance or delivery of the Rights Certificates or of any shares issued
upon the exercise of Rights, provided that the holder of the Rights, and
not the Company, shall be required to pay any transfer tax or charge
which may be payable in respect of any transfer involved in the transfer
or delivery of Rights Certificates or the issuance or delivery of
certificates for shares in a name other than that of the holder of the
Rights being transferred or exercised.
2.3 ADJUSTMENTS TO PURCHASE PRICE; NUMBER OF RIGHTS.
(a) In the event the Company shall at any time after the
date hereof and prior to the Distribution Date (i) declare or pay a
dividend on Common Stock payable in Common Stock, (ii) subdivide the
outstanding Common Stock or (iii) combine the outstanding Common Stock
into a smaller number of shares of Common Stock, (x) the Purchase Price
in effect after such adjustment will be equal to the Purchase Price in
effect immediately prior to such adjustment divided by the number of
shares of Common Stock (the "Expansion Factor") that a holder of one
share of Common Stock immediately prior to such dividend, subdivision or
combination would hold thereafter as a result thereof and (y) each Right
held prior to such adjustment will become that number of Rights equal to
the Expansion Factor, and the adjusted number of Rights will be deemed
to be distributed among the shares of Common Stock with respect to which
the original Rights were associated (if they remain outstanding) and the
shares issued in respect of such dividend, subdivision or combination,
so that each such share of Common Stock will have exactly one Right
associated with it. Each adjustment made pursuant to this paragraph
shall be made as of the payment or effective date for the applicable
dividend, subdivision or combination.
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In the event the Company shall at any time after the date hereof
and prior to the Distribution Date issue any shares of Common Stock
otherwise than in a transaction referred to in the preceding paragraph,
each such share of Common Stock so issued shall automatically have one
new Right associated with it, which Right shall be evidenced by the
certificate representing such share. To the extent provided in Section
5.3, Rights shall be issued by the Company in respect of shares of
Common Stock that are issued or sold by the Company after the
Distribution Date.
(b) In the event the Company shall at any time after the
date hereof and prior to the Distribution Date issue or distribute any
securities or assets in respect of, in lieu of or in exchange for Common
Stock (other than pursuant to a regular periodic cash dividend or a
dividend paid solely in Common Stock) whether by dividend, in a
reclassification or recapitalization (including any such transaction
involving a merger, consolidation or share exchange), or otherwise, the
Company shall make such adjustments, if any, in the Purchase Price,
number of Rights and/or securities or other property purchasable upon
exercise of Rights as the Board of Directors of the Company, in its sole
discretion, may deem to be appropriate under the circumstances in order
to adequately protect the interests of the holders of Rights generally,
the Company shall give prompt written notice of any such event to the
Rights Agent, and the Company and the Rights Agent shall amend this
Agreement as necessary to provide for such adjustments.
(c) Each adjustment to the Purchase Price made pursuant to
this Section 2.3 shall be calculated to the nearest cent. Whenever an
adjustment to the Purchase Price is made pursuant to this Section 2.3,
the Company shall (i) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such
adjustment and (ii) promptly file with the Rights Agent and with each
transfer agent for the Common Stock a copy of such certificate.
(d) Rights Certificates shall represent the securities
purchasable under the terms of this Agreement, including any adjustment
or change in the securities purchasable upon exercise of the Rights,
even though such Rights Certificates may continue to express the
securities purchasable at the time of issuance of the initial Rights
Certificates.
2.4 DATE ON WHICH EXERCISE IS EFFECTIVE. Each person in whose name
any certificate for shares of Preference Stock is issued upon the exercise of
Rights shall for all purposes be deemed to have become the holder of record of
the shares represented thereby on the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
for such shares of Preference Stock (and any applicable taxes and other
governmental charges payable by the exercising holder hereunder) was made;
provided, however, that if the date of such surrender and payment is a date upon
which the stock transfer books of the Company are closed, such person shall be
deemed to have become the record holder of such shares of Preference Stock on,
and such certificate shall be dated, the next succeeding Business Day on which
the stock transfer books of the Company are open.
2.5 Execution, Authentication, Delivery and Dating of Rights
Certificates.
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(a) The Rights Certificates shall be executed on behalf of
the Company by its Chairman of the Board, its Chief Executive Officer,
its President, any of its Vice Presidents or its Treasurer, under its
corporate seal reproduced thereon attested by its Secretary or any of
its Assistant Secretaries. The signature of any of these officers on the
Rights Certificates may be manual or facsimile.
Rights Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Company
shall bind the Company, notwithstanding that such individuals or any of
them have ceased to hold such offices prior to the countersignature and
delivery of such Rights Certificates.
Promptly after the Distribution Date, the Company will notify
the Rights Agent of such Distribution Date and will deliver Rights
Certificates executed by the Company to the Rights Agent for
countersignature, and, subject to Section 3.1(b), the Rights Agent shall
manually countersign and deliver such Rights Certificates to the holders
of the Rights pursuant to Section 2.2(c) hereof. No Rights Certificate
shall be valid for any purpose unless manually countersigned by the
Rights Agent.
(b) Each Rights Certificate shall be dated the date of
countersignature thereof.
2.6 REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
(a) After the Distribution Date, the Company will cause to
be kept a register (the "Rights Register") in which, subject to such
reasonable regulations as it may prescribe, the Company will provide for
the registration and transfer of Rights. The Rights Agent is hereby
appointed "Rights Registrar" for the purpose of maintaining the Rights
Register for the Company and registering Rights and transfers of Rights
after the Distribution Date as herein provided. In the event that the
Rights Agent shall cease to be the Rights Registrar, the Rights Agent
will have the right to examine the Rights Register at all reasonable
times after the Distribution Date.
After the Distribution Date and prior to the Expiration Time,
upon surrender for registration of transfer or exchange of any Rights
Certificate, and subject to the provisions of Sections 2.6(c) and (d),
the Company will execute, and the Rights Agent will countersign and
deliver, in the name of the holder or the designated transferee or
transferees, as required pursuant to the holder's instructions, one or
more new Rights Certificates evidencing the same aggregate number of
Rights as did the Rights Certificate so surrendered.
(b) Except as otherwise provided in Section 3.1(b), all
Rights issued upon any registration of transfer or exchange of Rights
Certificates shall be the valid obligations of the Company, and such
Rights shall be entitled to the same benefits under this Agreement as
the Rights surrendered upon such registration of transfer or exchange.
(c) Every Rights Certificate surrendered for registration of
transfer or exchange shall be duly endorsed, or be accompanied by a
written instrument of transfer in form satisfactory to the Rights Agent
or if the Rights Agent shall cease to be the Rights Registrar, in form
satisfactory to the Company, as the case may be, duly executed by the
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holder thereof or such holder's attorney duly authorized in writing. As
a condition to the issuance of any new Rights Certificate under this
Section 2.6, the Company or the Rights Agent may require the payment of
a sum sufficient to cover any tax or other governmental charge that may
be imposed in relation thereto.
(d) The Company and the Rights Agent shall not be required
to register the transfer or exchange of any Rights after such Rights
have become void under Section 3.1(b), been exchanged under Section
3.1(c) or been redeemed or terminated under Section 5.1.
2.7 MUTILATED, DESTROYED, LOST AND STOLEN RIGHTS CERTIFICATES.
(a) If any mutilated Rights Certificate is surrendered to
the Rights Agent prior to the Expiration Time, then, subject to Sections
3.1(b), 3.1(c) and 5.1, the Company shall execute and the Rights Agent
shall countersign and deliver in exchange therefor a new Rights
Certificate evidencing the same number of Rights as did the Rights
Certificate so surrendered.
(b) If there shall be delivered to the Rights Agent prior to
the Expiration Time (i) evidence to its satisfaction of the destruction,
loss or theft of any Rights Certificate and (ii) such security or
indemnity as may be required by it to save the Company and the Rights
Agent and any of their agents harmless, then, subject to Sections
3.1(b), 3.1(c) and 5.1 and in the absence of notice to the Rights Agent
that such Rights Certificate has been acquired by a bona fide purchaser,
the Company shall execute and the Rights Agent shall countersign and
deliver, in lieu of any such destroyed, lost or stolen Rights
Certificate, a new Rights Certificate evidencing the same number of
Rights as did the Rights Certificate so destroyed, lost or stolen.
(c) As a condition to the issuance of any new Rights
Certificate under this Section 2.7, the Company or the Rights Agent may
require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any
other expenses (including without limitation the fees and expenses of
the attorneys and indemnity bond premiums) connected therewith.
(d) Every new Rights Certificate issued pursuant to this
Section 2.7 in lieu of any destroyed, lost or stolen Rights Certificate
shall evidence an original additional contractual obligation of the
Company, whether or not the destroyed, lost or stolen Rights Certificate
shall be at any time enforceable by anyone, and, subject to Section
3.1(b), shall be entitled to all the benefits of this Agreement equally
and proportionately with any and all other Rights duly issued hereunder.
2.8. PERSONS DEEMED OWNERS. Prior to due presentment of a Rights
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) for registration of transfer, the Company, the Rights Agent and any
agent of the Company or the Rights Agent may deem and treat the person in whose
name such Rights Certificate is registered on the Rights Register (or, prior to
the Distribution Date, such Common Stock certificate is registered on the books
of the Company) is registered as the absolute owner thereof and of the Rights
evidenced
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thereby for all purposes whatsoever, including the payment of the Redemption
Price and neither the Company nor the Rights Agent shall be affected by any
notice to the contrary. As used in this Agreement, unless the context otherwise
requires, the term "holder" of any Rights shall mean the registered holder of
such Rights (or, prior to the Distribution Date, the associated shares of Common
Stock).
2.9. DELIVERY AND CANCELLATION OF CERTIFICATES. All Rights
Certificates surrendered upon exercise or for registration of transfer or
exchange shall, if surrendered to any person other than the Rights Agent, be
delivered to the Rights Agent and, in any case, shall be promptly cancelled by
the Rights Agent. The Company may at any time deliver to the Rights Agent for
cancellation any Rights Certificates previously countersigned and delivered
hereunder which the Company may have acquired in any manner whatsoever, and all
Rights Certificates so delivered shall be promptly cancelled by the Rights
Agent. No Rights Certificates shall be countersigned in lieu of or in exchange
for any Rights Certificates cancelled as provided in this Section 2.9, except as
expressly permitted by this Agreement. The Rights Agent shall destroy all
cancelled Rights Certificates in accordance with applicable law.
2.10 AGREEMENT OF RIGHTS HOLDERS. Every holder of Rights by accepting
the same consents and agrees with the Company and the Rights Agent and with
every other holder of Rights that:
(a) prior to the Distribution Date, each Right will be
transferable only together with, and will be transferred by a transfer
of, the associated share of Common Stock;
(b) after the Distribution Date, the Rights Certificates
will be transferable only on the Rights Register as provided herein;
(c) prior to due presentment of a Rights Certificate (or,
prior to the Distribution Date, the associated Common Stock certificate)
for registration of transfer, the Company, the Rights Agent and any
agent of the Company or 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 on the
Rights Register as the absolute owner thereof and of the Rights
evidenced thereby for all purposes whatsoever, and neither the Company
nor the Rights Agent shall be affected by any notice to the contrary;
(d) Rights beneficially owned by certain Persons will, under
the circumstances set forth in Section 3.1(b), become void; and
(e) this Agreement may be supplemented or amended from time
to time pursuant to Section 2.3(b) or 5.4 hereof.
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ARTICLE III
ADJUSTMENTS TO THE RIGHTS IN
THE EVENT OF CERTAIN TRANSACTIONS
3.1 FLIP-IN.
(a) In the event that prior to the Expiration Time a Flip-in
Date shall occur, except as provided in this Section 3.1, each Right
shall constitute the right to purchase from the Company, upon exercise
thereof in accordance with the terms hereof (but subject to Sections
5.10 and 5.11), that number of shares of Common Stock having an
aggregate Market Price on the Shares Acquisition Date equal to twice the
Purchase Price for an amount in cash equal to the Purchase Price (such
right to be appropriately adjusted in order to protect the interests of
the holders of Rights generally in the event that on or after such
Shares Acquisition Date an event of a type analogous to any of the
events described in Section 2.3(a) or (b) shall have occurred with
respect to the Common Stock).
(b) Notwithstanding the foregoing, any Rights that are or
were Beneficially Owned on or after the Shares Acquisition Date by an
Acquiring Person or an Affiliate or Associate thereof or by any
transferee, direct or indirect, of any of the foregoing shall become
void and any holder of such Rights (including transferees) shall
thereafter have no right to exercise or transfer such Rights under any
provision of this Agreement. If any Rights Certificate is presented for
assignment or exercise and the Person presenting the same will not
complete the certification set forth at the end of the form of
assignment or notice of election to exercise and provide such additional
evidence of the identity of the Beneficial Owner and its Affiliates and
Associates (or former Beneficial Owners and their Affiliates and
Associates) as the Company shall reasonably request, then the Company
and the Rights Agent shall be entitled conclusively to deem the
Beneficial Owner thereof to be an Acquiring Person or an Affiliate or
Associate thereof or a transferee of any of the foregoing and
accordingly will deem the Rights evidenced thereby to be void and not
transferable or exercisable.
(c) The Board of Directors of the Company may, at its
option, at any time after a Flip-in Date and prior to the time that an
Acquiring Person becomes the Beneficial Owner of more than 50% of the
outstanding shares of Common Stock, elect to exchange all (but not less
than all) the then outstanding Rights (which shall not include Rights
that have become void pursuant to the provisions of Section 3.1(b)) for
shares of Common Stock at an exchange ratio of one share of Common Stock
per Right, appropriately adjusted in order to protect the interests of
holders of Rights generally in the event that after the Distribution
Date an event of a type analogous to any of the events described in
Section 2.3(a) or (b) shall have occurred with respect to the Common
Stock (such exchange ratio, as adjusted from time to time, being
hereinafter referred to as the "Exchange Ratio").
Immediately upon the action of the Board of Directors of the
Company electing to exchange the Rights, without any further action and
without any notice, the right to exercise the Rights will terminate and
each Right (other than Rights that have become void pursuant to Section
3.1(b)) will thereafter represent only the right to receive a number of
shares of Common Stock equal to the Exchange Ratio. Promptly after the
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action of the Board of Directors electing to exchange the Rights, the
Company shall give notice thereof (specifying the steps to be taken to
receive shares of Common Stock in exchange for Rights) to the Rights
Agent and the holders of the Rights (other than Rights that have become
void pursuant to Section 3.1(b)) outstanding immediately prior thereto
by mailing such notice in accordance with Section 5.9.
Each Person in whose name any certificate for shares of Common
Stock is issued upon the exchange of Rights pursuant to this Section
3.1(c) or Section 3.1(d) shall for all purposes be deemed to have become
the holder of record of the shares 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 any
applicable taxes and other governmental charges payable by the holder
was made; provided, however, that if the date of such surrender and
payment is a date upon which the stock transfer books of the Company are
closed, such Person shall be deemed to have become the record holder of
such shares on, and such certificate shall be dated, the next succeeding
Business Day on which the stock transfer books of the Company are open.
(d) Whenever the Company shall become obligated under
Section 3.1(a) or (c) to issue shares of Common Stock upon exercise of
or in exchange for Rights, the Company, at its option, may substitute
therefor shares of Preference Stock, at a ratio of one one-thousandth
(1/1000) of a share of Preference Stock for each share of Common Stock
so issuable.
(e) In the event that there shall not be sufficient treasury
shares or authorized but unissued shares of Common Stock or Preference
Stock of the Company to permit the exercise or exchange in full of the
Rights in accordance with Section 3.1(a) or (c), the Company shall
either (i) call a meeting of stockholders seeking approval to cause
sufficient additional shares to be authorized (provided that if such
approval is not obtained the Company will take the action specified in
clause (ii) of this sentence) or (ii) take such action as shall be
necessary to ensure and provide, to the extent permitted by applicable
law and any agreements or instruments in effect on the Shares
Acquisition Date to which it is a party, that each Right shall
thereafter constitute the right to receive, (x) at the Company's option,
either (A) in return for the Purchase Price, debt or equity securities
or other assets (or a combination thereof) having a fair value equal to
twice the Purchase Price, or (B) without payment of consideration
(except as otherwise required by applicable law), debt or equity
securities or other assets (or a combination thereof) having a fair
value equal to the Purchase Price, or (y) if the Board of Directors of
the Company elects to exchange the Rights in accordance with Section
3.1(c), debt or equity securities or other assets (or a combination
thereof) having a fair value equal to the product of the Market Price of
a share of Common Stock on the Flip-in Date times the Exchange Ratio in
effect on the Flip-in Date, where in any case set forth in (x) or (y)
above the fair value of such debt or equity securities or other assets
shall be as determined in good faith by the Board of Directors of the
Company, after consultation with a nationally recognized investment
banking firm.
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3.2. FLIP-OVER.
(a) Prior to the Expiration Time, the Company shall not
enter into any agreement with respect to, consummate or permit to occur
any Flip-over Transaction or Event unless and until it shall have
entered into a supplemental agreement with the Flip-over Entity, for the
benefit of the holders of the Rights, providing that, upon consummation
or occurrence of the Flip-over Transaction or Event (i) each Right shall
thereafter constitute the right to purchase from the Flip-over Entity,
upon exercise thereof in accordance with the terms hereof, that number
of shares of Flip-over Stock of the Flip-over Entity having an aggregate
Market Price on the date of consummation or occurrence of such Flip-over
Transaction or Event equal to twice the Purchase Price for an amount in
cash equal to the Purchase Price (such right to be appropriately
adjusted in order to protect the interests of the holders of Rights
generally in the event that after such date of consummation or
occurrence of an event of a type analogous to any of the events
described in Section 2.3(a) or (b) shall have occurred with respect to
the Flip-over Stock) and (ii) the Flip-over Entity shall thereafter be
liable for, and shall assume, by virtue of such Flip-over Transaction or
Event and such supplemental agreement, all the obligations and duties of
the Company pursuant to this Agreement. The provisions of this Section
3.2 shall apply to successive Flip-over Transactions or Events.
(b) Prior to the Expiration Time, unless the Rights will be
redeemed pursuant to Section 5.1 hereof in connection therewith, the
Company shall not enter into any agreement with respect to, consummate
or permit to occur any Flip-over Transaction or Event if at the time
thereof there are any rights, warrants or securities outstanding or any
other arrangements, agreements or instruments that would eliminate or
otherwise diminish in any material respect the benefits intended to be
afforded by this Rights Agreement to the holders of Rights upon
consummation of such transaction.
ARTICLE IV
THE RIGHTS AGENT
4.1 GENERAL.
(a) The Company hereby appoints the Rights Agent to act as
agent for the Company in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The
Company agrees to pay to the Rights Agent reasonable compensation for
all services rendered by it hereunder and, from time to time, on demand
of the Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability, or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the
Rights Agent, for anything done or omitted to be done by the Rights
Agent in connection with the acceptance and administration of this
Agreement, including without limitation the costs and expenses of
defending against any claim of liability. The indemnity provided for
herein shall survive the expiration or redemption of the Rights and the
termination of this Agreement.
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(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by
it in connection with its administration of this Agreement in reliance
upon any certificate for securities purchasable upon exercise of Rights,
Rights Certificate, certificate 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.
4.2. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be
consolidated, or any corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights Agent is
a party, or any corporation succeeding to the stockholder services
business of the Rights Agent or any successor Rights Agent, will be the
successor to the Rights Agent under this Agreement without the execution
or filing of any paper or any further act on the part of any of the
parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section
4.4 hereof. In case at the time such successor Rights Agent succeeds to
the agency created by this Agreement any of the Rights Certificates 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 have not been countersigned, any
successor Rights Agent may countersign such Rights Certificates in the
name of the successor Rights Agent; and in all such cases such Rights
Certificates will have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent is
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Rights Certificates so
countersigned; and in case at that time any of the Rights Certificates
shall not have been countersigned, the Rights Agent may countersign such
Rights Certificates either in its prior name or in its changed name; and
in all such cases such Rights Certificates shall have the full force
provided in the Rights Certificates and in this Agreement.
4.3 DUTIES OF RIGHTS AGENT. The Rights Agent undertakes only the
specific duties and obligations expressly imposed by this Agreement and no
implied duties or obligations shall be read into this Agreement against the
Rights Agent, upon the following terms and conditions, by all of which the
Company and the holders of 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 Rights Agent or the Company), and the opinion
of such counsel will be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in good
faith and in accordance with such opinion.
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(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that any fact
or matter be proved or established by the Company prior to taking or
suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively proved and established by a certificate signed
by a person believed by the Rights Agent to be the Chairman of the
Board, the Chief Executive Officer, the President or any Vice President
and by the Treasurer or the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate will be
full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance
upon such certificate.
(c) The Rights Agent will be liable hereunder only for its
own gross negligence, bad faith or willful misconduct.
(d) The Rights Agent will not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or
in the certificates for securities purchasable upon exercise of Rights
or the Rights Certificates (except its countersignature thereof) or be
required to verify the same, but all such statements and recitals are
and will be deemed to have been made by the Company only.
(e) The Rights Agent will not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due authorization, execution and delivery hereof by
the Rights Agent) or in respect of the validity or execution of any
certificate for securities purchasable upon exercise of Rights or Rights
Certificate (except its countersignature thereof), nor will it be
responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Rights Certificate; nor will it be
responsible for any change in the exercisability of the Rights
(including the Rights becoming void pursuant to Section 3.1(b) hereof)
or any adjustment required under the provisions of Section 2.3, 3.1 or
3.2 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 after receipt of the certificate contemplated by Section 2.3
describing any such adjustment); nor will it by any act hereunder be
deemed to make any representation or warranty as to the authorization or
reservation of any securities purchasable upon exercise of Rights or any
Rights or as to whether any securities purchasable upon exercise of
Rights will, when issued, be duly and validly authorized, executed,
issued and delivered and fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged
and delivered all such further and other acts, instruments and
assurances as may reasonably be required by the Rights Agent for the
carrying out or performing by the Rights Agent of the provisions of this
Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any person believed by the
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Rights Agent to be the Chairman of the Board, the Chief Executive
Officer, the President or any Vice President or the Secretary or any
Assistant Secretary or the Treasurer of the Company, and to apply to
such persons for advice or instructions in connection with its duties,
and it shall not be liable for any action taken or suffered by it in
good faith in accordance with instructions of any such person or for any
delay in acting while waiting for such instructions.
(h) The Rights Agent and any stockholder, director, officer
or employee of the Rights Agent may buy, sell or deal in Common Stock,
Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and
freely as though it were not Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent from acting in any other capacity
for the Company or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the Rights
Agent will not be answerable or accountable for any act, default,
neglect or misconduct of any such attorneys or agents or for any loss to
the Company resulting from any such act, default, neglect or misconduct,
provided reasonable care was exercised in the selection and continued
employment thereof.
(j) The Rights Agent shall have no responsibility to the
Company, any holders of Rights or any other securities of the Company
for interest or earnings on any monies held by the Rights Agent pursuant
to this Agreement.
(k) The Rights Agent shall not be required to take notice or
be deemed to have notice of any event or condition hereunder, including,
but not limited to, a Distribution Date, a Redemption Date, any
adjustment of the Purchase Price, the Preference Stock or the Common
Stock, the existence of an Acquiring Person or a Beneficial Owner or any
other event or condition that may require action by the Rights Agent,
unless the Rights Agent shall be specifically notified in writing of
such event or condition by the Company, and all notices or other
requirements required by this Agreement to be delivered to the Rights
Agent must, in order to be effective, be received at the principal
office of the Rights Agent, and in the absence of such notice so
delivered, the Rights Agent may conclusively assume no such event or
condition exists.
4.4 CHANGE OF RIGHTS AGENT. The Rights Agent may resign and be
discharged from its duties under this Agreement upon 90 days' notice (or such
lesser notice as is acceptable to the Company) in writing mailed to the Company
and to each transfer agent of Common Stock by registered or certified mail. The
Company may remove the Rights Agent upon 30 days' notice in writing, mailed to
the Rights Agent and to each transfer agent of the Common Stock by registered or
certified mail. If the Rights Agent should resign or be removed or otherwise
become incapable of acting, the Company will appoint a successor to the Rights
Agent. If the Company fails to make such appointment within a period of 30 days
after 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
any Rights (which holder shall, with such notice, submit such
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holder's Rights Certificate for inspection by the Company), then the holder of
any Rights or the resigning or removed Rights Agent may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the Company or by such a court, shall be a
corporation organized and doing business under the laws of the United States or
of any other State of the United States, in good standing, which is authorized
under such laws to exercise the powers of the Rights Agent contemplated by this
Agreement and is subject to supervision or examination by federal or state
authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $50,000,000. After appointment, the
successor Rights Agent will be vested with the same powers, rights, protections,
immunities, duties and responsibilities as if it had been originally named as
Rights Agent without further act or deed and the duties and obligations of the
predecessor Rights Agent hereunder shall cease and terminate; 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 will file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock. Failure to give any notice provided for in this Section 4.4,
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.
ARTICLE V
MISCELLANEOUS
5.1 REDEMPTION.
(a) The Board of Directors of the Company may, at its
option, at any time prior to the Close of Business on the Flip-in Date,
elect to redeem all (but not less than all) the then outstanding Rights
at the Redemption Price and the Company, at its option, may pay the
Redemption Price either in cash or shares of Common Stock or other
securities of the Company deemed by the Board of Directors, in the
exercise of its sole discretion, to be at least equivalent in value to
the Redemption Price.
(b) Immediately upon the action of the Board of Directors of
the Company electing to redeem the Rights (or, if the resolution of the
Board of Directors electing to redeem the Rights states that the
redemption will not be effective until the occurrence of a specified
future time or event, upon the occurrence of such future time or event),
without any further action and without any notice, the right to exercise
the Rights will terminate and each Right will thereafter represent only
the right to receive the Redemption Price in cash or securities, as
determined by the Board of Directors. Promptly after the Rights are
redeemed, the Company shall give notice of such redemption to the Rights
Agent and the holders of the then outstanding Rights by mailing such
notice in accordance with Section 5.9.
5.2. EXPIRATION. The Rights and this Agreement shall expire at the
Expiration Time and no Person shall have any rights pursuant to this Agreement
or any Right after the Expiration Time, except, if the Rights are exchanged or
redeemed, as provided in Section 3.1 or 5.1 hereof.
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5.3 ISSUANCE OF NEW RIGHTS CERTIFICATES. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by its Board of Directors to reflect any adjustment or change in
the number or kind or class of shares of stock purchasable upon exercise of
Rights made in accordance with the provisions of this Agreement. In addition, in
connection with the issuance or sale of shares of Common Stock by the Company
following the Distribution Date and prior to the Expiration Time pursuant to the
terms of securities convertible or redeemable into shares of Common Stock or to
options, in each case issued or granted prior to, and outstanding at, the
Distribution Date, the Company shall issue to the holders of such shares of
Common Stock, Rights Certificates representing the appropriate number of Rights
in connection with the issuance or sale of such shares of Common Stock;
provided, however, in each case, (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 to the Person to whom such Rights Certificates would be issued,
(ii) no such Rights Certificates shall be issued if, and to the extent that,
appropriate adjustment shall have otherwise been made in lieu of the issuance
thereof, and (iii) the Company shall have no obligation to distribute Rights
Certificates to any Acquiring Person or Affiliate or Associate of an Acquiring
Person or any transferee of any of the foregoing.
5.4 SUPPLEMENTS AND AMENDMENTS. The Company and the Rights Agent may
from time to time 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) prior to the Distribution
Date, to change or supplement the provisions hereunder which the Company may
deem necessary or desirable, or (iv) following the Distribution Date, to change
or supplement the provisions hereunder in any manner which the Company may deem
necessary or desirable and which shall not adversely affect the interests of the
holders of Rights Certificates. Upon the delivery of a certificate from an
appropriate officer of the Company, upon which the Rights Agent is entitled to
rely, which states that the proposed supplement or amendment is in compliance
with the terms of this Section 5.4, the Rights Agent shall execute such
supplement or amendment unless the Rights Agent shall have determined in good
faith that such supplement or amendment would adversely affect its interests
under this Agreement. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Common Stock.
5.5 FRACTIONAL SHARES. If the Company elects not to issue
certificates representing fractional shares upon exercise or redemption of
Rights, the Company shall, in lieu thereof, in the sole discretion of the Board
of Directors, either (a) evidence such fractional shares by depositary receipts
issued pursuant to an appropriate agreement between the Company and a depositary
selected by it, providing that each holder of a depositary receipt shall have
all of the rights, privileges and preferences to which such holder would be
entitled as a beneficial owner of such fractional share, or (b) sell such shares
on behalf of the holders of Rights and pay to the registered holder of such
Rights the appropriate fraction of the price per share received upon such sale.
5.6 RIGHTS OF ACTION. Subject to the terms of this Agreement
(including Section 3.1(b)), rights of action in respect of this Agreement, other
than rights of action vested
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solely in the Rights Agent, are vested in the respective holders of the Rights;
and any holder of any Rights, without the consent of the Rights Agent or of the
holder of any other Rights, may, on such holder's own behalf and for such
holder's own benefit and the benefit of other holders of Rights, enforce, and
may institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, such holder's right to exercise such
holder's Rights in the manner provided in such holder's Rights Certificate and
in this Agreement. Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.
5.7 HOLDER OF RIGHTS NOT DEEMED A STOCKHOLDER. No holder, as such,
of any Rights shall be entitled to vote, receive dividends or be deemed for any
purpose the holder of shares or any other securities which may at any time be
issuable on the exercise of such Rights, nor shall anything contained herein or
in any Rights Certificate be construed to confer upon the holder of any Rights,
as such, any of the rights of a stockholder of the Company or any right to vote
for the election of directors or upon any matter submitted to stockholders at
any meeting thereof, or to give or withhold consent to any corporate action, or
to receive notice of meetings or other actions affecting stockholders (except as
provided in Section 5.8 hereof), or to receive dividends or subscription rights,
or otherwise, until such Rights shall have been exercised or exchanged in
accordance with the provisions hereof.
5.8 NOTICE OF PROPOSED ACTIONS. In case the Company shall propose
after the Distribution Date and prior to the Expiration Time (i) to effect or
permit occurrence of any Flip-over Transaction or Event or (ii) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to each holder of a Right, in accordance with Section 5.9
hereof, a notice of such proposed action, which shall specify the date on which
such Flip-over Transaction or Event, liquidation, dissolution, or winding up is
to take place, and such notice shall be so given at least 20 Business Days prior
to the date of the taking of such proposed action.
5.9 NOTICES. Notices or demands authorized or required by this
Agreement to be given or made by the Rights Agent or by the holder of any Rights
to or on the Company shall be sufficiently given or made if delivered or sent by
first-class mail, postage prepaid, addressed (until another address is filed in
writing with the Rights Agent) as follows:
Illuminet Holdings, Inc.
0000 Xxxxxxx Xxxx X.X.
X.X. Xxx 0000
Xxxxxxx, XX 00000
Attention: Secretary
Any notice or demand authorized or required by this Agreement to be given or
made by the Company or by the holder of any Rights to or on the Rights Agent
shall be sufficiently given or made if delivered or received by registered or
certified mail, postage prepaid, addressed (until another address is filed in
writing with the Company) as follows:
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UMB Bank, N.A., as Rights Agent
000 Xxxxx Xxxxxx
X.X. Xxx 000000
Xxxxxx Xxxx, XX 00000-0000
Attention: Corporate Trust Department
Notices or demands authorized or required by this Agreement to be given or made
by the Company or the Rights Agent to or on the holder of any Rights shall be
sufficiently given or made if delivered or sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as it appears
upon the Rights Register or, prior to the Distribution Date, on the registry
books of the transfer agent for the Common Stock. Any notice to any holder which
is mailed in the manner herein provided shall be deemed given, whether or not
the holder receives the notice. Failure to give a notice pursuant to the
provisions of this Agreement shall not affect the validity of any action taken
hereunder.
5.10 SUSPENSION OF EXERCISABILITY. To the extent that the Company
determines in good faith that some action will or need be taken pursuant to
Section 3.1 or to comply with federal or state securities laws, the Company may
suspend the exercisability of the Rights for a reasonable period in order to
take such action or comply with such laws. In the event of any such suspension,
the Company shall issue as promptly as practicable a public announcement stating
that the exercisability or exchangeability of the Rights has been temporarily
suspended. Notice thereof pursuant to Section 5.9 shall not be required.
5.11 COSTS OF ENFORCEMENT. The Company agrees that if the Company or
any other Person the securities of which are purchasable upon exercise of Rights
fails to fulfill any of its obligations pursuant to this Agreement, then the
Company or such Person will reimburse the holder of any Rights for the costs and
expenses (including legal fees) incurred by such holder in actions to enforce
such holder's rights pursuant to any Rights or this Agreement.
5.12 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.
5.13 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
holders of the Rights any legal or equitable right, remedy or claim under this
Agreement and this Agreement shall be for the sole and exclusive benefit of the
Company, the Rights Agent and the holders of the Rights.
5.14 DETERMINATION AND ACTIONS BY THE BOARD OF DIRECTORS, ETC. The
Board of Directors of the Company shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically
granted to the Board or 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. All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith, shall (x) be
final, conclusive and binding on the Company, the
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Rights Agent, the holders of the Rights and all other parties, and (y) not
subject the Board of Directors of the Company to any liability to the holders of
the Rights.
5.15 DESCRIPTIVE HEADINGS. Descriptive headings appear herein for
convenience only and shall not control or affect the meaning or construction of
any of the provisions hereof.
5.16 GOVERNING LAW. THIS AGREEMENT AND EACH RIGHT ISSUED HEREUNDER
SHALL BE DEEMED TO BE A CONTRACT MADE UNDER THE LAWS OF THE STATE OF DELAWARE
AND FOR ALL PURPOSES SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF SUCH STATE APPLICABLE TO CONTRACTS TO BE MADE AND PERFORMED ENTIRELY
WITHIN SUCH STATE.
5.17 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
5.18 SEVERABILITY. If any term or provision hereof or the application
thereof to any circumstance shall, in any jurisdiction and to any extent, be
invalid or unenforceable, such term or provision shall be ineffective as to such
jurisdiction to the extent of such invalidity or unenforceability without
invalidating or rendering unenforceable the remaining terms and provisions
hereof or the application of such term or provision to circumstances other than
those as to which it is held invalid or unenforceable.
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27
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ILLUMINET HOLDINGS, INC.
By:
-------------------------------------
Name:
----------------------------------
Title:
----------------------------------
UMB BANK, N.A., AS RIGHTS AGENT
By:
-------------------------------------
Name:
----------------------------------
Title:
----------------------------------
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EXHIBIT A
[FORM OF RIGHTS CERTIFICATE]
Certificate No. ________ Rights
THE RIGHTS ARE SUBJECT TO REDEMPTION OR MANDATORY EXCHANGE, AT THE
OPTION OF THE COMPANY, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR AFFILIATES OR
ASSOCIATES THEREOF (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT)
OR TRANSFEREES OF ANY OF THE FOREGOING WILL BE VOID.
RIGHTS CERTIFICATE
ILLUMINET HOLDINGS, INC.
This certifies that _________________, or registered assigns, is the
registered holder of the number of Rights set forth above, each of which
entitles the registered holder thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of November 20, 1998 (as amended
from time to time, the "Rights Agreement"), between Illuminet Holdings, Inc., a
Delaware corporation (the "Company"), and UMB Bank, N.A., as Rights Agent (the
"Rights Agent", which term shall include any successor Rights Agent under the
Rights Agreement), to purchase from the Company at any time after the
Distribution Date (as such term is defined in the Rights Agreement) and prior to
the Close of Business (as such term is defined in the Rights Agreement) on
______________, one one-thousandth of a fully paid share of Series B
Participating Cumulative Preference Stock, $.01 par value (the "Preference
Stock"), of the Company (subject to adjustment as provided in the Rights
Agreement) at the Purchase Price referred to below, upon presentation and
surrender of this Rights Certificate with the Form of Election to Exercise duly
executed at the principal office of the Rights Agent in Kansas City, Missouri.
The Purchase Price shall initially be $150.00 per Right and shall be subject to
adjustment in certain events as provided in the Rights Agreement.
29
In certain circumstances described in the Rights Agreement, the Rights
evidenced hereby may entitle the registered holder thereof to purchase
securities of an entity other than the Company or securities or assets of the
Company other than Preference Stock, all as provided 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
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. Copies of the Rights
Agreement are on file at the principal office of the Company and are available
without cost upon written request.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the office of the Rights Agent designated for such purpose, may be
exchanged for another Rights Certificate or Rights Certificates of like tenor
evidencing an aggregate number of Rights equal to the aggregate number of Rights
evidenced by the Rights Certificate or Rights Certificates surrendered. If this
Rights Certificate shall be exercised in part, the registered 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, each Right evidenced
by this Certificate may be (a) redeemed by the Company under certain
circumstances, at its option, at a redemption price of $0.01 per Right or (b)
exchanged by the Company under certain circumstances, at its option, for one
share of Common Stock or one one-thousandth of a share of Preference Stock per
Right (or, in certain cases, other securities or assets of the Company), subject
in each case to adjustment in certain events 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 any securities
which may at any time be issuable on the exercise hereof, nor shall anything
contained in the Rights Agreement or herein be construed
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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 Rights
evidenced by this Rights Certificate shall have been exercised or exchanged 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.
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WITNESS the facsimile signature of the proper officers of the Company
and its corporate seal.
ATTEST: ILLUMINET HOLDINGS, INC.
By
-------------------------------------
Secretary
Countersigned:
Date:
---------------------------
UMB BANK, N.A., as Rights Agent
By:
-----------------------------
Authorized Signature
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[FORM OF REVERSE SIDE OF RIGHTS CERTIFICATE]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer this 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-named Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated:
---------------------------
Signature Guaranteed:
---------------------------------------
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
Signatures must be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee Medallion program), pursuant to
SEC Rule 17Ad-15.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of Rights and
shares of Common Stock, that the Rights evidenced by this Rights Certificate are
not, and, to the
33
knowledge of the undersigned, have never been, Beneficially Owned by an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement).
Signature
--------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported assignment, the Company will deem the Beneficial
Owner of the Rights evidenced by the enclosed Rights Certificate to be an
Acquiring Person or an Affiliate or Associate thereof (as defined in the Rights
Agreement) or a transferee of any of the foregoing and accordingly will deem the
Rights evidenced by such Rights Certificate to be void and not transferable or
exercisable.
[To be attached to each Rights Certificate]
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FORM OF ELECTION TO EXERCISE
(To be executed if holder desires to
exercise the Rights Certificate.)
TO: ILLUMINET HOLDINGS, INC.
The undersigned hereby irrevocably elects to exercise __________ whole
Rights represented by the attached Rights Certificate to purchase the shares of
Preference Stock issuable upon the exercise of such Rights and requests that
certificates for such shares be issued in the name of:
Address:
--------------------------------------
Social Security or Other Taxpayer
Identification 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:
Address:
--------------------------------------
Social Security or Other Taxpayer
Identification Number:
-----------------------
Under penalties of perjury, I certify that:
1. The number shown on this form is my correct taxpayer identification
number (or I am waiting for a number to be issued to me), and
2. I am not subject to backup withholding because: (a) I am exempt from
backup withholding, or (b) I have not been notified by the Internal
Revenue Service (IRS) that I am subject to backup withholding as a
result of a failure to report all interest or dividends, or (c) the IRS
has notified me that I am no longer subject to backup withholding.
CERTIFICATION INSTRUCTIONS--You must cross out item 2 above if you have been
notified by the IRS that you are currently subject to backup withholding because
you have failed to report all interest and dividends on your tax return.
Dated:
--------------------------
Signature
(Signature must correspond to name as
written upon the face of this Rights
Certificate in every particular, without
alteration or enlargement or any change
whatsoever)
35
Signature Guarantee:
---------------------------
Signatures must be guaranteed by an eligible guarantor institution
(banks, stockbrokers, savings and loan associations and credit unions with
membership in an approved signature guarantee Medallion program), pursuant to
SEC Rule 17Ad-15.
--------------------------------------------------------------------------------
(To be completed if true)
The undersigned hereby represents, for the benefit of all holders of
Rights and shares of Common Stock, that the Rights evidenced by the attached
Rights Certificate are not, and, to the knowledge of the undersigned, have never
been, Beneficially Owned by an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement).
Signature
--------------------------------------------------------------------------------
NOTICE
In the event the certification set forth above is not completed in
connection with a purported exercise, the Company will deem the Beneficial Owner
of the Rights evidenced by the attached Rights Certificate to be an Acquiring
Person or an Affiliate or Associate thereof (as defined in the Rights Agreement)
or a transferee of any of the foregoing and accordingly will deem the Rights
evidenced by such Rights Certificate to be void and not transferable or
exercisable.
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36
EXHIBIT B
FORM OF
CERTIFICATE OF DESIGNATION
OF
ILLUMINET HOLDINGS, INC.
SERIES B
PARTICIPATING CUMULATIVE
PREFERENCE STOCK
PURSUANT TO SECTIONS 151 OF THE GENERAL
CORPORATION LAW OF THE STATE OF DELAWARE
Illuminet Holdings, Inc., a corporation organized and existing under and
by virtue of The General Corporation Law of Delaware, DOES HEREBY CERTIFY:
That at a meeting of the Board of Directors of Illuminet Holdings, Inc.
(the "Corporation") the following resolution was duly adopted creating 7,000
shares of Preference Stock, par value $.01 per share, designated as Series B
Participating Cumulative Preference Stock.
RESOLVED, that pursuant to the authority granted to and vested
in the Board of Directors of this Corporation in accordance with
the provisions of the Certificate of Incorporation, a series of
Preference Stock of the Corporation be, and it hereby is
created, and the designation and amount thereof and the relative
rights, preferences and limitations thereof are as follows:
1. Designation and Number. The designation of this series is the
"Series B Participating Cumulative Preference Stock" (hereinafter, this
"Series"). The number of shares initially constituting this Series shall be
seven thousand (7,000) shares; provided, however, that, if more than a total of
7,000 shares of this Series shall be issuable upon the exercise of Rights (the
"Rights") issued pursuant to the Rights Agreement dated as of November 20, 1998,
between the Corporation and UMB Bank, N.A., as Rights Agent (the "Rights
Agreement"), the Board of Directors of the Corporation, pursuant to Section
151(g) of the General Corporation Law of the State of Delaware, shall direct by
resolution or resolutions that a certificate be properly executed, acknowledged,
filed and recorded, in accordance with the provisions of Section 103 thereof,
providing for the total number of shares of this Series authorized to be issued
to be increased (to the extent that the Certificate of Incorporation then
permits) to the largest number of whole shares (rounded up to the nearest whole
number) issuable upon exercise of such Rights.
2. Dividends.
a. Subject to the prior and superior rights of the holders
of shares of any other series of Preference Stock or other class of
capital stock of the Corporation ranking prior and superior to the
shares of this Series with respect to dividends, the holders of
37
shares of this Series shall be entitled to receive, when, as and if
declared by the Board of Directors, out of the assets of the Corporation
legally available therefor, (1) quarterly dividends payable on the first
day of each of March, June, September and December (each such date being
referred to herein as a "Quarterly Dividend Payment Date"), commencing
on the first Quarterly Dividend Payment Date after the first issuance of
a share or a fraction of a share of this Series, in the amount of $.01
per whole share (rounded to the nearest cent) less the amount of all
cash dividends declared on this Series pursuant to the following clause
(2) 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 this Series (the
total of which shall not, in any event, be less than zero), and (2)
dividends payable in cash on the payment date for each cash dividend
declared on the Common Stock in an amount per whole share (rounded to
the nearest cent) equal to the Formula Number (as hereinafter defined)
then in effect times the cash dividends then to be paid on each share of
Common Stock, par value $.01, of the Corporation (the "Common Stock").
In addition, if the Corporation shall pay any dividend or make any
distribution on the Common Stock payable in assets, securities or other
forms of noncash consideration (other than dividends or distributions
solely in shares of Common Stock), then, in each such case, the
Corporation shall simultaneously pay or make on each outstanding whole
share of this Series B dividend or distribution in like kind equal to
the Formula Number then in effect times such dividend or distribution on
each share of the Common Stock. As used herein, the "Formula Number"
shall be 1,000; provided, however, that, if at any time after November
20, 1998, the Corporation shall (i) declare or pay any dividend on the
Common Stock payable in shares of Common Stock or make any distribution
on the Common Stock in shares of Common Stock, (ii) subdivide (by a
stock split or otherwise) the outstanding shares of Common Stock into a
larger number of shares of Common Stock or (iii) combine (by a reverse
stock split or otherwise) the outstanding shares of Common Stock into a
smaller number of shares of Common Stock, then in each such event the
Formula Number shall be adjusted to a number determined by multiplying
the Formula Number in effect immediately prior to such event by a
fraction, the numerator of which is the number of shares of Common Stock
that are outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that are outstanding
immediately prior to such event (and rounding the result to the nearest
whole number); and provided further, that, if at any time after November
20, 1998, the Corporation shall issue any shares of its capital stock in
a merger, reclassification, or change of the outstanding shares of
Common Stock, then in each such event the Formula Number shall be
appropriately adjusted to reflect such merger, reclassification or
change so that each share of Preferred Stock continues to be the
economic equivalent of a Formula Number of shares of Common Stock prior
to such merger, reclassification or change.
b. The Corporation shall declare a dividend or distribution
on this Series provided in Section 2(a) immediately prior to or at the
same time it declares a dividend or distribution on the Common Stock
(other than a dividend or distribution solely in shares of Common
Stock); provided, however, that, in the event no dividend or
distribution (other than a dividend or distribution in shares of Common
Stock) 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
2
38
$0.01 per share on this Series shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date. The Board of Directors may
fix a record date for the determination of holders of shares of this
Series entitled to receive a dividend or distribution declared thereon,
which record date shall be the same as the record date for any
corresponding dividend or distribution on the Common Stock.
c. Dividends shall begin to accrue and be cumulative on
outstanding shares of this Series from and after the Quarterly Dividend
Payment Date next preceding the date of original issue of such shares of
this Series; provided, however, that dividends on such shares which are
originally issued after the record date for the determination of holders
of shares of this Series entitled to receive a quarterly dividend and on
or prior to the next succeeding Quarterly Dividend Payment Date shall
begin to accrue and be cumulative from and after such Quarterly Dividend
Payment Date. Notwithstanding the foregoing, dividends on shares of this
Series which are originally issued prior to the record date for the
determination of holders of shares of this Series entitled to receive a
quarterly dividend on the first Quarterly Dividend Payment Date shall be
calculated as if cumulative from and after the last day of the fiscal
quarter next preceding the date of original issuance of such shares.
Accrued but unpaid dividends shall not bear interest. Dividends paid on
the shares of this Series 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.
d. So long as any shares of this Series are outstanding, no
dividends or other distributions shall be declared, paid or distributed,
or set aside for payment or distribution, on the Common Stock unless, in
each case, the dividend required by this Section 2 to be declared on
this Series shall have been declared.
e. The holders of the shares of this Series shall not be
entitled to receive any dividends or other distributions except as
provided herein.
3. Liquidation Rights. In the event of the liquidation, dissolution
or winding up of the Corporation ("Liquidation"), whether voluntary or
involuntary, no distribution shall be made (1) to the holders of shares of stock
ranking junior to this Series unless, prior thereto, the holders of this Series
shall have received an amount equal to the accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment,
plus an amount equal to the greater of (x) $.01 per whole share or (y) an
aggregate amount per share equal to the Formula Number then in effect times the
aggregate amount to be distributed per share to holders of Common Stock, or (2)
to the holders of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with this Series, except distributions
made ratably on this Series and all other such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up.
If upon any Liquidation, the assets of the Corporation or proceeds
thereof distributable among the holders of shares of this Series and of any
class or series of capital stock of the Corporation ranking equally with this
Series as to distribution of assets upon Liquidation shall be insufficient to
pay in full the preferential amounts payable to such holders, then such assets
or the proceeds thereof shall be distributed among such holders ratably in
accordance with the
3
39
respective amounts that would be payable on such shares if all amounts payable
thereon were paid in full.
4. Voting Rights. The holders of shares of this Series shall have
the following voting rights:
a. Each holder of this Series shall be entitled to a number
of votes equal to the Formula Number then in effect, for each share of
this Series held of record on each matter on which holders of the Common
Stock or stockholders generally are entitled to vote, multiplied by the
maximum number of votes per share which any holder of the Common Stock
or stockholders generally then have with respect to such matter
(assuming any holding period or other requirement to vote a greater
number of shares is satisfied).
b. Except as otherwise provided herein or by applicable
law, the holders of shares of this Series and the holders of shares of
Common Stock shall vote together as one class for the election of
directors of the Corporation and on all other matters submitted to a
vote of stockholders of the Corporation.
c. If, at the time of any annual meeting of stockholders
for the election of directors, the equivalent of six quarterly dividends
(whether or not consecutive) payable on any share or shares of this
Series are in default, the number of directors constituting the Board of
Directors of the Corporation shall be increased by one. In addition to
voting together with the holders of Common Stock for the election of
other directors of the Corporation, the holders of record of this
Series, voting separately as a class to the exclusion of the holders of
Common Stock, shall be entitled at said meeting of stockholders (and at
each subsequent annual meeting of stockholders), unless all dividends in
arrears have been paid or declared and set apart for payment prior
thereto, to vote for the election of one director of the Corporation,
the holders of any Series being entitled to cast a number of votes per
share of this Series equal to the Formula Number. Until the default in
payments of all dividends which permitted the election of said directors
shall cease to exist, any director who shall have been so elected
pursuant to the next preceding sentence may be removed at any time,
either with or without cause, only by the affirmative vote of the
holders of the shares of this Series at the time entitled to cast a
majority of the votes entitled to be cast for the election of any such
director at a special meeting of such holders called for that purpose,
and any vacancy thereby created may be filled by the vote of such
holders. If and when such default shall cease to exist, the holders of
this Series shall be divested of the foregoing special voting rights,
subject to revesting in the event of each and every subsequent like
default in payments of dividends. Upon the termination of the foregoing
special voting rights, the terms of office of all persons who may have
been elected directors pursuant to said special voting rights shall
forthwith terminate, and the number of directors constituting the Board
of Directors shall be reduced by one. The voting rights granted by this
Section 4(c) shall be in addition to any other voting rights granted to
the holders of this Series in this Section 4.
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40
d. Except as provided herein, in Section 11 or by
applicable law, holders of this Series 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 authorizing or taking any corporate action.
5. Restrictions on Certain Corporation Action.
a. Whenever quarterly dividends or other dividends or
distributions payable on this Series Bs provided in Section 2 are in
arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of this Series
outstanding shall have been paid in full, the Corporation shall not
i. declare or pay dividends on, make any other
distributions on, or redeem or purchase or otherwise acquire for
consideration any shares of stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
this Series;
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 this Series, except dividends paid ratably on this Series
and all such parity stock on which dividends are payable or in
arrears in proportion to the total amounts to which the holders
of all such shares are then entitled;
iii. redeem or purchase or otherwise acquire for
consideration shares of any stock ranking on a parity (either as
to dividends or upon liquidation, dissolution or winding up)
with this Series; 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 this Series; or
iv. purchase or otherwise acquire for consideration
any shares of this Series, or any shares of stock ranking on a
parity with this Series, 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 5, purchase or otherwise acquire such
shares at such time and in such manner.
6. 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 or any other property, then in
5
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any such case, the then outstanding shares of this Series shall at the same time
be similarly exchanged or changed into an amount per share equal to the Formula
Number then in effect times the aggregate amount of stock, securities, cash or
any other property (payable in kind), as the case may be, into which or for
which each share of Common Stock is exchanged or changed. In the event both this
Section 6 and Section 2 appear to apply to a transaction, this Section 6 will
control.
7. No Redemption; No Sinking Fund.
a. The shares of this Series shall not be subject to
redemption by the Corporation or at the option of any holder of this
Series; provided, however, that the Corporation may purchase or
otherwise acquire outstanding shares of this Series in the open market
or by offer to any holder or holders of shares of this Series.
b. The shares of this Series shall not be subject to or
entitled to the operation of a retirement or sinking fund.
8. Ranking. This Series shall rank junior to all other series of
Preferred Stock of the Corporation, unless the Board of Directors shall
specifically determine otherwise in fixing the powers, preferences and relative,
participating, optional and other special rights of the shares of such Series
and the qualifications, limitations and restrictions thereof.
9. Fractional Shares. This Series shall be issuable upon exercise
of the Rights issued pursuant to the Rights Agreement in whole shares or in any
fraction of a share that is one one thousandths (1/1,000ths) of a share or any
integral multiple of such fraction which shall entitle the holder, in proportion
to such holder's fractional shares, to receive dividends, exercise voting
rights, participate in distributions and to have the benefit of all other rights
of holders of this Series. In lieu of fractional shares, the Corporation, prior
to the first issuance of a share or a fraction of a share of this Series, may
elect (1) to make a cash payment as provided in the Rights Agreement for
fractions of a share other than one one-thousandths (1/1,000ths) of a share or
any integral multiple thereof or (2) to issue depository receipts evidencing
such authorized fraction of a share of this Series pursuant to an appropriate
agreement between the Corporation and a depository selected by the Corporation;
provided that such agreement shall provide that the holders of such depository
receipts shall have all the rights, privileges and preferences to which they are
entitled as holders of this Series.
10. Reacquired Shares. Any shares of this Series 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 Preference Stock,
without designation as to series until such shares are once more designated as
part of a particular series by the Board of Directors pursuant to the provisions
of the Certificate of Incorporation.
11. Amendment. None of the powers, preferences and relative,
participating, optional and other special rights of this Series as provided
herein shall be amended in any manner which would alter or change the powers,
preferences, rights or privileges of the holders of this Series so as to affect
them adversely without the affirmative vote of the holders of at least 66-2/3%
of the
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42
outstanding shares of this Series, voting as a separate class; provided,
however, that no such amendment approved by the holders of at least 66-2/3% of
the outstanding shares of this Series shall be deemed to apply to the powers,
preferences, rights or privileges of any holder of shares of this Series
originally issued upon exercise of a Right after the time of such approval
without the approval of such holder.
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43
IN WITNESS WHEREOF, this Certificate of Designation is executed on
behalf of the Corporation by its President this ___ day of November, 1998.
ILLUMINET HOLDINGS, INC.
By:
-------------------------------------
President
Attest:
------------------------------------
Name:
-------------------------------
Title: Secretary
STATE OF )
) ss.
COUNTY OF )
Before me, the undersigned Notary Public in and for said county and
state, this day personally appeared and , personally known to me
to be the President and Secretary, respectively, of ILLUMINET HOLDINGS, INC.,
and who executed the foregoing instrument as President and Secretary,
respectively, of ILLUMINET HOLDINGS, INC. and being first duly sworn,
acknowledged reading in full and fully understanding the foregoing, acknowledged
the facts therein stated to be true and correct, and who further acknowledged
the execution of the same as the voluntary act of the Corporation.
Witness my hand and seal this __________ day of ________________,
_______.
Notary Public
My Commission Expires:
----------------------------
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44
FIRST AMENDMENT TO RIGHTS AGREEMENT
THIS FIRST AMENDMENT TO RIGHTS AGREEMENT (this "Amendment") is made and
entered into this 2nd day of August, 1999 between Illuminet Holdings, Inc., a
Delaware corporation (the "Company"), and UMB Bank, N.A., as Rights Agent (the
"Rights Agent").
WHEREAS, the Company and the Rights Agent previously entered into a
Rights Agreement dated November 20, 1998 (the "Agreement"); and
WHEREAS, the Company and the Rights Agent now wish to change and
supplement the Agreement in accordance with Section 5.4 therein.
NOW, THEREFORE, in consideration of the premises and the respective
agreements set forth in this Agreement, the parties hereby agree as follows:
1. The definition of "Aquiring Person" in Section 1.1 is hereby amended
to read as follows:
"Acquiring Person" shall mean any Person who, without the Prior Written
Approval of the Company, is a Beneficial Owner of 20% or more of the
outstanding shares of Common Stock; provided, however, that the term
"Acquiring Person" shall not include any Person (i) who is the
Beneficial Owner of 20% or more of the outstanding shares of Common
Stock on the date of this Agreement or who shall become the Beneficial
Owner of 20% or more of the outstanding shares of Common Stock solely
as a result of an acquisition by the Company of shares of Common Stock,
until such time hereafter or thereafter as any of such Persons shall
become the Beneficial Owner (other than by means of a stock dividend or
stock split) of any additional shares of Common Stock, (ii) who is the
Beneficial Owner of 20% or more of the outstanding shares of Common
Stock but who acquired Beneficial Ownership of shares of Common Stock
without any plan or intention to seek or affect control of the Company,
if such Person promptly enters into an irrevocable commitment promptly
to divest, and thereafter promptly divests (without exercising or
retaining any power, including voting, with respect to such shares),
sufficient shares of Common Stock (or securities convertible into,
exchangeable into or exercisable for Common Stock) so that such Person
ceases to be the Beneficial Owner of 20% or more of the outstanding
shares of Common Stock or (iii) who Beneficially Owns shares of Common
Stock consisting solely of one or more of (A) shares of Common Stock
Beneficially Owned pursuant to the grant or exercise of an option
granted to such Person by the Company in connection with an agreement
to merge with, or acquire, the Company entered into prior to a Flip-in
Date, (B) shares of Common Stock (or securities convertible into,
exchangeable into or exercisable for Common Stock) Beneficially Owned
by such Person or its Affiliates or Associates at the time of grant of
such option, (C) shares of Common Stock (or securities convertible
into, exchangeable into or exercisable for Common Stock) acquired by
Affiliates or Associates of such Person after the time of such grant
45
which, in the aggregate, amount to less than 1% of the outstanding
shares of Common Stock or (D) shares of Common Stock (or securities
convertible into, exchangeable into or exercisable for Common Stock)
which are held by such Person in trust accounts, managed accounts and
the like or otherwise held in a fiduciary capacity, that are
beneficially owned by third persons who are not Affiliates or
Associates of such Person or acting together with such Person to hold
such shares, or which are held by such Person in respect of a debt
previously contracted. In addition, the Company, any wholly-owned
Subsidiary of the Company and any employee stock ownership or other
employee benefit plan of the Company or a wholly-owned Subsidiary of
the Company shall not be an Acquiring Person.
2. Section 1.1 of the Agreement is further amended by adding the
following definition thereto:
"Prior Written Approval" shall mean the prior express written consent
of the Company to any Person becoming an Acquiring Person, executed on
behalf of the Company by a duly authorized officer of the Company
following express approval by action of the Board of Directors.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
ILLUMINET HOLDINGS, INC.
By:_________________________________
Name:_______________________________
Title:______________________________
UMB BANK, N.A., as Rights Agent
By:_________________________________
Name:_______________________________
Title:______________________________
