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ONLINE RESOURCES CORPORATION
and
AMERICAN STOCK TRANSFER & TRUST COMPANY
as Rights Agent
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RIGHTS AGREEMENT
Dated as of January 11, 2002
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TABLE OF CONTENTS
SECTION PAGE
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Section 1. Certain Definitions...............................................1
Section 2. Appointment of Rights Agent.......................................5
Section 3. Issue of Rights Certificates......................................5
Section 4. Form of Rights Certificates.......................................7
Section 5. Countersignature and Registration.................................8
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates...............................................9
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.....9
Section 8. Cancellation and Destruction of Rights Certificates..............11
Section 9. Reservation and Availability of Capital Stock....................12
Section 10. Preferred Stock Record Date......................................13
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights.................................................13
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.......22
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power....................................................22
Section 14. Fractional Rights and Fractional Shares..........................24
Section 15. Rights of Action.................................................26
Section 16. Agreement of Rights Holders......................................26
Section 17. Rights Certificate Holder Not Deemed a Stockholder...............27
Section 18. Concerning the Rights Agent......................................27
Section 19. Merger or Consolidation or Change of Name of Rights Agent........27
Section 20. Duties of Rights Agent...........................................28
Section 21. Change of Rights Agent...........................................30
Section 22. Issuance of New Rights Certificates..............................31
Section 23. Redemption and Termination.......................................31
Section 24. Exchange.........................................................32
Section 25. Notice of Certain Events.........................................33
Section 26. Notices..........................................................34
Section 27. Supplements and Amendments.......................................35
Section 28. Successors.......................................................35
Section 29. Determinations and Actions by the Board of Directors, etc........35
Section 30. Benefits of this Agreement.......................................36
Section 31. Severability.....................................................36
Section 32. Governing Law....................................................36
Section 33. Counterparts.....................................................37
Section 34. Descriptive Headings.............................................37
Exhibit A -- Form of Certificate of Designation of Preferred Stock
Exhibit B -- Form of Rights Certificate
Exhibit C -- Form of Summary of Rights
RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of January 11, 2002 (the "Agreement"), between
ONLINE RESOURCES CORPORATION, a Delaware corporation (the "Company"), and
AMERICAN STOCK TRANSFER AND TRUST COMPANY, as Rights Agent (the "Rights Agent").
WITNESSETH
WHEREAS, the Board of Directors of the Company (the "Board") authorized and
declared a dividend distribution, effective as of January 11, 2002 (the "Rights
Dividend Declaration Date"), of one Right (a "Right") for each share of Common
Stock (as hereinafter defined) of the Company outstanding at the close of
business on January 11, 2002 (the "Record Date"), and has authorized the
issuance of one Right (as such number may hereinafter be adjusted pursuant to
the provisions of Section 11(a)(i) hereof) for each share of Common Stock of the
Company issued (whether originally issued or delivered from the Company's
treasury) between the Record Date and the Distribution Date, each Right
initially representing the right to purchase one one-hundredth of a share of
Series B Junior Participating Preferred Stock upon the terms and conditions
hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which, together
with all Affiliates and Associates of such Person, shall be the Beneficial Owner
of 15% or more of the shares of Common Stock then outstanding, but shall not
include the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company, or any Person or entity
organized, appointed or established by the Company for or pursuant to the terms
of any such plan. Notwithstanding the foregoing, no Person shall become an
"Acquiring Person" as the result of an acquisition of Common Stock by the
Company which, by reducing the number of shares outstanding, increases the
proportionate number of shares beneficially owned by such Person to 15% or more
of the Common Stock of the Company then outstanding; provided, however, that if
a Person shall become the Beneficial Owner of 15% or more of the Common Stock of
the Company then outstanding by reason of share purchases by the Company and
shall, after such share purchases by the Company, become the Beneficial Owner of
any additional Common Stock of the Company, then such Person shall be deemed to
be an "Acquiring Person." Notwithstanding the foregoing, if the Board determines
in good faith that a Person who would otherwise be an "Acquiring Person," as
defined pursuant to the foregoing provisions of this paragraph (a), has become
such inadvertently, and such Person divests as promptly as practicable a
sufficient number of shares of Common Stock so that such Person would no longer
be an "Acquiring Person," as defined pursuant to the foregoing provisions of
this paragraph (a), then such Person shall not be deemed to be an "Acquiring
Person" for any purposes of this Agreement.
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii)(C) hereof.
(d) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended and in effect on the date of
this Agreement (the "Exchange Act").
(e) "Agreement" shall mean this Rights Agreement as originally
executed or as it may from time to time be supplemented or amended pursuant to
the applicable provisions hereof.
(f) A Person shall be deemed the "Beneficial Owner" and shall be
deemed to "beneficially own", any securities:
(i) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to acquire (whether such right
is exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding, whether or not in writing, or upon the
exercise of conversion rights, exchange rights, other rights, warrants or
options, or otherwise; provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own", (A) securities tendered
pursuant to a tender offer or exchange offer made by such Person or any of such
Person's Affiliates or Associates until such tendered securities are accepted
for purchase or exchange, or (B) securities issuable upon exercise of Rights at
any time prior to the occurrence of a Triggering Event, or (C) securities
issuable upon exercise of Rights from and after the occurrence of a Triggering
Event which Rights were acquired by such Person or any of such Person's
Affiliates or Associates prior to the Distribution Date or pursuant to Section
3(a) or Section 22 hereof (the "Original Rights") or pursuant to Section
11(a)(i) hereof in connection with an adjustment made with respect to any
Original Rights;
(ii) which such Person or any of such Person's Affiliates or
Associates, directly or indirectly, has the right to vote or dispose of or has
"beneficial ownership" of (as determined pursuant to Rule 13d-3 of the General
Rules and Regulations under the Exchange Act, or any comparable or successor
rule), including pursuant to any agreement, arrangement or understanding,
whether or not in writing; provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own", any security under this
subparagraph (ii) as a result of an agreement, arrangement or understanding to
vote such security if such agreement, arrangement or understanding: (A) arises
solely from a revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the applicable provisions
of the General Rules and Regulations under the Exchange Act, and (B) is not also
then reportable by such Person on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
(iii) which are beneficially owned, directly or indirectly, by
any other Person (or any Affiliate or Associate thereof) with which such Person
(or any of such Person's Affiliates or Associates) has any agreement,
arrangement or understanding, whether or not in
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writing, for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy as described in the proviso to subparagraph (ii) of this
paragraph (h)) or disposing of any voting securities of the Company (a joint
filing of a Schedule 13D under the Exchange Act or any comparable or successor
report being deemed to be conclusive evidence of such an agreement, arrangement
or understanding); provided, however, that nothing in this paragraph (h) shall
cause a Person engaged in business as an underwriter of securities to be the
"Beneficial Owner" of, or to "beneficially own", any securities acquired through
such Person's participation in good faith in a firm commitment underwriting
until the expiration of forty (40) days after the date of such acquisition.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to own beneficially hereunder.
(g) "Board" means the Board of Directors of the Company.
(h) "Business Day" shall mean any day other than a Saturday, Sunday
or a day on which banking institutions in New York, New York, are authorized or
obligated by law or executive order to close.
(i) "Close of Business" on any given date shall mean 5:00 P.M., New
York local time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York, New York local time, on the next
succeeding Business Day.
(j) "Common Stock" shall mean the common stock, 1/100th of one cent
par value per share, of the Company, except that "Common Stock" when used with
reference to any Person other than the Company shall mean the capital stock of
such Person with the greatest voting power, or the equity securities or other
equity interest having power to control or direct the management, of such
Person.
(k) "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(l) "Company" shall mean the Person named as the "Company" in the
first paragraph of this Agreement until a successor corporation shall have
become such or until a Principal Party shall assume, and thereafter be liable
for, all obligations and duties of the Company hereunder, pursuant to the
applicable provisions of this Agreement, and thereafter "Company" shall mean
such successor corporation or Principal Party.
(m) "Current Market Price" shall have the meaning set forth in
Section 11(d)(i) hereof.
(n) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
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(o) "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
(p) "Equivalent Preferred Stock" shall have the meaning set forth in
Section 11(b) hereof.
(q) "Exchange Act" shall have the meaning set forth in Section 1(d)
hereof.
(r) "Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(s) "Final Expiration Date" shall mean the close of business on
January 11, 2012.
(t) "Initial Exercise Price" shall be $115.00.
(u) "Nasdaq" shall mean the National Association of Securities
Dealers, Inc. Automated Quotation System.
(v) "Original Rights" shall have the meaning set forth in Section
1(f)(i) hereof.
(w) "Person" shall mean any natural person, firm, association,
corporation, limited liability company, partnership, trust or other entity or
organization.
(x) "Preferred Stock" shall mean the Series B Junior Participating
Preferred Stock, $0.01 par value per share, of the Company having the terms set
forth in the form of certificate of designation attached hereto as Exhibit A.
(y) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
(z) "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
(aa) "Record Date" shall have the meaning set forth in the preamble of
the Agreement.
(bb) "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
(cc) "Rights" shall have the meaning set forth in the preamble of the
Agreement.
(dd) "Rights Agent" shall mean the Person named as the "Rights Agent"
in the first paragraph of this Agreement until a successor Rights Agent shall
have become such pursuant to the applicable provisions hereof, and thereafter
"Rights Agent" shall mean such successor Rights Agent. If at any time there is
more than one Person appointed by the Company as Rights Agent pursuant to the
applicable provisions of this Agreement, "Rights Agent" shall mean and include
each such Person.
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(ee) "Rights Certificates" shall have the meaning set forth in Section
3(a) hereof.
(ff) "Rights Dividend Declaration Date" shall have the meaning set
forth in the preamble of this Agreement.
(gg) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii)(A), (B) or (C) hereof.
(hh) "Section 11(a)(ii) Trigger Date" shall have the meaning set forth
in Section 11(a)(iii) hereof.
(ii) "Section 13 Event" shall mean any event described in clauses (x),
(y) or (z) of Section 13(a) hereof.
(jj) "Spread" shall have the meaning set forth in Section 11(a)(iii)
hereof.
(kk) "Stock Acquisition Date" shall mean the first date of a public
announcement or disclosure (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d) under the
Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has
become such.
(ll) "Subsidiary" shall mean, with reference to any Person, including
the Company, any corporation of which an amount of voting securities sufficient
to elect at least a majority of the directors of such corporation is
Beneficially Owned, directly or indirectly, by such Person, or which is
otherwise controlled by such Person.
(mm) "Substitute Consideration" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(nn) "Substitution Period" shall have the meaning set forth in Section
11(a)(iii) hereof.
(oo) "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
(pp) "Triggering Event" shall mean any Section 11(a)(ii) Event or any
Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company in accordance with the terms and
conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable. Notwithstanding the foregoing, the Rights Agent shall
have no duty to supervise, and in no event shall be liable for, the acts or
omissions of any such Co-Rights Agent.
Section 3. Issue of Rights Certificates.
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(a) Until the earlier of (i) the Close of Business on the tenth day
after the Stock Acquisition Date (or, if the tenth day after the Stock
Acquisition Date occurs before the Record Date, the Close of Business on the
Record Date) or (ii) the Close of Business on the tenth Business Day (or, if
such tenth Business Day occurs before the Record Date, the Close of Business on
the Record Date), or such specified or unspecified later date on or after the
Record Date as may be determined by action of the Board, after the date that a
tender offer or exchange offer, or an intention to make a tender offer or
exchange offer, by any Person (other than the Company, any Subsidiary of the
Company, any employee benefit plan of the Company or of any Subsidiary of the
Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan) is first published or
sent or given within the meaning of Rule 14d-2(a) of the General Rules and
Regulations under the Exchange Act, if upon consummation thereof for the maximum
number of shares that may be purchased thereunder, such Person would be the
Beneficial Owner of 15% or more of the shares of Common Stock then outstanding
(the earlier of (i) or (ii) being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the provisions of paragraph
(b) of this Section 3) by the certificates for the Common Stock registered in
the names of the holders of the Common Stock (which certificates for Common
Stock shall be deemed also to be certificates for Rights) and not by separate
certificates, and (y) the Rights will be transferable only in connection with
the transfer of the underlying shares of Common Stock (including a transfer to
the Company). As soon as practicable after the Distribution Date and upon
receipt of all necessary information, the Rights Agent will send by first-class,
insured, postage prepaid mail, to each record holder of the Common Stock as of
the Close of Business on the Distribution Date, at the address of such holder
shown on the records of the Company, one or more rights certificates, in the
form specified in Section 4 hereof (the "Rights Certificates"), evidencing one
Right for each share of Common Stock so held, subject to adjustment as provided
herein. In the event that an adjustment in the number of Rights per share of
Common Stock has been made pursuant to Section 11(a)(i) hereof, at the time of
distribution of the Rights Certificates, the Company shall make the necessary
and appropriate rounding adjustments (in accordance with Section 14(a) hereof)
so that Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional rights. As of and after
the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates.
(b) As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights, in substantially the form attached
hereto as Exhibit C, by first-class, postage prepaid mail, to each record holder
of the Common Stock as of the Close of Business on the Record Date, at the
address of such holder shown on the records of the Company. With respect to
certificates for the Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates for the
Common Stock and the registered holders of the Common Stock shall also be the
registered holders of the associated Rights. Until the earlier of the
Distribution Date or the Expiration Date (as such term is defined in Section 7
hereof), the transfer of any certificates representing shares of Common Stock in
respect of which Rights have been issued shall also constitute the transfer of
the Rights associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common Stock
that are issued (whether originally issued or from the Company's treasury) after
the Record Date but prior to the earlier of the Distribution Date or the
Expiration Date. Rights shall also be issued to
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the extent provided in Section 22 in respect of all shares of Common Stock which
are issued (whether originally issued or from the Company's treasury) after the
Distribution Date and prior to the Expiration Date. Certificates representing
such shares of Common Stock in respect of which Rights are issued pursuant to
the first sentence of this Section 3(c) shall also be deemed to be certificates
for Rights, and commencing as soon as reasonably practicable following the date
hereof shall bear the following legend:
This certificate also evidences and entitles the holder hereof to
certain Rights as set forth in the Rights Agreement between Online
Resources Corporation (the "Company") and American Stock Transfer and
Trust Company (the "Rights Agent") dated as of January 11, 2002 (the
"Rights Agreement"), the terms of which are hereby incorporated herein
by reference and a copy of which is on file at the principal offices
of the Company. Under certain circumstances, as set forth in the
Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. The
Company will mail to the holder of this certificate a copy of the
Rights Agreement, as in effect on the date of mailing, without charge
promptly after receipt of a written request therefor. Under certain
circumstances set forth in the Rights Agreement, Rights issued to, or
held by, any Person who is, was or becomes an Acquiring Person or any
Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may become null and
void. The Rights shall not be exercisable, and shall be void so long
as held, by a holder in any jurisdiction where the requisite
qualification to the issuance to such holder, or the exercise by such
holder, of the Rights in such jurisdiction shall not have been
obtained or obtainable.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase
and of assignment to be printed on the reverse thereof) shall each be
substantially in the form set forth in Exhibit B hereto and may have such marks
of identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate (but which do not affect the
rights, duties or responsibilities of the Rights Agent) and as are not
inconsistent with the provisions of this Agreement, or as may be required to
comply with any applicable law or with any rule or regulation made pursuant
thereto or with any rule or regulation of any stock exchange or trading market
on which the Rights may from time to time be listed, or to conform to usage.
Subject to the provisions of Section 11 and Section 22 hereof, the Rights
Certificates, whenever distributed, shall be dated as of the Record Date and on
their face shall entitle the holders thereof to purchase such number of one
one-hundredths of a share of Preferred Stock as
7
shall be set forth therein at the price per share set forth therein (such
exercise price per one one-hundredth of a share hereinafter referred to as the
"Purchase Price"), but the amount and type of securities purchasable upon the
exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or Section
22 hereof that represents Rights beneficially owned by: (i) an Acquiring Person
or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate of an Acquiring Person)
who becomes a transferee after the Acquiring Person becomes such or (iii) a
transferee of an Acquiring Person (or of any such Associate or Affiliate of an
Acquiring Person) who becomes a transferee prior to or concurrently with the
Acquiring Person becoming such and receives such Rights pursuant to either (A) a
transfer (whether or not for consideration) from the Acquiring Person to holders
of equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board has
determined is part of an agreement, arrangement or understanding that has as a
primary purpose or effect avoidance of Section 7(e) hereof, and provided that
the Company shall have notified the Rights Agent that this Section 4(b) applies,
and any Rights Certificate issued pursuant to Section 6 or Section 11 hereof
upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain (to the extent feasible)
the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an Acquiring Person
or an Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights Certificate
and the Rights represented hereby may become null and void in the
circumstances specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman, the President and Chief Executive Officer, Chief
Financial Officer or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant Secretary of
the Company, either manually or by facsimile signature. The Rights Certificates
shall be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless so countersigned. In case any officer of the Company who
shall have signed any of the Rights Certificates shall cease to be such officer
of the Company before countersignature by the Rights Agent and issuance and
delivery by the Company, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the Company with
the same force and effect as though the person who signed such Rights
Certificates had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at the
actual date of the execution of such Rights Certificate, shall be a proper
officer of the Company to sign such Rights Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
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(b) Following the Distribution Date and receipt by the Rights Agent
of all necessary information, the Rights Agent will keep or cause to be kept, at
its office designated as the appropriate place for surrender of Rights
Certificates upon exercise or transfer, books for registration and transfer of
the Rights Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the Rights Certificates, the number of
Rights evidenced on its face by each of the Rights Certificates, the Rights
Certificate number and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the Close of Business on the Distribution
Date, and at or prior to the Close of Business on the Expiration Date, any
Rights Certificate or Certificates may be transferred, split up, combined or
exchanged for another Rights Certificate or Certificates, entitling the
registered holder to purchase a like number of one one-hundredths of a share of
Preferred Stock (or, following a Triggering Event, Common Stock, other
securities, cash or other assets, as the case may be) as the Rights Certificate
or Certificates surrendered then entitled such holder (or former holder in the
case of a transfer) to purchase. Any registered holder desiring to transfer,
split up, combine or exchange any Rights Certificate or Certificates shall make
such request in writing delivered to the Rights Agent, and shall surrender the
Rights Certificate or Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose. Neither
the Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Rights
Certificate or Certificates until the registered holder shall have properly
completed and signed the certificate contained in the form of assignment set
forth on the reverse side of each such Rights Certificate and shall have
provided such additional evidence of the identity of the Beneficial Owner (or
former Beneficial Owner) or Affiliates or Associates thereof as the Company or
the Rights Agent shall reasonably request. Thereupon the Rights Agent shall,
subject to Section 4(b), Section 7(e) and Section 14 hereof, countersign and
deliver to the Person entitled thereto a Rights Certificate or Certificates, as
the case may be, as so requested. The Company may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Rights
Certificates. The Rights Agent shall have no duty or obligation to take any
action under any Section of this Agreement which requires the payment by a
Rights holder of applicable taxes and governmental charges unless and until the
Rights Agent is satisfied that all such taxes and/or charges have been paid.
(b) Upon receipt by the Company and the Rights Agent of evidence
satisfactory to them of the loss, theft, destruction or mutilation of a Rights
Certificate, and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them, and, at the Company's or the Right Agent's
request, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will execute
and deliver a new Rights Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered owner in lieu of the Rights
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
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(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions set
forth in Section 9(c), Section 11(a)(iii) and Section 23(a) hereof) in whole or
in part at any time after the Distribution Date upon surrender of the Rights
Certificate, with the form of election to purchase set forth on the reverse side
thereof and the certificate contained therein completed and duly executed, to
the Rights Agent at the office of the Rights Agent designated for such purpose,
together with payment of the aggregate Purchase Price with respect to the total
number of one one-hundredths of a share of Preferred Stock (or other securities,
cash or other assets, as the case may be) as to which such surrendered Rights
are then exercisable, at or prior to the earlier of (i) the Final Expiration
Date, (ii) the time at which the Rights are redeemed as provided in Section 23
hereof (the "Redemption Date", (iii) the time at which the Rights expire
pursuant to Section 13(d) hereof or (iv) the time at which such Rights are
exchanged as provided in Section 24 hereof (the earliest of (i), (ii), (iii) or
(iv) being herein referred to as the "Expiration Date").
(b) The Purchase Price for each one one-hundredth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be the
Initial Exercise Price, and shall be subject to adjustment from time to time as
provided in Sections 11 and 13(a) hereof and shall be payable in accordance with
paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase set forth on the reverse side
thereof and the certificate contained therein completed and duly executed,
accompanied by payment, with respect to each Right so exercised, of the Purchase
Price per one one-hundredth of a share of Preferred Stock (or other securities,
cash or other assets, as the case may be) to be purchased as set forth below and
an amount equal to any applicable tax or charge, the Rights Agent shall, subject
to Section 20(k) hereof, promptly (i) requisition from any transfer agent of the
shares of Preferred Stock (or make available, if the Rights Agent is the
transfer agent for such shares) certificates for the total number of one
one-hundredths of a share of Preferred Stock to be purchased and the Company
hereby irrevocably authorizes its transfer agent to comply with all such
requests, (ii) requisition from the Company the amount of cash, if any, to be
paid in lieu of fractional shares in accordance with Section 14 hereof, (iii)
after receipt of such certificates, cause the same to be delivered to or upon
the order of the registered holder of such Rights Certificate, registered in
such name or names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the registered
holder of such Rights Certificate. The payment of the Purchase Price (as such
amount may be reduced pursuant to Section 11(a)(iii) hereof) shall be made in
cash or by certified check, cashier's check or bank draft payable to the order
of the Company. In the event that the Company is obligated to issue other
securities (including Common Stock) of the Company, pay cash or distribute other
property pursuant to Section 11(a) hereof, the Company will make all
arrangements necessary so that such other securities, cash or other property are
available for distribution by the Rights Agent, if and when necessary to comply
with this Agreement. The Company reserves the right to require prior to the
occurrence of a Triggering Event that, upon any exercise of Rights, such number
of Rights be exercised so that only whole shares of Preferred Stock would be
issued.
(d) In case the registered holder of any Rights Certificate shall
exercise less than all the Rights evidenced thereby, a new Rights Certificate
evidencing the Rights equivalent
10
to the Rights remaining unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder of such Rights
Certificate, registered in such name or names as may be designated by such
holder, subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of an event described in Section 11(a)(ii)(A) or
(C) and from and after the Close of Business on the tenth day after the
occurrence of an event described in Section 11(a)(ii)(B), any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, which the Board, in its sole discretion, determines is or was
involved in or caused or facilitated, directly or indirectly (including through
any change in the Board), such Section 11(a)(ii) Event, (ii) a transferee of any
such Acquiring Person (or of any such Associate or Affiliate of an Acquiring
Person) who becomes a transferee after such Acquiring Person becomes such or
(iii) a transferee of any such Acquiring Person (or of any such Associate or
Affiliate of an Acquiring Person) who becomes a transferee prior to or
concurrently with such Acquiring Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from such
Acquiring Person to holders of equity interests in such Acquiring Person or to
any Person with whom such Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
which the Board has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this Section 7(e),
shall become null and void without any further action and no holder of such
Rights shall have any rights whatsoever with respect to such Rights, whether
under any provision of this Agreement or otherwise. The Company shall notify the
Rights Agent when this Section 7(e) and/or Section 4(b) hereof applies and shall
use all reasonable efforts to ensure that the provisions of this Section 7(e)
and Section 4(b) hereof are complied with, but neither the Company nor the
Rights Agent shall have any liability to any holder of Rights Certificates or
other Person as a result of the Company's failure to make any determinations
with respect to an Acquiring Person or any of its Affiliates, Associates or
transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7 unless such registered holder shall have
(i) duly and properly completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise, and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company or the Rights Agent shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All Rights
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the
11
written request of the Company, destroy such cancelled Rights Certificates, and
in such case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
Preferred Stock (and, following the occurrence of a Triggering Event, out of its
authorized and unissued shares of Common Stock or other securities or out of its
authorized and issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock or other securities) that, as provided in this Agreement including Section
11(a)(iii) hereof, will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock or other securities) issuable and
deliverable upon the exercise of the Rights may be listed on any national
securities exchange, the Company shall use its best efforts to cause all shares
reserved for such issuance to be listed on such exchange upon official notice of
issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a
Triggering Event in which the consideration to be delivered by the Company upon
exercise of the Rights has been determined in accordance with this Agreement, a
registration statement under the Act, with respect to the Common Stock or other
securities purchasable upon exercise of the Rights on an appropriate form, (ii)
cause such registration statement to become effective as soon as practicable
after such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities, and (B) the Expiration Date. The Company will
also take such action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in connection with the
exercisability of the Rights. The Company may temporarily suspend, for a period
of time not to exceed ninety (90) days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the exercisability of the Rights in
order to prepare and file such registration statement and permit it to become
effective. In addition, if the Company shall determine that a registration
statement is required following the Distribution Date, the Company may
temporarily suspend the exercisability of the Rights until such time as a
registration statement has been declared effective. Upon any suspension of the
exercisability of the Rights referred to in this Section 9(c), the Company shall
issue a public announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. The Company shall promptly provide the Rights
Agent with copies of such announcements. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable and shall be void
so long as held by a holder in any jurisdiction where the requisite
qualification to the issuance to such holder, or the exercise by such holder, of
the Rights in such jurisdiction shall not have been obtained or be obtainable,
the exercise thereof shall not be permitted under applicable law or a
registration statement shall not have been declared effective.
12
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all one one-hundredths of a share of
Preferred Stock (and, following the occurrence of a Triggering Event, Common
Stock or other securities) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to payment of the
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all taxes and governmental charges that may be payable
in respect of the issuance or delivery of the Rights Certificates and of any
certificates for a number of one one-hundredths of a share of Preferred Stock
(or Common Stock or other securities, as the case may be) upon the exercise of
Rights. The Company shall not, however, be required to pay any tax or charge
that may be payable in respect of any transfer or delivery of Rights
Certificates to a Person other than, or the issuance or delivery of a number of
one one-hundredths of a share of Preferred Stock (or Common Stock or other
securities, as the case may be) in respect of a name other than that of, the
registered holder of the Rights Certificates evidencing Rights surrendered for
exercise or to issue or deliver any certificates for a number of one
one-hundredths of a share of Preferred Stock (or Common Stock or other
securities, as the case may be) in a name other than that of the registered
holder upon the exercise of any Rights until such tax or charge shall have been
paid (any such tax or charge being payable by the holder of such Rights
Certificates at the time of surrender) or until it has been established to the
Company's satisfaction that no such tax or charge is due.
Section 10. Preferred Stock Record Date. Each Person in whose name any
certificate for a number of one one-hundredths of a share of Preferred Stock (or
Common Stock or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such Preferred Stock (or Common Stock or other securities, as the case
may be) represented thereby on, and such certificate shall be dated, the date
upon which the Rights Certificate evidencing such Rights was duly surrendered
and payment of the Purchase Price (and all applicable taxes or charges) was
made; provided, however, that if the date of such surrender and payment is a
date upon which the Preferred Stock (or Common Stock or other securities, as the
case may be) transfer books of the Company are closed, such Person shall be
deemed to have become the record holder of such shares on, and such certificate
shall be dated, the next succeeding Business Day on which the Preferred Stock
(or Common Stock or other securities, as the case may be) transfer books of the
Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Rights Certificate shall not be entitled to any rights of a
stockholder of the Company with respect to shares for which the Rights shall be
exercisable, including, without limitation, the right to vote, to receive
dividends or other distributions or to exercise any preemptive rights, and shall
not be entitled to receive any notice of any proceedings of the Company, except
as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in shares
of Preferred Stock,
13
(B) subdivide the outstanding Preferred Stock, (C) combine the outstanding
Preferred Stock into a smaller number of shares, or (D) issue any shares of its
capital stock in a reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation), except as otherwise
provided in this Section 11(a) and Section 7(e) hereof, the Purchase Price in
effect at the time of the record date for such dividend or of the effective date
of such subdivision, combination or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as the case may be, issuable on such
date, shall be proportionately adjusted so that if a holder of Rights after such
time were to exercise that number of Rights (or fraction thereof) which would
result in the aggregate amount of the Purchase Price payable upon such exercise
(at the Purchase Price then in effect) being equal to the amount of the Purchase
Price payable prior to such time upon exercise of a Right, he would be entitled
to receive the aggregate number and kind of shares of Preferred Stock or other
capital stock, as the case may be, which, if a Right had been exercised
immediately prior to such time and at a time when the Preferred Stock transfer
books (or other capital stock transfer books, as the case may be) of the Company
were open, he would have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision, combination or reclassification. If an
event occurs that would require an adjustment under both this Section 11(a)(i)
and Section 11(a)(ii) hereof, the adjustment provided for in this Section
11(a)(i) shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii) hereof.
(ii) In the event:
(A) any Acquiring Person or any Associate or Affiliate of
any Acquiring Person, at any time after the date of this Agreement, directly or
indirectly, (1) shall merge into the Company or otherwise combine with the
Company and the Company shall be the continuing or surviving corporation of such
merger or combination and the Common Stock of the Company shall remain
outstanding and unchanged, (2) shall merge or otherwise combine with any
Subsidiary of the Company, (3) shall, in one transaction or a series of
transactions, transfer any assets to the Company or to any of its Subsidiaries
in exchange (in whole or in part) for shares of Common Stock, for shares of
other equity securities of the Company or any Subsidiary of the Company, or for
securities exercisable for or convertible into shares of equity securities of
the Company or any Subsidiary of the Company (Common Stock or otherwise) or
otherwise obtain from the Company, with or without consideration, any additional
shares of equity securities of the Company or securities exercisable for or
convertible into shares of such equity securities of the Company (other than
pursuant to a pro rata distribution to all holders of Common Stock or upon the
exercise of a convertible security of the Company or any Subsidiary of the
Company in accordance with its terms), (4) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or dispose of, in one
transaction or a series of transactions, to, from or with (as the case may be)
the Company or any of its Subsidiaries, assets on terms and conditions less
favorable to the Company than the Company would be able to obtain in arm's
length negotiations with an unaffiliated third party, other than pursuant to a
transaction set forth in Section 13(a) hereof, (5) shall sell, purchase, lease,
exchange, mortgage, pledge, transfer or otherwise acquire or dispose of in one
transaction or a series of transactions, to, from or with (as the case may be)
the Company or any of its Subsidiaries assets having an aggregate fair market
value of more than $1,000,000, other than pursuant to a transaction set forth in
Section 13(a) hereof and other than pursuant to a transaction or series of
transactions that
14
have been approved by the Board, (6) shall receive any compensation from the
Company or any of the Company's Subsidiaries other than compensation for
full-time employment as a regular employee at rates in accordance with the
Company's (or its Subsidiaries') past practices, or (7) shall receive the
benefit, directly or indirectly (except proportionately as a stockholder and
except if resulting from a requirement of law or governmental regulation), of
any loans, advances, guarantees, pledges or other financial assistance or any
tax credits or other tax advantages provided by the Company or any of its
Subsidiaries, or
(B) any Person (other than the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed or established by the
Company for or pursuant to the terms of any such plan), alone or together with
any Affiliates and Associates of such Person, shall, at any time after the
Rights Dividend Declaration Date, become the Beneficial Owner of 15% or more of
the shares of Common Stock then outstanding, unless the event causing the 15%
threshold to be met or surpassed is a transaction set forth in Section 13(a)
hereof, or is an acquisition of shares of Common Stock pursuant to a tender
offer or an exchange offer for all outstanding shares of Common Stock at a price
and on terms determined by the Board, after receiving advice from one or more
investment banking firms, to be (a) at a price that is fair to stockholders
(taking into account all factors which such members of the Board deem relevant
including, without limitation, prices which could reasonably be achieved if the
Company or its assets were sold on an orderly basis designed to realize maximum
value) and (b) otherwise in the best interest of the Company and its
stockholders, or
(C) during such time as there is an Acquiring Person, there
shall be any reclassification of securities (including any reverse stock split),
or recapitalization of the Company, or any merger or consolidation of the
Company with any of its Subsidiaries or any other transaction or series of
transactions involving the Company or any of its Subsidiaries (whether or not
with or into or otherwise involving an Acquiring Person), other than a
transaction or transactions to which the provisions of Section 13(a) hereof
apply (whether or not with or into or otherwise involving an Acquiring Person),
which has the effect, directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class of equity securities
of the Company or any of its Subsidiaries which is directly or indirectly
beneficially owned by any Acquiring Person or any Associate or Affiliate of any
Acquiring Person, then, immediately upon the occurrence of any event described
in Section 11(a)(ii)(A) or (C) hereof, and upon the Close of Business ten (10)
days after the occurrence of any event described in Section 11(a)(ii)(B) hereof,
proper provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of a number of one one-hundredths of a
share of Preferred Stock, such number of shares of Common Stock of the Company
as shall equal the result obtained by (x) multiplying the then current Purchase
Price by the then number of one one-hundredths of a share of Preferred Stock for
which a Right was or would have been exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event, whether or not such Right was then
exercisable, and (y) dividing that product (which, following such first
occurrence, shall thereafter be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by 50% of the Current Market Price
per share of Common Stock (determined
15
pursuant to Section 11(d) hereof) on the date of such first occurrence (such
number of shares being referred to herein as the "Adjustment Shares").
(iii) In the event that the number of shares of Common Stock
which are authorized by the Company's Certificate of Incorporation, as amended,
but not outstanding or reserved for issuance for purposes other than upon
exercise of the Rights are not sufficient to permit the exercise in full of the
Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a),
the Company shall (A) determine the value of the Adjustment Shares issuable upon
the exercise of a Right (the "Current Value"), and (B) with respect to each
Right (subject to Section 7(e) hereof), make adequate provision to substitute,
upon the exercise of a Right and payment of the applicable Purchase Price, (1)
cash, (2), a reduction in the Purchase Price, (3) Common Stock or other equity
securities of the Company (including, without limitation, shares, or units of
shares, of preferred stock which the Board has deemed to have the same value as
shares of Common Stock (such shares of preferred stock being referred to herein
as "Common Stock Equivalents")), (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing, having an aggregate value equal
to the Current Value, as adjusted (less the amount of any reduction in the
Purchase Price), where such aggregate value has been determined by the Board
based upon the advice of a nationally recognized investment banking firm
selected by the Board; provided, however, if the Company shall not have made
adequate provision to deliver value pursuant to clause (B) above within thirty
(30) days following the later of (x) the first occurrence of a Section 11(a)(ii)
Event and (y) the first date on which the Company's right of redemption pursuant
to Section 23(a) expires (the later of (x) and (y) being referred to herein as
the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock (to the extent available)
and then, if necessary, cash, which shares or cash have an aggregate value equal
to the Spread. For purposes of the preceding sentence, the term "Spread" shall
mean the excess of (i) the Current Value over (ii) the Purchase Price. If the
number of shares of Common Stock that are authorized by the Company's Restated
Certificate of Incorporation, as amended, but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights are not sufficient
to permit the exercise in full of any Rights and the Board determines in good
faith that it is likely that sufficient additional shares of Common Stock could
be authorized for issuance upon exercise in full of the Rights, the thirty (30)
day period set forth above may be extended to the extent necessary, but not more
than ninety (90) days after the Section 11(a)(ii) Trigger Date, in order that
the Company may seek stockholder approval for the authorization of such
additional shares (such thirty (30) day period, as it may be extended, shall be
referred to as the "Substitution Period"). To the extent that the Company
determines that some action need be taken pursuant to the preceding provisions
of this Section 11(a)(iii), the Company (x) shall provide, subject to Section
7(e) hereof, that such action shall apply uniformly to all outstanding Rights,
and (y) may suspend the exercisability of the Rights until the expiration of the
Substitution Period in order to seek any authorization of additional shares or
to decide the appropriate form of distribution to be made pursuant to such
provisions and to determine the value thereof. In the event of any such
suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect and the
Company shall promptly provide the Rights Agent copies of such announcements.
For purposes of this Section 11(a)(iii), the value of each Adjustment Share
shall be the Current Market Price per share of the Common Stock (as determined
pursuant to Section 11(d) hereof) on the Section
16
11(a)(ii) Trigger Date and the per share or per unit value of any Common Stock
Equivalent shall be deemed to equal the Current Market Price per share of the
Common Stock on such date.
(b) In case the Company shall fix a record date for the issuance of
rights (other than the Rights), options or warrants to all holders of Preferred
Stock entitling them to subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record date) Preferred Stock, shares
having the same rights, privileges and preferences as the shares of Preferred
Stock ("Equivalent Preferred Stock") or securities convertible into Preferred
Stock or Equivalent Preferred Stock at a price per share of Preferred Stock or
per share of Equivalent Preferred Stock (or having a conversion price per share,
if a security convertible into Preferred Stock or Equivalent Preferred Stock)
less than the Current Market Price per share of Preferred Stock (as determined
pursuant to Section 11(d) hereof) on such record date, the Purchase Price to be
in effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred Stock outstanding
on such record date, plus the number of shares of Preferred Stock which the
aggregate offering price of the total number of shares of Preferred Stock or
Equivalent Preferred Stock (or the aggregate initial conversion price of the
convertible securities so to be offered) would purchase at such Current Market
Price, and the denominator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of additional shares of
Preferred Stock or Equivalent Preferred Stock to be offered for subscription or
purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid by delivery
of consideration part or all of which may be in a form other than cash, the
value of such noncash consideration shall be as determined in good faith by the
Board, whose determination shall be described in a statement filed with the
Rights Agent and shall be binding on the Rights Agent and the holders of the
Rights. Shares of Preferred Stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such computation.
Such adjustment shall be made successively whenever such a record date is fixed,
and in the event that such rights, options or warrants are not so issued, the
Purchase Price shall be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution to
all holders of Preferred Stock (including any such distribution made in
connection with a consolidation or merger in which the Company is the continuing
or surviving corporation) of evidences of indebtedness, cash (other than a
regular quarterly or other periodic cash dividend out of the earnings or
retained earnings of the Company), assets (other than a dividend payable in
Preferred Stock, but including any dividend payable in stock other than
Preferred Stock) or subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
Current Market Price per share of Preferred Stock (as determined pursuant to
Section 11(d) hereof) on such record date, less the fair market value (as
determined in good faith by the Board whose determination shall be described in
a statement filed with the Rights Agent and shall be binding on the Rights Agent
and the holders of the Rights) of the portion of the cash, assets or evidences
of indebtedness so to be distributed or of such subscription rights or warrants
applicable to a share of Preferred Stock and the denominator of which shall be
such Current Market Price per share of Preferred Stock (as determined pursuant
to Section 11(d) hereof). Such adjustments
17
shall be made successively whenever such a record date is fixed, and in the
event that such distribution is not so made, the Purchase Price shall be
adjusted to be the Purchase Price which would have been in effect if such record
date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the Current Market
Price per share of Common Stock on any date shall be deemed to be the average of
the daily closing prices per share of such Common Stock for the thirty (30)
consecutive Trading Days immediately prior to but not including such date, and
for the purposes of computations made pursuant to Section 11(a)(iii) hereof, the
Current Market Price per share of Common Stock on any date shall be deemed to be
the average of the daily closing prices per share of such Common Stock for the
ten (10) consecutive Trading Days immediately following but not including such
date; provided, however, that in the event that the Current Market Price per
share of the Common Stock is determined during a period following the
announcement by the issuer of such Common Stock of (A) any dividend or
distribution on such Common Stock payable in shares of such Common Stock or
securities convertible into shares of such Common Stock (other than Rights), or
(B) any subdivision, combination or reclassification of such Common Stock, and
prior to the expiration of the requisite thirty (30) Trading Day or ten (10)
Trading Day period, as set forth above, after the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification, then, and in each such case, the Current Market Price shall
be properly adjusted to take into account ex-dividend trading. The closing price
for each day shall be the last sale price, regular way, or, in case no such sale
takes place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed on, the principal
national securities exchange on which the shares of Common Stock are listed or
admitted to trading or, if the shares of Common Stock are not listed or admitted
to trading on any national securities exchange, the last quoted price or, if not
so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by Nasdaq or such other system then in use,
or, if on any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected by the
Board. If on any such date no market maker is making a market in the Common
Stock, the fair value of such shares on such date as determined in good faith by
the Board shall be used. The term "Trading Day" shall mean a day on which the
principal national securities exchange on which the shares of Common Stock are
listed or admitted to trading is open for the transaction of business or, if the
shares of Common Stock are not listed or admitted to trading on any national
securities exchange, a Business Day. If the Common Stock is not publicly held or
not so listed or traded, Current Market Price per share shall mean the fair
value per share as determined in good faith by the Board whose determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the Current
Market Price per share of Preferred Stock shall be determined in the same manner
as set forth above for the Common Stock in clause (i) of this Section 11(d)
(other than the last sentence thereof). If the Current Market Price per share of
Preferred Stock cannot be determined in the manner provided above or if the
Preferred Stock is not publicly held or listed or traded in a manner described
in clause (i) of this Section 11(d), the Current Market Price per share of
Preferred Stock shall be
18
conclusively deemed to be an amount equal to 100 (as such number may be
appropriately adjusted for such events as stock splits, stock dividends and
recapitalizations with respect to the Common Stock occurring after the date of
this Agreement) multiplied by the Current Market Price per share of the Common
Stock. If neither the Common Stock nor the Preferred Stock is publicly held or
so listed or traded, Current Market Price per share of the Preferred Stock shall
mean the fair value per share as determined in good faith by the Board, whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes. For all purposes of this Agreement, the
Current Market Price of one one-hundredth of a share of Preferred Stock shall be
equal to the Current Market Price of one share of Preferred Stock divided by
100.
(iii) For the purpose of any computation hereunder, the value of
any securities or assets other than Common Stock or Preferred Stock shall be the
fair value as determined in good faith by the Board or by a nationally
recognized investment banking firm selected by the Board, which determination
shall be described in a statement filed with the Rights Agent and shall be
conclusive for all purposes.
(e) Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent (1%) in the Purchase Price;
provided, however, that any adjustments which by reason of this Section 11(e)
are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made
to the nearest cent or to the nearest ten-thousandth of a share of Common Stock
or other share or one-millionth of a share of Preferred Stock, as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
(3) years from the date of the transaction which mandates such adjustment, or
(ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than
Preferred Stock, thereafter the number of such other shares so receivable upon
exercise of any Right and the Purchase Price thereof shall be subject to
adjustment from time to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock contained in
Sections 11(a), (b), (c), (e), (g), (h), (i), (j), (k) and (m) hereof, and the
provisions of Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred
Stock shall apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided
in Section 11(i) hereof, upon each adjustment of the Purchase Price as a result
of the calculations made in Sections 11(b) and (c) hereof, each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price,
19
that number of one one-hundredths of a share of Preferred Stock obtained by (i)
multiplying (x) the number of one one-hundredths of a share covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price in effect
immediately prior to such adjustment of the Purchase Price, and (ii) dividing
the product so obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in lieu of any adjustment in
the number of shares of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest
one-ten-thousandth) obtained by dividing the Purchase Price in effect
immediately prior to adjustment of the Purchase Price by the Purchase Price in
effect immediately after adjustment of the Purchase Price. The Company shall
make a public announcement of its election to adjust the number of Rights,
indicating the record date for the adjustment, and, if known at the time, the
amount of the adjustment to be made, and shall promptly give the Rights Agent a
copy of such announcement. The record date may be the date on which the Purchase
Price is adjusted or any day thereafter, but, if the Rights Certificates have
been issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Rights Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Rights Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein (and may bear, at the option
of the Company, the adjusted Purchase Price) and shall be registered in the
names of the holders of record of Rights Certificates on the record date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Rights Certificates theretofore and thereafter
issued may continue to express the Purchase Price per share and the number of
shares which were expressed in the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value of the shares of Common Stock
issuable upon exercise of the Rights, the Company shall take any corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue, fully paid and nonassessable, such number
of one one-hundredths of a share of Preferred Stock at such adjusted Purchase
Price.
20
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer (and shall give prompt written
notice of such election to the Rights Agent) until the occurrence of such event
the issuance to the holder of any Right exercised after such record date the
number of one one-hundredths of a share of Preferred Stock and other capital
stock or securities of the Company, if any, issuable upon such exercise over and
above the number of one one-hundredths of a share of Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares or securities upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that in their good faith judgment the Board shall determine to be
advisable in order that any (i) consolidation or subdivision of the Preferred
Stock, (ii) issuance wholly for cash of any shares of Preferred Stock at less
than the Current Market Price, (iii) issuance wholly for cash of any shares of
Preferred Stock or securities which by their terms are convertible into or
exchangeable for shares of Preferred Stock, (iv) stock dividends, or (v)
issuance of rights, options or warrants referred to in this Section 11,
hereafter made by the Company to holders of its Preferred Stock shall not be
taxable to such stockholders.
(n) The Company covenants and agrees that it shall not, at any time
after the Distribution Date, (i) consolidate with any other Person (other than a
Subsidiary of the Company in a transaction that complies with Section 11(o)
hereof), (ii) merge with or into any other Person (other than a Subsidiary of
the Company in a transaction which complies with Section 11(o) hereof), or (iii)
sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction, or a series of related transactions, assets or earning power
aggregating more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person or Persons (other than the
Company or any of its Subsidiaries in one or more transactions each of which
complies with Section 11(o) hereof), if (x) at the time of or immediately after
such consolidation, merger or sale there are any rights, warrants or other
instruments or securities outstanding or agreements in effect that would
substantially diminish or otherwise eliminate the benefits intended to be
afforded by the Rights or (y) prior to, simultaneously with or immediately after
such consolidation, merger or sale, the stockholders of the Person who
constitutes, or would constitute, the "Principal Party" for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 27 hereof, take
(or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time after the Rights Dividend
Declaration Date and prior to the
21
Distribution Date (i) declare a dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide the outstanding shares
of Common Stock, or (iii) combine the outstanding shares of Common Stock into a
smaller number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but prior to
the Distribution Date, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by a
fraction the numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the computations and facts accounting for
such adjustment, (b) promptly file with the Rights Agent, and with each transfer
agent for the Preferred Stock and the Common Stock, a copy of such certificate,
and (c) mail a brief summary thereof to each holder of a Rights Certificate (or,
if prior to the Distribution Date, to each holder of a certificate representing
shares of Common Stock) in accordance with Section 26 hereof. The Rights Agent
shall be fully protected in relying on any such certificate and on any
adjustment therein contained and shall have no duty with respect to and shall
not be deemed to have knowledge of any such adjustment unless and until it shall
have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning
Power.
(a) In the event that, following the Stock Acquisition Date, directly
or indirectly, (x) the Company shall consolidate with, or merge with and into,
any other Person (other than a Subsidiary of the Company in a transaction that
complies with Section 11(o) hereof), and the Company shall not be the continuing
or surviving corporation of such consolidation or merger, (y) any Person (other
than a Subsidiary of the Company in a transaction that complies with Section
11(o) hereof) shall consolidate with, or merge with or into, the Company, and
the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the outstanding shares of Common Stock shall be changed into or
exchanged for stock or other securities of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in one transaction or a
series of related transactions, assets or earning power aggregating more than
50% of the assets or earning power of the Company and its Subsidiaries (taken as
a whole) to any Person or Persons (other than the Company or any Subsidiary of
the Company in one or more transactions each of which complies with Section
11(o) hereof), then, and in each such case and except as contemplated in Section
13(d) hereof, proper provision shall be made so that: (i) each holder of a
Right, except as provided in Section 7(e) hereof, shall thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable and freely tradable shares of
common stock of the Principal Party (as such term is hereinafter defined), not
subject to any liens, encumbrances, rights of first refusal or other adverse
claims, as
22
shall be equal to the result obtained by (1) multiplying the then current
Purchase Price by the number of one one-hundredths of a share of Preferred Stock
for which a Right was exercisable immediately prior to the first occurrence of a
Section 13 Event (or, if a Section 11(a)(ii) Event has occurred prior to the
first occurrence of a Section 13 Event, multiplying the number of such one
one-hundredths of a share for which a Right was exercisable immediately prior to
the first occurrence of a Section 11(a)(ii) Event by the Purchase Price in
effect immediately prior to such first occurrence), and dividing that product
(which, following the first occurrence of a Section 13 Event, shall be referred
to as the "Purchase Price" for each Right and for all purposes of this
Agreement) by (2) 50% of the Current Market Price (determined pursuant to
Section 11(d)(i) hereof) per share of the common stock of such Principal Party
on the date of consummation of such Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" shall thereafter be deemed to refer to such Principal
Party, it being specifically intended that the provisions of Section 11 hereof
shall apply only to such Principal Party following the first occurrence of a
Section 13 Event; (iv) such Principal Party shall take such steps (including,
but not limited to, the reservation of a sufficient number of shares of its
common stock) in connection with the consummation of any such transaction as may
be necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares of common
stock thereafter deliverable upon the exercise of the Rights; and (v) the
provisions of Section 11(a)(ii) hereof shall be of no effect following the first
occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a) hereof, the
Person that is the issuer of any securities into which
shares of Common Stock of the Company are converted in such
merger or consolidation, and if no securities are so issued,
the Person that is the other party to such merger or
consolidation; and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a) hereof, the Person that
is the party receiving the greatest portion of the assets or
earning power transferred pursuant to such transaction or
transactions;
provided, however, that in any such case, (1) if the common stock of such Person
is not at such time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the common stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
and (2) in case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the common stock of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the common stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
authorized shares of its
23
common stock which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing for the terms
set forth in paragraphs (a) and (b) of this Section 13 and further providing
that, as soon as practicable after the date of any Section 13 Event, the
Principal Party will:
(i) prepare and file a registration statement under the Act,
with respect to the Rights and the securities purchasable upon exercise of the
Rights on an appropriate form, and will use its best efforts to cause such
registration statement to (A) become effective as soon as practicable after such
filing and (B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates that comply in all
respects with the requirements for registration on Form 10 under the Exchange
Act.
The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event
shall occur at any time after the occurrence of a Section 11(a)(ii) Event, the
Rights which have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a) hereof.
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in subparagraphs
(x) and (y) of Section 13(a) if (i) such transaction is consummated with a
Person or Persons who acquired shares of Common Stock pursuant to a tender offer
or exchange offer for all outstanding shares of Common Stock which complies with
the provisions of Section 11(a)(ii)(B) hereof (or a wholly owned subsidiary of
any such Person or Persons), (ii) the price per share of Common Stock offered in
such transaction is not less than the price per share of Common Stock paid to
all holders of shares of Common Stock whose shares were purchased pursuant to
such tender offer or exchange offer, and (iii) the form of consideration being
offered to the remaining holders of shares of Common Stock pursuant to such
transaction is the same as the form of consideration paid pursuant to such
tender offer or exchange offer. Upon consummation of any such transaction
contemplated by this Section 13(d), all Rights hereunder shall expire.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of Rights,
except prior to the Distribution Date as provided in Section 11(p) hereof, or to
distribute Rights Certificates that evidence fractional Rights. If the Company
determines not to issue fractional Rights, there shall be paid in lieu thereof
to the registered holders of the Rights Certificates with regard to which such
fractional Rights would otherwise be issuable, an amount in cash equal to the
same fraction of the current market value of a whole Right. For purposes of this
Section 14(a), the current market value of a whole Right shall be the closing
price of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing price of
the Rights for any day shall be the last sale price, regular way, or, in case no
such sale takes place on such day, the average of the closing bid and asked
24
prices, regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted to
trading, or if the Rights are not listed or admitted to trading on any national
securities exchange, the last quoted price or, if not so quoted, the average of
the high bid and low asked prices in the over-the-counter market, as reported by
Nasdaq or such other system then in use or, if on any such date the Rights are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Rights
selected by the Board. If on any such date no such market maker is making a
market in the Rights the fair value of the Rights on such date as determined in
good faith by the Board shall be used.
(b) The Company shall not be required to issue fractions of shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock) upon exercise of the Rights or to
distribute certificates that evidence fractional shares of Preferred Stock
(other than fractions which are integral multiples of one one-hundredth of a
share of Preferred Stock). In lieu of fractional shares of Preferred Stock that
are not integral multiples of one one-hundredth of a share of Preferred Stock,
the Company may pay to the registered holders of Rights Certificates, with
regard to which such fractional shares of Preferred Stock would otherwise be
issuable, at the time such Rights are exercised as herein provided, an amount in
cash equal to the same fraction of the current market value of one one-hundredth
of a share of Preferred Stock. For purposes of this Section 14(b), the current
market value of one one-hundredth of a share of Preferred Stock shall be one
one-hundredth of the closing price per share of Common Stock (determined
pursuant to Section 11(d)(ii) hereof) on the Trading Day immediately prior to
the date of such exercise.
(c) Following the occurrence of a Triggering Event, the Company shall
not be required to issue fractions of shares of Common Stock upon exercise of
the Rights or to distribute certificates which evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the
current market value of one share of Common Stock. For purposes of this Section
14(c), the current market value of one share of Common Stock shall be the
closing price of one share of Common Stock (as determined pursuant to Section
11(d)(i) hereof) for the Trading Day immediately prior to the date of such
exercise.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right, except as permitted by this Section 14.
(e) Whenever a payment for fractional Rights or fractional shares is
to be made by the Rights Agent, the Company shall (i) promptly prepare and
deliver to the Rights Agent a certificate setting forth in reasonable detail the
facts related to such payment and the prices and/or formulas utilized in
calculating such payments, and (ii) provide sufficient monies to the Rights
Agent in the form of fully collected funds to make such payments. The Rights
Agent shall be fully protected in relying upon such a certificate and shall have
no duty with respect to, and shall not be deemed to have knowledge of, any
payment for fractional Rights or fractional shares under any Section of this
Agreement relating to the payment of fractional Rights or
25
fractional shares unless and until the Rights Agent shall have received such a
certificate and sufficient monies.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent in Section 18
hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or offices of the Rights Agent designated for such
purposes, duly endorsed or accompanied by a proper instrument of transfer and
with the appropriate forms of assignment and certificates duly completed and
fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company and
the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common Stock
certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent, subject to the last sentence of
Section 7(e) hereof, shall be required to be affected by any notice to the
contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or other Person as a result of its inability to perform any of its
obligations under this Agreement by reason of any preliminary or permanent
injunction or other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or
commission, or any statute, rule, regulation or executive order promulgated or
enacted by any governmental authority, prohibiting or otherwise restraining
performance of such obligation; provided,
26
however, the Company must use its best efforts to have any such order, decree or
ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No holder,
as such, of any Rights Certificate shall be entitled to vote, receive dividends
or be deemed for any purpose the holder of the number of one one-hundredths of a
share of Preferred Stock or any other securities of the Company which may at any
time be issuable on the exercise of the Rights represented thereby, nor shall
anything contained herein or in any Rights Certificate be construed to confer
upon the holder of any Rights Certificate, as such, any of the rights of a
stockholder of the Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof, or to give or
withhold consent to any corporate action, or to receive notice of meetings or
other actions affecting stockholders (except as provided in Section 25 hereof),
or to receive dividends or subscription rights, or otherwise, until the Right or
Rights evidenced by such Rights Certificate shall have been exercised in
accordance with the provisions hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
disbursements and other disbursements incurred in the preparation, execution,
delivery, amendment and administration 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, damage,
judgment, fine, penalty, claim, demand, settlement, cost or expense, incurred
without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent (each as determined by a final, non-appealable order, judgment,
decree or ruling of a court of competent jurisdiction) for any action taken,
suffered or omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including, without limitation, the costs and
expenses of defending against any claim of liability in the premises. The costs
and expenses incurred in enforcing this right of indemnification shall be paid
by the Company. The provisions of this Section 18 and Section 20 below shall
survive the termination of this Agreement, the exercise or expiration of the
Rights and the resignation or removal of the Rights Agent.
(b) The Rights Agent shall be authorized and protected and shall
incur no liability for or in respect of any action taken, suffered or omitted by
it in connection with its acceptance and administration of this Agreement in
reliance upon any Rights Certificate or certificate for Common Stock or for
other securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, verified or acknowledged, by
the proper Person or Persons. The Rights Agent shall not be deemed to have
knowledge of any event of which it was supposed to receive notice thereof
hereunder, and the Rights Agent shall be fully protected and shall incur no
liability for failing to take any action in connection therewith unless and
until it has received such notice in writing.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
27
(a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto;
provided, however, that such Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. In case at the
time such successor Rights Agent shall succeed to the agency created by this
Agreement, any of the Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the counter-signature of a
predecessor Rights Agent and deliver such Rights Certificates so countersigned;
and in case at that time any of the Rights Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or the name of the successor
Rights Agent; and in all such cases such Rights Certificates shall have the full
force provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Rights Certificates shall have been countersigned
but not delivered, the Rights Agent may adopt the countersignature under its
prior name and deliver Rights Certificates so countersigned; and in case at that
time any of the Rights Certificates shall not have been countersigned, the
Rights Agent may countersign such Rights Certificates either in its prior name
or in its changed name; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes only the
duties and obligations imposed by this Agreement (and no implied duties and
obligations) upon the following terms and conditions, by all of which the
Company and the holders of Rights Certificates, by their acceptance thereof,
shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent, and the
Rights Agent shall incur no liability for or in respect of, any action taken,
suffered or omitted by it in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person and the
determination of Current Market Price) be proved or established by the Company
prior to taking, suffering or omitting to take any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a
certificate signed by the President and Chief Executive Officer, the Chief
Financial Officer, any Vice President, the Treasurer, any Assistant Treasurer,
the Secretary or any Assistant Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full authorization and protection to
the Rights Agent and the Rights Agent shall incur no liability for or in respect
of, any action taken, suffered or omitted to be taken by it under the provisions
of this Agreement in reliance upon such certificate.
28
(c) The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct (each as determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction). Anything to the contrary notwithstanding, in no event shall the
Rights Agent be liable for special, punitive, indirect, consequential or
incidental loss or damage of any kind whatsoever (including but not limited to
lost profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage. Any liability of the Rights Agent under this Rights
Agreement will be limited to the amount of fees paid by the Company to the
Rights Agent.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Rights
Certificates or be required to verify the same (except as to its
countersignature on such Rights Certificates), but all such statements and
recitals are and shall be deemed to have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility or have
any liability in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any
Rights Certificate; nor shall it be responsible for any adjustment required
under the provisions of Section 11 or Section 13 hereof or responsible for the
manner, method or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except with respect
to the exercise of Rights evidenced by Rights Certificates after receipt of a
certificate describing any such adjustment furnished in accordance with Section
12); nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common Stock to
be issued pursuant to this Agreement or any Rights Certificate or as to whether
any shares of Common Stock will, when so issued, be validly authorized and
issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman, the President and Chief Executive Officer, the Chief Financial
Officer, any Vice President, the Secretary, any Assistant Secretary, the
Treasurer or any Assistant Treasurer of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and such
instructions shall be full authorization and protection to the Rights Agent and
the Rights Agent shall incur no liability for or in respect of any action taken,
suffered or omitted to be taken by it in accordance with instructions of any
such officer.
(h) The Rights Agent and any stockholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as
29
though it were not the Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for the Company or
for any other Person.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct absent gross negligence, bad faith or willful misconduct
(each as determined by a final, non-appealable order, judgment, decree or ruling
of a court of competent jurisdiction) in the selection and continued employment
thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
it believes that repayment of such funds or adequate indemnification against
such risk or liability is not assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has either not been completed or indicates an affirmative
response to clause 1 or 2 thereof, the Rights Agent shall not take any further
action with respect to such requested exercise or transfer without first
consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon thirty (30) days' notice in writing mailed to the Company, and to each
transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
and Preferred Stock, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by any registered
holder of a Rights Certificate (who shall, with such notice, submit his Rights
Certificate for inspection by the Company), then any registered holder of any
Rights Certificate may apply to any court of competent jurisdiction for the
appointment of a new Rights Agent. Any successor Rights Agent, whether appointed
by the Company or by such a court, shall be (a) a Person organized and doing
business under the laws of the United States or any state thereof in good
standing, which is authorized under such laws to exercise stock transfer powers
and is subject to supervision or examination by federal or state authority and
which has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $50,000,000 or (b) an affiliate of a Person described in
clause (a) of this sentence. After appointment, the successor Rights Agent shall
be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at
30
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock
and Preferred Stock, and mail a notice thereof in writing to the registered
holders of the Rights Certificates. Failure to give any notice provided for in
this Section 21, however, or any defect therein, shall not affect the legality
or validity of the resignation or removal of the Rights Agent or the appointment
of the successor Rights Agent, as the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of the
provisions of this Agreement or of the Rights to the contrary, the Company may,
at its option, issue new Rights Certificates evidencing Rights in such form as
may be approved by the Board to reflect any adjustment or change in the Purchase
Price and the number or kind or class of shares or other securities or property
purchasable under the Rights Certificates made in accordance with the provisions
of this Agreement. In addition, in connection with the issuance or sale of
shares of Common Stock following the Distribution Date (other than upon exercise
of a Right) and prior to the redemption or expiration of the Rights, the Company
(a) shall, with respect to shares of Common Stock so issued or sold pursuant to
the exercise of stock options or under any employee plan or arrangement, or upon
the exercise, conversion or exchange of securities, notes, warrants or
debentures issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued, and (ii)
no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination.
(a) The Board may, at its option, at any time prior to the earlier of
(i) the Close of Business on the tenth day following the Stock Acquisition Date
(or, if the Stock Acquisition Date shall have occurred prior to the Record Date,
the close of business on the tenth day following the Record Date), or (ii) the
Final Expiration Date, redeem all but not less than all of the then outstanding
Rights at a redemption price of $0.01 per Right, as such amount may be
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "Redemption Price"). If, following the
occurrence of a Stock Acquisition Date and following the expiration of the right
of redemption set forth in the preceding sentence but prior to any Triggering
Event, (i) a Person who was an Acquiring Person shall have transferred or
otherwise disposed of a number of shares of Common Stock in one or more
transactions, not directly or indirectly involving the Company or any of its
Subsidiaries, which did not result in the occurrence of a Triggering Event such
that such Person is thereafter a Beneficial Owner of less than 15% of the
outstanding shares of Common Stock, and (ii) there are no other Persons,
immediately following the occurrence of the event described in clause (i), who
are Acquiring Persons, and (iii) the Board shall so approve, then the Company's
right of redemption set forth in the preceding sentence shall be reinstated and
thereafter be subject to the provisions of this Section 23. If
31
following the occurrence of a Stock Acquisition Date and following the
expiration of the right of redemption set forth in the first sentence hereof,
but prior to any Triggering Event, the Board may, at its option, redeem all but
not less than all of the then outstanding Rights at the Redemption Price,
provided, that such redemption is effected in connection with the approval by
the Board of Directors of the Company of, and the execution and delivery by the
Company of an agreement providing for, a merger, consolidation, sale or transfer
of all or substantially all of the assets of the Company or other business
combination, in each case which involves the Company but does not involve an
Acquiring Person or an Affiliate or Associate of an Acquiring Person or any
other Person acting directly or indirectly on behalf of or in association with
any such Acquiring Person, Affiliate or Associate. Notwithstanding anything
contained in this Agreement to the contrary, the Rights shall not be exercisable
after the first occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption set forth in the first sentence of this Section
23(a) has expired.
(b) The Company may, at its option, pay the Redemption Price in cash,
shares of Common Stock (based on the Current Market Price as defined in Section
11(d) hereof, of the Common Stock at the time of redemption) or any other form
of consideration deemed appropriate by the Board.
(c) Immediately upon the action of the Board ordering the redemption
of the Rights, evidence of which shall have been filed with the Rights Agent and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price for each Right so held. Promptly after
the action of the Board ordering the redemption of the Rights, the Company shall
give notice of such redemption to the Rights Agent in writing and the holders of
the then outstanding Rights by mailing such notice to all such holders at each
holder's last address as it appears upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the Transfer Agent
for the Common Stock. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the notice. Each such
notice of the redemption will state the method by which the payment of the
Redemption Price will be made.
Section 24. Exchange. (a) At any time after any Person becomes an Acquiring
Person the Board may, at its option, exchange all or part of the then
outstanding and exercisable Rights (which (i) shall not include Rights that have
become null and void pursuant to Section 7(e) and (ii) shall include, without
limitation, any Rights issued after the Distribution Date in connection with the
exercise of options pursuant to any employee benefit plan of the Company or any
Subsidiary of the Company) for shares of Common Stock at an exchange ratio of
one share of Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than the Company, any
of its Subsidiaries, any employee benefit plan of the Company or any of its
Subsidiaries or any Person organized, appointed or established by the Company or
any of its Subsidiaries for or pursuant to the terms of any such plan), together
with all Affiliates and Associates of such Person, becomes the Beneficial Owner
of 50% or more of the shares of Common Stock then outstanding.
32
(b) Immediately upon the action of the Board electing to exchange any
Rights pursuant to Section 24(a) and without any further action and without any
notice, the right to exercise such Rights will terminate and thereafter the only
right of the holders of such Rights shall be to receive that number of shares of
Common Stock equal to the number of such Rights held by such holder multiplied
by the Exchange Ratio. The Company shall promptly thereafter give written notice
of such exchange to the Rights Agent and the holders of the Rights to be
exchanged in the manner set forth in Section 26; provided, however, that the
failure to give, or any defect in, such notice shall not affect the validity of
such exchange. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the shares of Common
Stock for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have become void
pursuant to Section 7(e)) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its
option, may substitute Common Stock Equivalents (as defined in Section
11(a)(iii)) for shares of Common Stock exchangeable for Rights, at the initial
rate of one Common Stock Equivalent for each share of Common Stock, as
appropriately adjusted to reflect adjustments in dividend, liquidation and
voting rights of Common Stock Equivalents pursuant to the terms thereof, so that
each Common Stock Equivalent delivered in lieu of each share of Common Stock
shall have essentially the same dividend, liquidation and voting rights as one
share of Common Stock.
(d) In the event that the number of shares of Common Stock which are
authorized by the Company's certificate of incorporation but not outstanding or
reserved for issuance are not sufficient to permit an exchange of Rights as
contemplated by this Section 24, the Company shall take all such action as may
be necessary to authorize additional shares of Common Stock for issuance upon
exchange of the Rights.
(e) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates that evidence fractional shares of
Common Stock. In lieu of fractional shares of Common Stock, the Company may pay
to the registered holders of Rights Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole share of
Common Stock. For purposes of this Section 24(e), the current market value of a
whole share of Common Stock shall be the closing price per share of Common Stock
(determined pursuant to Section 11(d)(ii) hereof) on the Trading Day immediately
prior to the date of exchange pursuant to this Section 24.
Section 25. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class to the
holders of Preferred Stock or to make any other distribution to the holders of
Preferred Stock (other than a regular quarterly cash dividend out of earnings or
retained earnings of the Company), or (ii) to offer to the holders of Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, or (iii) to
33
effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of
Preferred Stock), or (iv) to effect any consolidation or merger into or with any
other Person (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o) hereof), or to effect any sale or other transfer (or
to permit one or more of its Subsidiaries to effect any sale or other transfer),
in one transaction or a series of related transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person or Persons (other than the Company or any of its
Subsidiaries in one or more transactions each of which complies with Section
11(o) hereof), or (v) 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
Rights Certificate, to the extent feasible, in accordance with Section 26
hereof, a notice of such proposed action, which shall specify the record date
for the purposes of such stock dividend or distribution of rights or warrants,
or the date on which such reclassification, consolidation, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and the date
of participation therein by the holders of the shares of Preferred Stock, if any
such date is to be fixed, and such notice shall be so given in the case of any
action covered by clause (i) or (ii) above at least twenty (20) days prior to
the record date for determining holders of the shares of Preferred Stock for
purposes of such action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the shares of Preferred Stock,
whichever shall be the earlier.
(b) In case any Section 11(a)(ii) Event shall occur, then, in any
such case, (i) the Company shall as soon as practicable thereafter give to each
holder of a Rights Certificate and to the Rights Agent, and in accordance with
Section 26 hereof, a notice of the occurrence of such event, which shall specify
the event and the consequences of the event to holders of Rights under Section
11(a)(ii) hereof and (ii) all references in the preceding paragraph to Common
Stock shall, to the extent appropriate, also be deemed thereafter to refer to
other securities.
Section 26. Notices. Notices or demands authorized by this Agreement to be
given or made by the Rights Agent or by the holder of any Rights Certificate to
or on the Company shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed (until another address is filed in writing with
the Rights Agent) or by facsimile transmission as follows:
Online Resources Corporation
0000 Xxxxxxxx Xxxxx
XxXxxx, Xxxxxxxx 00000
Attention: Chief Executive Officer
Facsimile No.: (000) 000-0000
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of any Rights
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) or by facsimile transmission as follows:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
00
Xxx Xxxx, XX 00000
Attention: Relationship Manager and General Counsel
Facsimile No.: 000-000-0000
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 27. Supplements and Amendments. At any time prior to the
Distribution Date, and subject to the other provisions of this Section 27, the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock. From and after the
Distribution Date and subject to the other provisions of this Section 27, the
Company and the Rights Agent shall, if the Company so directs, supplement or
amend this Agreement without the approval of any holders of Rights Certificates
in order (i) to cure any ambiguity, (ii) to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provisions herein, (iii) to shorten or lengthen any time period hereunder or
(iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Rights Certificates (other than an Acquiring Person
or an Affiliate or Associate of such Person); provided, however, that this
Agreement may not be supplemented or amended, (A) whether before or after the
Distribution Date, to lengthen a time period relating to when the Rights may be
redeemed or to modify the ability (or inability) of the Board to redeem the
Rights, in either case at such time as the Rights are not then redeemable or (B)
after the Distribution Date, to lengthen, pursuant to clause (iii) of this
sentence, any other time period unless such lengthening is for the purpose of
protecting, enhancing or clarifying the rights of or the benefits to the holders
of Rights (other than any Acquiring Person or an Associate or Affiliate of such
Person). Upon the delivery of a certificate from an appropriate officer of the
Company which states that the proposed supplement or amendment is in compliance
with the terms of this Section 27, and provided such supplement or amendment
does not change or increase the Rights Agent's rights, duties, liabilities or
obligations, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the Redemption Price, the
Final Expiration Date, the Purchase Price or the number of one one-hundredths of
a share of Preferred Stock for which a Right is exercisable. 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.
Section 28. Successors. All the covenants and provisions of this Agreement
by or for the benefit of the Company or the Rights Agent shall bind and inure to
the benefit of their respective successors and assigns hereunder.
Section 29. Determinations and Actions by the Board of Directors, etc. For
all purposes of this Agreement, any calculation of the number of shares of
Common Stock outstanding at any particular time, including for purposes of
determining the particular percentage of such outstanding shares of Common Stock
of which any Person is the Beneficial Owner, shall be
35
made in accordance with the provisions of the last sentence of Rule
13d-3(d)(l)(i) of the General Rules and Regulations under the Exchange Act. The
Board 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 (including a
determination to redeem or not redeem the Rights or to amend the Agreement). All
such actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) which
are done or made by the Board in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other Persons, and (y) not subject any member of the Board of Directors of the
Company to any liability to the holders of the Rights. The Rights Agent shall
always be entitled to assume that the Company's Board of Directors acted in good
faith and shall be fully protected and incur no liability in reliance thereon.
Section 30. Benefits of this Agreement. Nothing in this Agreement shall be
construed to give to any Person other than the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock) any legal or equitable right,
remedy or claim under this Agreement; but this Agreement shall be for the sole
and exclusive benefit of the Company, the Rights Agent and the registered
holders of the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
Section 31. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated,
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board determines
in its good faith judgment that severing the invalid language from this
Agreement would materially and adversely affect the purpose or effect of this
Agreement, the right of redemption set forth in Section 23 hereof shall be
reinstated and shall not expire until the close of business on the tenth day
following the date of such determination by the Board. Without limiting the
foregoing, if any provision requiring that a determination made by less than the
entire Board is held by a court of competent jurisdiction or other authority to
be invalid, void or unenforceable, such determination shall then be made by the
entire Board.
Section 32. Governing Law. This Agreement, each Right and each Rights
Certificate issued hereunder shall be deemed to be a contract made under the
internal laws of the State of Delaware and for all purposes shall be governed by
and construed in accordance with the laws of such State applicable to contracts
made and to be performed entirely within such State; provided, however, that all
provisions regarding the rights, duties and obligations of the Rights Agent
shall be governed by and construed in accordance with the laws of the
Commonwealth of Virginia applicable to contracts made and to be performed
entirely within such state.
36
Section 33. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
[THE REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
37
IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to
be duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: ONLINE RESOURCES CORPORATION
By: /s/ Xxxx X. Xxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------- -------------------------------
Name: Xxxx X. Xxxxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Chief Financial Officer Title: Chairman and Chief
Executive Officer
Attest: AMERICAN STOCK TRANSFER AND
TRUST COMPANY
By: /s/ Xxxxx Xxxxxx By: /s/ Xxxxxxx X. Xxxxxx
------------------------------- -------------------------------
Name: Xxxxx Xxxxxx Name: Xxxxxxx X. Xxxxxx
Title: Assistant Secretary Title: Vice President
38
EXHIBIT A
CERTIFICATE OF DESIGNATION
SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
_______________
($0.01 Par Value)
of
ONLINE RESOURCES CORPORATION
Pursuant to Section 151 of the
General Corporation Law of the State of Delaware
_______________
ONLINE RESOURCES CORPORATION, a corporation organized and existing under
the General Corporation Law of the State of Delaware (the "Corporation"), in
accordance with the provisions of Section 103 thereof, DOES HEREBY CERTIFY:
FIRST: That pursuant to the authority conferred upon the Board of Directors
by the Restated Certificate of Incorporation, as amended, of the Corporation,
the Board of Directors of the Corporation adopted the following resolutions
creating a series of 297,500 shares of Preferred Stock, $0.01 par value per
share, designated as Series B Junior Participating Preferred Stock:
RESOLVED: That pursuant to the authority vested in the Board of Directors
of this Corporation in accordance with the provisions of Article
FOURTH of its Restated Certificate of Incorporation, as amended,
a series of Preferred Stock of the Corporation (the "Series B
Junior Participating Preferred Stock") be, and it hereby is,
created, and that the designation and amount thereof and the
voting powers, preferences and relative, participating, optional
and other special rights of the shares of the Series B Junior
Participating Preferred Stock, and the qualifications,
limitations or restrictions thereof (in addition to the
provisions set forth in the Restated Certificate of Incorporation
of the Corporation, as amended, which are applicable to the
Preferred Stock of all classes and series), shall be as set forth
in Appendix A attached hereto.
RESOLVED: That the Chairman, the President and Chief Executive Officer, the
Chief Financial Officer, or any Senior Vice President and the
Secretary or any Assistant Secretary of the Corporation be, and
they hereby are, authorized and directed, in the name and on
behalf of the Corporation, to file the Certificate of Designation
in accordance with the provisions of Delaware General Corporation
Law and to take such actions as they may deem necessary or
appropriate to carry out the intent of the foregoing resolution.
SECOND: That the aforesaid resolutions were duly and validly adopted in
accordance with the applicable provisions of Section 151 of the General
Corporation Law of the State of Delaware, and the Restated Certificate of
Incorporation, as amended, and By-Laws of the Corporation.
THIRD: That the aforesaid designation shall become effective on December
24, 2001.
IN WITNESS WHEREOF, said Online Resources Corporation has caused this
Certificate to be executed and attested, this 19th day of December, 2001.
ONLINE RESOURCES CORPORATION
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------
Xxxxxxx X. Xxxxxx
Chairman and Chief Executive Officer
Attest:
/s/ Xxxx X. Xxxxxxxx
-----------------------------------
Xxxx X. Xxxxxxxx
Chief Financial Officer and
Executive Vice President
2
Appendix A
Section 1. Designation and Amount. The shares of such series shall be
designated as "Series B Junior Participating Preferred Stock" and the number of
shares constituting such series shall be 297,500. Such number of shares may be
increased or decreased by resolution of the Board of Directors; provided,
however, that no decrease shall reduce the number of shares of Series B Junior
Participating Preferred Stock to a number less than the number of shares then
outstanding plus the number of shares reserved for issuance upon the exercise of
outstanding options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible into Series B
Junior Participating Preferred Stock.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any series
of Preferred Stock ranking prior and superior to the shares of Series B Junior
Participating Preferred Stock with respect to dividends, the holders of shares
of Series B Junior Participating Preferred Stock, in preference to the holders
of Common Stock, $0.01 par value per share (the "Common Stock"), of the
Corporation, and of any other junior stock, shall be entitled to receive, when,
as and if declared by the Board of Directors, out of funds of the Corporation
legally available for the payment of dividends, quarterly dividends payable in
cash on March 31, June 30, September 30 and December 31 in each year (each such
date being referred to herein as a "Quarterly Dividend Payment Date"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series B Junior Participating Preferred
Stock, in an amount per share (rounded to the nearest cent) equal to the greater
of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set
forth, 100 times the aggregate per share amount of all cash dividends, and 100
times the aggregate per share amount (payable in kind) of all non-cash dividends
or other distributions, other than a dividend payable in shares of Common Stock
or a subdivision of the outstanding shares of Common Stock (by reclassification
or otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date, or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share or fraction of a
share of Series B Junior Participating Preferred Stock. In the event the
Corporation shall at any time declare or pay any dividend on Common Stock
payable in shares of Common Stock or effect a subdivision, combination or
consolidation of the outstanding Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater or
lesser number of shares of Common Stock, then in each such case the amount to
which holders of shares of Series B Junior Participating Preferred Stock were
entitled immediately prior to such event under clause (b) of the preceding
sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the
Series B Junior Participating Preferred Stock as provided in paragraph (A) above
immediately after it declares a dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common Stock) and the Corporation
shall pay such dividend or distribution on the Series B Junior Participating
Preferred Stock before the dividend or distribution declared on the
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Common Stock is paid or set apart; provided, however, that, in the event no
dividend or distribution shall have been declared on the Common Stock during the
period between any Quarterly Dividend Payment Date and the next subsequent
Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series B
Junior Participating Preferred Stock shall nevertheless be payable on such
subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Series B Junior Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue of such shares of Series
B Junior Participating Preferred Stock, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend Payment Date, in
which case dividends on such shares shall begin to accrue from the date of issue
of such shares, or unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of holders of shares of
Series B Junior Participating Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment Date, in either of which
events such dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear
interest. Dividends paid on the shares of Series B Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the
time accrued and payable on such shares shall be allocated pro rata on a
share-by-share basis among all such shares at the time outstanding. The Board of
Directors may fix a record date for the determination of holders of shares of
Series B Junior Participating Preferred Stock entitled to receive payment of a
dividend or distribution declared thereon, which record date shall be no more
than 60 days prior to the date fixed for the payment thereof.
Section 3. Voting Rights. The holders of shares of Series B Junior
Participating Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth,
each share of Series B Junior Participating Preferred Stock shall entitle the
holder thereof to 100 votes on all matters submitted to a vote of the
stockholders of the Corporation. In the event the Corporation shall at any time
declare or pay any dividend on Common Stock payable in shares of Common Stock or
effect a subdivision, combination of consolidation of the outstanding Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the number of votes per share to which holders of shares of
Series B Junior Participating Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying such number by a fraction, the
numerator of which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is the number of
shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided herein, by law, or in any other
Certificate of Designation creating a series of Preferred Stock or any similar
stock, the holders of shares of Series B Junior Participating Preferred Stock,
the holders of shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together as one class on all
matters submitted to a vote of stockholders of the Corporation.
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(C) (i) If at any time dividends on any Series B Junior
Participating Preferred Stock shall be in arrears in an amount equal to six (6)
quarterly dividends thereon, the occurrence of such contingency shall xxxx the
beginning of a period (herein called a "default period") which shall extend
until such time when all accrued and unpaid dividends for all previous quarterly
dividend periods and for the current quarterly dividend period on all shares of
Series B Junior Participating Preferred Stock then outstanding shall have been
declared and paid or set apart for payment. During each default period, all
holders of Preferred Stock (including holders of the Series B Junior
Participating Preferred Stock) with dividends in arrears in an amount equal to
six (6) quarterly dividends thereon, voting as a class, irrespective of series,
shall have the right, subject to any further Restated provisions of the
Corporation's Certificate of Incorporation then in effect, to elect two (2)
Directors.
(ii) During any default period, such voting right of the holders
of Series B Junior Participating Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii) of this Section 3(C) or at
any annual meeting of stockholders, and thereafter at annual meetings of
stockholders, provided that neither such voting right nor the right of the
holders of any other series of Preferred Stock, if any, to increase, in certain
cases, the authorized number of Directors shall be exercised unless the holders
of ten percent (10%) in number of shares of Preferred Stock outstanding shall be
present in person or by proxy. The absence of a quorum of the holders of Common
Stock shall not affect the exercise by the holders of Preferred Stock of such
voting right. At any meeting at which the holders of Preferred Stock shall
exercise such voting right initially during an existing default period, they
shall have the right, voting as a class, to elect Directors to fill such
vacancies, if any, in the Board of Directors as may then exist up to two (2)
Directors or, if such right is exercised at an annual meeting, to elect two (2)
Directors. If the number which may be so elected at any special meeting does not
amount to the required number, the holders of the Preferred Stock shall have the
right to make such increase in the number of Directors as shall be necessary to
permit the election by them of the required number. After the holders of the
Preferred Stock shall have exercised their right to elect Directors in any
default period and during the continuance of such period, the number of
Directors shall not be increased or decreased except by vote of the holders of
Preferred Stock as herein provided or pursuant to the rights of any equity
securities ranking senior to or pari passu with the Series B Junior
Participating Preferred Stock.
(iii) Unless the holders of Preferred Stock shall, during an
existing default period, have previously exercised their right to elect
Directors, the Board of Directors may order the calling of a special meeting of
the holders of Preferred Stock, which meeting shall thereupon be called by the
Chairman of the Board or the President of the Corporation. Notice of such
meeting and of any annual meeting at which holders of Preferred Stock are
entitled to vote pursuant to this paragraph (C)(iii) shall be given to each
holder of record of Preferred Stock by mailing a copy of such notice to him at
his last address as the same appears on the books of the Corporation. Such
meeting shall be called for a time not earlier than 10 days and not later than
60 days after such order on request. Notwithstanding the provisions of this
paragraph (C)(iii), no such special meeting shall be called during the period
within 60 days immediately preceding the date fixed for the next annual meeting
of the stockholders.
(iv) In any default period, the holders of Common Stock, and
other classes of stock of the Corporation if applicable, shall continue to be
entitled to elect the whole
A-3
number of Directors until the holders of Preferred Stock shall have exercised
their right to elect two (2) Directors voting as a class, after the exercise of
which right (x) the Directors so elected by the holders of Preferred Stock shall
continue in office until their successors shall have been elected by such
holders or until the expiration of the default period, and (y) any vacancy in
the Board of Directors may (except as provided in paragraph (C)(ii) of this
Section 3) be filled by vote of a majority of the remaining Directors
theretofore elected by the holders of the class of stock which elected the
Director whose office shall have become vacant. References in this paragraph (C)
to Directors elected by the holders of a particular class of stock shall include
Directors elected by such Directors to fill vacancies as provided in clause (y)
of the foregoing sentence.
(v) Immediately upon the expiration of a default period, (x) the
right of the holders of Preferred Stock as a class to elect Directors shall
cease, (y) the term of any Directors elected by the holders of Preferred Stock
as a class shall terminate, and (z) the number of Directors shall be such number
as may be provided for in the Corporation's Restated Certificate of
Incorporation, as amended, or By-Laws irrespective of any increase made pursuant
to the provisions of paragraph (C)(ii) of this Section 3 (such number being
subject, however, to change thereafter in any manner provided by law or in the
Corporation's Restated Certificate of Incorporation, as amended, or By-Laws).
Any vacancies in the Board of Directors effected by the provisions of clauses
(y) and (z) in the preceding sentence may be filled by a majority of the
remaining Directors.
(D) Except as set forth herein, or as otherwise provided by law,
holders of Series B Junior Participating Preferred Stock shall have no special
voting rights and their consent shall not be required (except to the extent they
are entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
Section 4. Certain Restrictions.
(A) Whenever quarterly dividends or other dividends or distributions
payable on the Series B Junior Participating Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid dividends
and distributions, whether or not declared, on shares of Series B Junior
Participating Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends on or make any other distributions
on any shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series B Junior Participating
Preferred Stock;
(ii) declare or pay dividends on or make any other distributions
on any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series B Junior Participating
Preferred Stock, except dividends paid ratably on the Series B Junior
Participating Preferred Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total amounts to which the holders of
all such shares and then entitled;
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(iii) redeem, purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Junior Participating Preferred Stock,
provided that the Corporation may at any time redeem, purchase or otherwise
acquire shares of any such junior stock in exchange for shares of any stock of
the Corporation ranking junior (either as to dividends or upon dissolution,
liquidation or winding up) to the Series B Junior Participating Preferred Stock
or with the consent of the Board of Directors, redeem shares from employees upon
their termination of employment;
(iv) purchase or otherwise acquire for consideration any shares
of Series B Junior Participating Preferred Stock, or any shares of stock ranking
on a parity with the Series B Junior Participating Preferred Stock, except in
accordance with a purchase offer made in writing or by publication (as
determined by the Board of Directors) to all holders of such shares upon such
terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
series and classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Series B Junior Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of a new series
of Preferred Stock to be created by resolution or resolutions of the Board of
Directors, subject to the conditions and restrictions on issuance set forth
herein.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any liquidation
(voluntary or otherwise), dissolution or winding up of the Corporation, no
distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the
Series B Junior Participating Preferred Stock unless, prior thereto, the holders
of shares of Series B Junior Participating Preferred Stock shall have received
$100 per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not declared, to the date of such payment (the
"Series B Liquidation Preference"). Following the payment of the full amount of
the Series B Liquidation Preference, no additional distributions shall be made
to the holders of shares of Series B Junior Participating Preferred Stock
unless, prior thereto, the holders of shares of Common Stock shall have received
an amount per share (the "Common Adjustment") equal to the quotient obtained by
dividing (i) the Series B Liquidation Preference by (ii) 100 (as appropriately
adjusted as set forth in subparagraph C below to reflect such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock)
(such number in clause (ii), the "Adjustment Number"). Following the payment of
the full amount of the Series B Liquidation Preference and the Common Adjustment
in respect of all outstanding shares of Series B Junior Participating Preferred
Stock and Common Stock, respectively, holders of Series B Junior Participating
Preferred Stock and holders of
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shares of Common Stock shall receive their ratable and proportionate share of
the remaining assets to be distributed in the ratio of the Adjustment Number to
1 with respect to such Preferred Stock and Common Stock, on a per share basis,
respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Series B Liquidation Preference and
the liquidation preferences of all other series of Preferred Stock, if any,
which rank on a parity with the Series B Junior Participating Preferred Stock,
then such remaining assets shall be distributed ratably to the holders of such
parity shares in proportion to their respective liquidation preferences. In the
event, however, that there are not sufficient assets available to permit payment
in full of the Common Adjustment, then such remaining assets shall be
distributed ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the Adjustment Number in effect immediately prior to such event shall
be adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
(D) Neither the consolidation, merger or other business combination
of the Corporation with or into any other corporation the sale, lease, exchange
or conveyance of all or any part of the property, assets or business of the
Corporation shall be deemed to be a liquidation, dissolution or winding up of
the Corporation for purposes of this Section 6.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter
into any consolidation, merger, combination or other transaction in which the
shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case the shares of
Series B Junior Participating Preferred Stock shall at the same time be
similarly exchanged or changed in an amount per share (subject to the provision
for adjustment hereinafter set forth) equal to 100 times the aggregate amount of
stock, securities, cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is changed or
exchanged. In the event the Corporation shall at any time declare or pay any
dividend on Common Stock payable in shares of Common Stock, or effect a
subdivision, combination or consolidation of the outstanding Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common Stock, then in each
such case the amount set forth in the preceding sentence with respect to the
exchange or change of shares of Series B Junior Participating Preferred Stock
shall be adjusted by multiplying such amount by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that
were outstanding immediately prior to such event.
A-6
Section 8. No Redemption. The shares of Series B Junior Participating
Preferred Stock shall not be redeemable.
Section 9. Ranking. The Series B Junior Participating Preferred Stock shall
rank junior to all other series of the Corporation's Preferred Stock as to the
payment of dividends and the distribution of assets, unless the terms of any
such series shall provide otherwise.
Section 10. Amendment. The Restated Certificate of Incorporation of the
Corporation, as amended, shall not be further amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series B Junior Participating Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least seventy-five percent
(75%) of the outstanding shares of Series B Junior Participating Preferred
Stock, voting together as a single class.
Section 11. Fractional Shares. Series B Junior Participating Preferred
Stock may be issued in fractions of a share which shall entitle the holder, in
proportion to such holders fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit of all other
rights of holders of Series B Junior Participating Preferred Stock.
A-7
EXHIBIT B
[FORM OF RIGHTS CERTIFICATE]
Certificate No. R- _________ Rights
NOT EXERCISABLE AFTER JANUARY 11, 2012 OR EARLIER IF REDEEMED BY THE
COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$0.01 PER RIGHT, ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE
OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE MAY BE OR MAY HAVE BEEN
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE
RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS
REPRESENTED HEREBY MAY BE OR BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED
IN SECTION 7(e) OF SUCH AGREEMENT.
Rights Certificate
ONLINE RESOURCES CORPORATION
This Rights Certificate certifies that ____________________, or registered
assigns, is the registered holder of the number of Rights set forth above, each
of which entitles the holder thereof, subject to the terms, provisions and
conditions of the Rights Agreement, dated as of January 11, 2002 (the "Rights
Agreement"), between Online Resources Corporation, a Delaware corporation (the
"Company"), and American Stock Transfer and Trust Company, a New Jersey limited
liability company (the "Rights Agent"), to purchase from the Company after the
Distribution Date (as such term is defined in the Rights Agreement) and at any
time prior to the Expiration Date (as such term is defined in the Rights
Agreement) at the office or offices of the Rights Agent designated for such
purpose, or its successors as Rights Agent, one one-hundredth of a fully paid,
non-assessable share of Series B Junior Participating Preferred Stock (the
"Preferred Stock") of the Company, at a purchase price of $115.00 per one
one-hundredth of a share (the "Purchase Price"), upon presentation and surrender
of this Rights Certificate with the Form of Election to Purchase and related
Certificate duly executed. The number of Rights evidenced by this Rights
Certificate (and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set forth above, are
the number and Purchase Price as of _____, 200_, based on the Preferred Stock as
constituted at such date. The Company reserves the right to require prior to the
occurrence of a Triggering Event (as such term is defined in the Rights
Agreement) that a number of Rights be exercised so that only whole shares of
Preferred Stock will be issued.
Capitalized terms used herein and not otherwise defined herein shall have
the meanings assigned to such terms in the Rights Agreement.
B-1
Upon the occurrence of a Section 11(a)(ii) Event, if the Rights evidenced
by this Rights Certificate are beneficially owned by (i) an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (ii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate of an Acquiring Person),
or (iii) under certain circumstances specified in the Rights Agreement, a
transferee of a person who, after such transfer, became an Acquiring Person (or
an Associate or Affiliate of an Acquiring Person), such Rights shall become null
and void and no holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number and
kind of shares of Preferred Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the happening of certain events, including
Triggering Events.
This Rights Certificate is subject to all of the terms, provisions and
conditions of the Rights Agreement, which terms, provisions and conditions are
hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are on file at the office of the Company and are
also available upon written request to the Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office or offices of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-hundredths of a share of Preferred
Stock as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced by
this Certificate may be redeemed by the Company at the option of the Board at a
redemption price of $0.01 per Right at any time prior to the earlier of (i) the
close of business on the tenth day following the Stock Acquisition Date (or, if
the Stock Acquisition Date shall have occurred prior to the Record Date, the
close of business on the tenth day following the Record Date), and (ii) the
Final Expiration Date. After the expiration of the redemption period, the
Company's right of redemption may be reinstated if an Acquiring Person reduces
his beneficial ownership to less than 15% of the outstanding shares of Common
Stock in a transaction or series of transactions not involving the Company.
No fractional shares of Preferred Stock will be issued upon the exercise of
any Right or Rights evidenced hereby (other than fractions which are
integral-multiples of one one-hundredth of a share of Preferred Stock), but in
lieu thereof a cash payment will be made, as provided in the Rights Agreement.
B-2
No holder of this Rights Certificate shall be entitled to vote or receive
dividends or be deemed for any purpose the holder of shares of Preferred Stock
or of any other securities of the Company which may at any time be issuable on
the exercise hereof, nor shall anything contained in the Rights Agreement or
herein be construed to confer upon the holder hereof, as such, any of the rights
of a stockholder of the Company or any right to vote for the election of
directors or upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to receive notice of
meetings or other actions affecting stockholders (except as provided in the
Rights Agreement), or to receive dividends or subscription rights, or otherwise,
until the Right or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed under its corporate seal by its authorized officers.
Dated:
ATTEST: ONLINE RESOURCES CORPORATION
By:
------------------------------- -------------------------------
Name:
Its: Its:
Countersigned:
AMERICAN STOCK TRANSFER AND TRUST COMPANY
By:
-------------------------------
Authorized Signature
B-3
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED
-------------------------------------------------------------
hereby sells, assigns and transfers unto
---------------------------------------
--------------------------------------------------------------------------------
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________ Attorney, to
transfer the within Rights Certificate on the books of the within-named Company,
with full power of substitution.
Dated:
-------------------------------
Signature
Signature Guaranteed:
B-4
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are defined in the
Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:
-------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
B-5
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: ONLINE RESOURCES CORPORATION:
The undersigned hereby irrevocably elects to exercise ______ Rights
represented by this Rights Certificate to purchase the shares or portion thereof
of Preferred Stock issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print name and address)
Dated:
-------------------------------
Signature Guaranteed:
B-6
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person or
an Affiliate or Associate of an Acquiring Person (as such terms are defined in
the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned, it [ ]
did [ ] did not acquire the Rights evidenced by this Rights Certificate from any
Person who is, was or subsequently became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person.
Dated:
-------------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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EXHIBIT C
ONLINE RESOURCES CORPORATION
(THE "COMPANY")
STOCKHOLDER RIGHTS PLAN
(THE "RIGHTS PLAN")
Summary of Rights
Distribution: The Board of Directors of the Company (the
"Board") declared a dividend distribution of one
Right for each share of Common Stock (the "Common
Stock") of the Company then outstanding. No
stockholder approval is required. Concurrently,
the Board authorized the establishment of a class
of Preferred Stock, $0.01 par value per share,
designated "Series B Junior Participating
Preferred Stock" (the "Series B Junior
Participating Preferred Stock"). Each Right has no
real economic value unless and until a person or
entity that seeks to acquire or obtain control of
the Company without first dealing with the Board
and obtaining its approval (a "Bidder") acquires
at least 15% of the Company's voting stock without
Board approval.
Rights: Each Right entitles the holder, at any time
following the Distribution Date (described below),
to purchase one one-hundredth of a share of Series
B Junior Participating Preferred Stock of the
Company at a purchase price of $115.00 per share,
subject to adjustment in certain circumstances
(the "Purchase Price"). The Purchase Price was
determined by the Board upon adoption of the
Rights Plan and reflects the value that the Board
believes the Common Stock will reach ten years
after the Rights Plan is put into effect. If each
Right has a high Purchase Price, each stockholder
will be able to buy a relatively large amount of
discounted Common Stock per Right; in other words,
the higher the Purchase Price relative to the
then-current market price, the greater the
dilution that will result to a potential Bidder in
the event the Rights are triggered.
Exercisability: Rights become exercisable after the Distribution
Date. The Rights, in all likelihood, would still
not be exercised by the holders after the
Distribution Date (since the Purchase Price would
still exceed the then current market price of the
Common Stock) unless and
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until a Flip-In Event or a Flip-Over Event has
occurred or does occur.
Transferability: Until the Distribution Date, the Rights are
attached to the certificates representing
outstanding shares of Common Stock and can only be
transferred in connection with the underlying
shares of Common Stock. After the Distribution
Date, the Rights separate from the Common Stock,
Rights Certificates are issued and the Rights are
separately tradable.
Distribution Date: The Distribution Date will be the earliest to
occur of the following:
(1) the tenth day following a public announcement
or disclosure that a person or entity, or group of
affiliated or associated persons and/or entities
(an "Acquiring Person"), has acquired beneficial
ownership of 15% or more of the Common Stock then
outstanding (the "Stock Acquisition Date"); or
(2) the tenth business day, or such specified
later date as determined by the Board, following
the commencement of, or the announcement of an
intention to make, a tender offer or exchange
offer for the Common Stock that would result in a
person or group becoming an Acquiring Person.
Flip-In Events: In the event, following any Distribution Date, (1)
any person or entity becomes an Acquiring Person,
except pursuant to an offer for all outstanding
shares that the Board determines to be fair to,
and otherwise in the best interests of, the
Company and its stockholders, (2) the Company is
the surviving corporation in a merger or
consolidation with an Acquiring Person and the
Common Stock is not changed or exchanged, (3) an
Acquiring Person engages in one or more
self-dealing transactions specified in the Rights
Agreement, or (4) during such time as there is an
Acquiring Person, an event occurs which results in
such Acquiring Person's proportionate ownership
interest being increased by more than 1% (e.g., a
reverse stock split) (collectively, "Flip-In
Events"), then ten days after the occurrence of a
Flip-In Event specified in (1) above, and
immediately upon the occurrence of a Flip-In Event
specified in (2), (3) or (4) above, each of the
Rights (other than Rights held by the Acquiring
Person, or its affiliates, associates and certain
transferees) becomes a Right to acquire that
number of shares of Common Stock having an
aggregate value (based on the average market price
over a 30 trading-day period prior to the Flip-In
Event) equal to twice the Right's Purchase Price
upon payment of the Purchase Price (but such Right
is not
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exercisable while the Rights are redeemable). In
sum, then, the Bidder's attainment of the status
of a non-board-approved owner of that level of
stock, irrespective of the Bidder's intentions
regarding the possible use of the stock, triggers
the poison pill so that all stockholders other
than the Bidder automatically acquire the right to
purchase additional voting stock of the Company at
a 50% discount to market price.
In lieu of issuing Common Stock, if the Board
determines that it is necessary or appropriate and
not contrary to the interests of the holders of
Rights (other than any Acquiring Person or its
affiliates or associates), the Company may
substitute value in the form of cash, or other
assets, or debt or equity securities, or a
reduction in the Purchase Price, or any
combination of the foregoing, in an aggregate
amount equal to the value of the Common Stock that
would otherwise be issuable.
Flip-Over Events: If, following the Stock Acquisition Date, the
Company is acquired in a merger or other business
combination (i.e., the Company does not survive or
the Common Stock is changed or exchanged), or more
than 50% of its assets or earning power (on a
consolidated basis) is sold or transferred in one
transaction or a series of related transactions
(together, "Flip-Over Events"), each Right becomes
a Right to acquire that number of shares of common
stock (or other equity securities) of the other
entity to the transaction having an aggregate
value equal to twice the Purchase Price. The
Rights Agreement prohibits the Company from
entering into any such transaction unless the
other party agrees to comply with the provisions
of the Rights Agreement.
Example of Effect An example of the dilutive effect of a rights plan
Of Rights Plan: is as follows. Assume a company with 20 million
shares outstanding has a rights plan with a
purchase price of $100 per right, and a market
price per share of common stock of $10 at the time
of a Flip-In Event, giving the company a market
capitalization at that time of $200 million. If a
Bidder were to trigger the rights issued under the
rights plan by purchasing 15 million shares in a
hostile tender offer and all the rights associated
with such shares for, let's say, a premium price
of $15 per share, or $225 million in the
aggregate, representing 75% of the company's
outstanding common stock, the remaining
stockholders would still hold 5 million shares and
5 million rights (one for each share of common
stock not purchased by the Bidder). Each right
would entitle them to buy $100 worth of common
stock at half the market price, or $5 per share.
This means that the remaining stockholders would
have the right to purchase $500 million of common
stock ($100 purchase price times 5 million rights)
at $5 per share, or approximately 100
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million shares of common stock. If all the rights
were exercised, the economic dilution to the
Bidder would be $50 million, and its percentage
ownership in the Company would drop from
approximately 75% to 13%, notwithstanding the very
substantial aggregate purchase price of $225
million paid by the Bidder for the Bidder's
shares, which do not then represent even a
majority interest in the company. The existence of
such a rights plan, with an appropriately high
purchase price associated with each right relative
to the then-current market price per share would
have such a draconian dilutive effect on even a
"successful" Bidder, therefore makes it uneconomic
and very unwise to complete a takeover bid that
would trigger the rights.
Exchange of the Rights: At any time after a person becomes an Acquiring
Person and prior to the acquisition by such person
of 50% or more of the Company's outstanding Common
Stock, the board may exchange the Rights, in whole
or in part, for Common Stock of the Company at an
exchange ratio of one share of Common Stock per
Right, subject to adjustment.
Exclusion of Acquiror: Rights held by an Acquiring Person and certain
related persons are voided after a Flip-In Event
but (if no Flip-In Event has occurred) not after a
Flip-Over Event.
Redemption: At any time prior to ten days following the Stock
Acquisition Date, the Board may redeem the Rights
in whole, but not in part, at a price of $.01 per
Right (the "Redemption Price"). After such
redemption period has expired, the Company's right
of redemption may be reinstated by the Board if
either (i) an Acquiring Person reduces its
beneficial ownership to less than 15% of the
outstanding shares of Common Stock in a
transaction or series of transactions not
involving the Company, or (ii) the Board approves
the merger of the Company with, or acquisition of
the Company by, a person or entity unrelated to
the Acquiring Person. The redemption price is
payable in cash, stock or other consideration
deemed appropriate by the Board.
Amendment: In general, the provisions of the Rights Agreement
may be amended by the Board (1) prior to the
Distribution Date in any manner (including to
shorten or lengthen any time period such as the
redemption period), and (2) from or after the
Distribution Date in certain respects, including
to cure any ambiguity, defect or inconsistency, to
make changes which do not adversely affect the
interests of holders of Rights (excluding the
interests of any Acquiring Person), or to shorten
or lengthen any time period under the Rights
Agreement. Certain basic economic terms may not be
amended at any time (e.g., Purchase Price,
Redemption Price), and
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amendments extending the redemption period must be
made while Rights are still redeemable (i.e.,
initially within ten days after the Stock
Acquisition Date).
Voting Rights: Rights holders have no rights as stockholders of
the Company, including the right to vote and to
receive dividends.
Expiration: The Rights will expire in ten years unless earlier
redeemed by the Company.
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