Exhibit 4.1
CAI WIRELESS SYSTEMS, INC.
and
ChaseMellon Shareholder Services, L.L.C.
as Rights Agent
RIGHTS AGREEMENT
DATED AS OF APRIL 16, 1999
TABLE OF CONTENTS
PAGE
Section 1. Certain Definitions 1
Section 2. Appointment of Rights Agent 9
Section 3. Issue of Right Certificates 9
Section 4. Form of Right Certificates 12
Section 5. Countersignature and Registration 13
Section 6. Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates 14
Section 7. Exercise of Rights, Purchase Price; Expiration
Date of Rights 16
Section 8. Cancellation and Destruction of Right
Certificates 19
Section 9. Availability of Shares of Preferred Stock 19
Section 10. Preferred Stock Record Date 22
Section 11. Adjustment of Purchase Price, Number of Shares
and Number of Rights 23
Section 12. Certificate of Adjusted Purchase Price or
Number of Shares 41
Section 13. Consolidation, Merger or Sale or Transfer of
Assets or Earnings Power 41
Section 14. Fractional Rights and Fractional Shares 49
Section 15. Rights of Action 51
Section 16. Agreement of Right Holders 53
Section 17. Right Certificate Holder Not Deemed a
Shareholder 53
Section 18. Concerning the Rights Agent 54
Section 19. Merger or Consolidation or Change of Name of
Rights Agent 55
Section 20. Rights and Duties of Rights Agent 57
Section 21. Change of Rights Agent 61
Section 22. Issuance of New Right Certificates 63
Section 23. Redemption 63
Section 24. Exchange 65
Section 25. Notice of Certain Events 68
Section 26. Notices 69
Section 27. Supplements and Amendments 70
Section 28. Successors 71
Section 29. Benefits of this Agreement 71
Section 30. Determinations and actions by the Board of
Directors of the Company 72
Section 31. Severability 72
Section 32. Governing Law 73
Section 33. Counterparts 73
Section 34. Descriptive Headings 73
RIGHTS AGREEMENT
Agreement dated as of April 16, 1999 between CAI Wireless Systems,
Inc., a Connecticut corporation (the "Company"), and ChaseMellon
Shareholder Services, L.L.C. (the "Rights Agent").
The Board of Directors of the Company has authorized and declared a
dividend of one preferred share purchase right (a "Right") for each share
of Common Stock (as hereinafter defined) of the Company outstanding as of
the close of business (as defined below) on April 27, 1999 (the "Record
Date"), each Right representing the right to purchase one one-hundredth
(subject to adjustment as provided herein) of a share of Preferred Stock
(as hereinafter defined), upon the terms and subject to the conditions
herein set forth, and the Board of Directors of the Company has further
authorized and directed the issuance of one Right (subject to adjustment
as provided herein) with respect to each share of Common Stock that shall
become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date (as
such terms are hereinafter defined); PROVIDED, HOWEVER, that Rights may
be issued with respect to shares of Common Stock that shall become
outstanding after the Distribution Date and prior to the earlier of the
Redemption Date and the Final Expiration Date in accordance with Section
22.
Accordingly, 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 meaning indicated:
(a) "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which shall be the Beneficial Owner (as such
term is hereinafter defined) of 15% or more of the shares of Common Stock
then outstanding, but shall not include an Exempt Person (as such term is
hereinafter defined); PROVIDED, HOWEVER, that if the Board of Directors
of the Company determines in good faith that a Person who would otherwise
be an "Acquiring Person" has become such inadvertently (including,
without limitation, because (i) such Person was unaware that it
Beneficially Owned a percentage of Common Stock that would otherwise
cause such Person to be a "Acquiring Person" or (ii) such Person was
aware of the extent of its Beneficial Ownership of Common Stock but had
no actual knowledge of the consequences of such Beneficial Ownership
under this Rights Agreement) and without any intention of changing or
influencing control of the Company, and such Person, as promptly as
practicable after being advised of such determination divested or divests
itself of Beneficial Ownership of a sufficient number of shares of Common
Stock so that such Person would no longer be an Acquiring Person, then
such Person shall not be deemed to be or to have become an "Acquiring
Person" for any purposes of this Agreement. No Person shall become an
"Acquiring Person" as the result of an acquisition of shares 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 shares of Common Stock then outstanding,
PROVIDED, HOWEVER, that if a Person shall become the Beneficial Owner of
15% or more of the shares of Common Stock then outstanding by reason of
such share acquisitions by the Company and thereafter become the
Beneficial Owner of any additional shares of Common Stock (other than
pursuant to a dividend or distribution paid or made by the Company on the
outstanding Common Stock in shares of Common Stock or pursuant to a split
or subdivision of the outstanding Common Stock), then such Person shall
be deemed to be an "Acquiring Person" unless upon the consummation of the
acquisition of such additional shares of Common Stock such Person does
not own 15% or more of the shares of Common Stock then outstanding. For
all purposes of this Agreement, any calculation of the number of shares
of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding
shares of Common Stock of which any Person is the Beneficial Owner, shall
be made in accordance with the last sentence of Rule 13d-3 (d) (1) (i) of
the General Rules and Regulations under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as in effect on the date of this
Agreement. Notwithstanding anything to the contrary in this Agreement,
neither MCI WORLDCOM, Inc. nor any Affiliate or Associate of MCI
WORLDCOM, Inc. (including without limitation an acquisition subsidiary),
nor any of their assignees or transferees shall become or be deemed to be
an "Acquiring Person" by virtue of (1) the execution and delivery of a
Merger Agreement (as hereinafter defined) or the public announcement of
such execution and delivery, (2) the consummation of a Merger (as
hereinafter defined) or the other transactions contemplated in a Merger
Agreement, (3) the execution and delivery of any Purchase Agreement (as
hereinafter defined) or the public announcement of such execution and
delivery, or (4) the consummation of the transactions contemplated in any
Purchase Agreement.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act as in effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, shall be
deemed to have "Beneficial Ownership" of and shall be deemed to
"Beneficially Own" any securities:
(i) which such Person or any of such Person's Affiliates or
Associates is deemed to beneficially own, directly or indirectly
within the meaning of Rule 13d-3 of the General Rules and
Regulations under the Exchange Act as in effect on the date of this
Agreement;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant
to any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members
with respect to a bona fide public offering of securities), or upon
the exercise of conversion rights, exchange rights, rights, warrants
or options, or otherwise; PROVIDED, HOWEVER, that a Person shall not
be deemed the Beneficial Owner of, or to Beneficially Own, (x)
securities tendered pursuant to a tender or exchange offer made by
or on behalf of such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for purchase
or exchange, (y) securities which such Person has a right to acquire
on the exercise of Rights at any time prior to the time a Person
becomes an Acquiring Person or (z) securities issuable upon exercise
of Rights from and after the time a Person becomes an Acquiring
Person if such 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 ("original Rights") or
pursuant to Section 11(i) or Section 11(n) with respect to an
adjustment to original Rights; or (B) the right to vote pursuant to
any agreement, arrangement or understanding; PROVIDED, HOWEVER, that
a Person shall not be deemed the Beneficial Owner of, or to
Beneficially Own, any security by reason of such agreement,
arrangement or understanding if the agreement, arrangement or
understanding to vote such security (1) arises solely from a
revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations promulgated
under the Exchange Act and (2) is not also then reportable on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(iii) which are Beneficially Owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide
public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to
Section 1 (c) (ii) (B)) or disposing of any securities of the
Company.
(d) "Business Day" shall mean any day other than a Saturday, a
Sunday, or a day on which banking institutions in the State of
Connecticut, the State of New Jersey, or the State in which the principal
office of the Rights Agent is located, are authorized or obligated by law
or executive order to close.
(e) "close of business" on any given date shall mean 5:00 P.M., New
Jersey time, on such date; PROVIDED, HOWEVER, that if such date is not a
Business Day it shall mean 5:00 P.M., New Jersey time, on the next
succeeding Business Day.
(f) "Common Stock" when used with reference to the Company shall
mean the common stock, $.01 par value, of the Company or, if such common
stock shall have been converted into or exchanged for other securities,
such other securities. "Common Stock" when used with reference to any
Person other than the Company shall mean the capital stock (or, in the
case of an unincorporated entity, the equivalent equity interest) with
the greatest voting power of such other Person or, if such other Person
is a subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person.
(g) "Distribution Date" shall have the meaning set forth in Section
3 hereof.
(h) "equivalent preferred shares" shall have the meaning set forth
in Section 11(b) hereof.
(i) "Exempt Person" shall mean the Company, any Subsidiary (as such
term is hereinafter defined) of the Company, in each case including,
without limitation, in its fiduciary capacity, any employee benefit plan
of the Company or of any Subsidiary of the Company, any Person holding
Common Stock for or pursuant to the terms of any such plan or for the
purpose of funding any such plan or funding other employee benefits for
employees of the Company or of any Subsidiary of the Company, MCI
WORLDCOM, Inc. and its Affiliates and Associates, any Person who was the
Beneficial Owner, on April 16, 1999 (the "Grandfather Date") of 15% or
more of the shares of Common Stock on the Grandfather Date, and such
Person's Affiliates and Associates, including without limitation MCI
WORLDCOM, Inc. and its Affiliates and Associates, or any Person who
acquires all of such shares of Common Stock from an Exempt Person,
including without limitation, MCI WORLDCOM, Inc. and its Affiliates or
Associates.
(j) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(k) "Merger" shall mean a merger, consolidation, share exchange,
business combination, recapitalization, or similar transaction involving
the Company and MCI WORLDCOM, Inc. or any of its Affiliates or
Associates.
(l) "Merger Agreement" shall mean an agreement and plan of merger
or other form of acquisition agreement to which the Company and MCI
WORLDCOM, Inc. or any of its Affiliates or Associates are parties, as
such may be amended or supplemented from time to time.
(m) "Nasdaq" shall mean The Nasdaq Stock Market, Inc.
(n) "Person" shall mean any individual, firm, corporation,
partnership, limited liability company, trust, or other entity, and shall
include any successor (by merger or otherwise) of any such individual,
firm, corporation, partnership, limited liability company, trust or
entity.
(o) "Preferred Stock" shall mean the Series A Preferred Stock, $.01
par value, of the Company having the rights and preferences set forth in
the Form of Certificate of Amendment of Certificate of Incorporation
attached to this Agreement as Exhibit A.
(p) "Purchase Agreement" shall mean any purchase and sale or
similar agreement pursuant to which MCI WORLDCOM, Inc. or any of its
Affiliates or Associates has or acquires the right to acquire shares of
Common Stock.
(q) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(r) "Securities Act" shall mean the Securities Act of 1933, as
amended.
(s) "Stock Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition, shall include,
without limitation, a report filed pursuant to Section 13(d) of the
Exchange Act) by the Company or an Acquiring Person that an Acquiring
Person has become such or such earlier date as a majority of the Board of
Directors of the Company shall become aware of the existence of an
Acquiring Person.
(t) "Subsidiary" of any Person shall mean any Person of which
securities or other ownership interests having ordinary voting power
sufficient to elect a majority of the board of directors or other persons
performing similar functions are Beneficially Owned, directly or
indirectly, by such Person, and any Person that is otherwise controlled
by such Person.
Section 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby
appoints the Rights Agent to act as agent for the Company in accordance
with the terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Company may from time to time appoint such co-
Rights Agents as it may deem necessary or desirable, upon ten (10) days=
prior written notice to the Rights Agent. The Rights Agent shall have no
duty to supervise, and shall in no event be liable for, the acts or
omissions of any such co-Rights Agent.
Section 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of the close of business on (i) the tenth day
after the Stock Acquisition Date or (ii) the tenth Business Day (or such
later date as may be determined by action of the Board of Directors of
the Company prior to such time as any Person becomes an Acquiring Person)
after the date of the commencement by any Person (other than an Exempt
Person) of, or the first public announcement of the intention of such
Person (other than an Exempt Person) to commence, a tender or exchange
offer the consummation of which would result in any Person (other than an
Exempt Person) becoming the Beneficial Owner of shares of Common Stock
aggregating 15% or more of the Common Stock then outstanding (including
in either such case any such date which is after the date of this
Agreement and prior to the issuance of the Rights), the later of the
dates specified in (A) or (B) above being herein referred to as the
"Distribution Date", (x) the Rights will be evidenced (subject to the
provisions of Section 3(b) hereof) by the certificates for Common Stock
registered in the names of the holders thereof and not by separate Right
Certificates, and (y) the Rights will be transferable only in connection
with the transfer of Common Stock. Notwithstanding anything to the
contrary in this Section 3(a), a Distribution Date shall not occur as a
result of (1) the execution and delivery of a Merger Agreement or the
public announcement of such execution and delivery, (2) the consummation
of a Merger or the other transactions contemplated in a Merger Agreement,
(3) the execution and delivery of any Purchase Agreement or the public
announcement of such execution and delivery, or (4) the consummation of
the transactions contemplated in any Purchase Agreement. As soon as
practicable after the Distribution Date, the Company will prepare and
execute, the Rights Agent will countersign, and the Company will send or
cause to be sent (and the Rights Agent will, if requested and provided
with all necessary information, send) by first-class, insured, postage-
prepaid mail, to each record holder of Common Stock as of the close of
business on the Distribution Date (other than any Person which the
Company has notified the Rights Agent is an Acquiring Person or any
Associate or Affiliate of an Acquiring Person), at the address of such
holder shown on the records of the Company, a Right Certificate, in
substantially the form of Exhibit B hereto (a "Right Certificate"),
evidencing one Right (subject to adjustment as provided herein) for each
share of Common Stock so held. As of the Distribution Date, the Rights
will be evidenced solely by such Right Certificates and will be
transferable only separately from the transfer of Common Stock.
The Company shall promptly notify the Rights Agent in writing upon
the occurrence of the Distribution Date and, if such notification is
given orally, the Company shall confirm same in writing on or prior to
the Business Day next following. Until such notice is received by the
Rights Agent, the Rights Agent may presume conclusively for all purposes
that the Distribution Date has not occurred.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Rights to Purchase Shares of
Preferred Stock, in substantially the form of Exhibit C hereto (the
"Summary of Rights"), by first-class, postage-prepaid mail, to each
record holder of Common Stock as of the close of business on the Record
Date (other than any Acquiring Person or any Associate or Affiliate of
any Acquiring Person), at the address of such holder shown on the records
of the Company. With respect to certificates for Common Stock
outstanding as of the Record Date, until the Distribution Date the Rights
will be evidenced by such certificates registered in the names of the
holders thereof together with the Summary of Rights. Until the
Distribution Date (or the earlier of the Redemption Date or the Final
Expiration Date), the surrender for transfer of any certificate for
Common Stock outstanding on the Record Date, with or without a copy of
the Summary of Rights, shall also constitute the transfer of the Rights
associated with the Common Stock represented thereby.
Certificates issued for Common Stock (including, without limitation,
upon transfer of outstanding Common Stock or issuance or reissuance of
Common Stock out of authorized but unissued shares) after the Record Date
but prior to the earliest of the Distribution Date, the Redemption Date
or the Final Expiration Date shall have impressed on, printed on, written
on or otherwise affixed to them a legend substantially to the following
effect:
This certificate also evidences and entitles the holder hereof
to certain rights as set forth in a Rights Agreement between
CAI Wireless Systems, Inc. (the "Company") and ChaseMellon
Shareholder Services, L.L.C. dated as of April 16, 1999 as the
same may be amended from time to time (the "Rights Agreement"),
the terms of which are hereby incorporated herein by reference
and a copy of which is on file at the principal executive
offices of the Company. Under certain circumstances, as set
forth in the Rights Agreement, such Rights will be evidenced by
separate certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. UNDER CERTAIN
CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT, RIGHTS
OWNED BY OR TRANSFERRED TO ANY PERSON WHO BECOMES AN ACQUIRING
PERSON (AS DEFINED IN THE RIGHTS AGREEMENT) AND CERTAIN
TRANSFEREES THEREOF WILL BECOME NULL AND VOID AND WILL NO
LONGER BE TRANSFERABLE.
With respect to such certificates containing the foregoing legend, until
the Distribution Date, the Rights associated with the Common Stock
represented by such certificates shall be evidenced by such certificates
alone, and the surrender for transfer of any such certificate, except as
otherwise provided herein, shall also constitute the transfer of the
Rights associated with the Common Stock represented thereby. In the
event that the Company purchases or otherwise acquires any Common Stock
after the Record Date but prior to the Distribution Date, any Rights
associated with such Common Stock shall be deemed cancelled and retired
so that the Company shall not be entitled to exercise any Rights
associated with the Common Stock which are no longer outstanding.
Notwithstanding this paragraph (c), the omission of a legend shall
not affect the enforceability of any part of this Agreement or the rights
of any holder of the Rights.
Section 4. FORM OF RIGHT CERTIFICATES. The Right Certificates (and
the forms of election to purchase shares and of assignment to be printed
on the reverse thereof) shall 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 (which do not affect the duties or
responsibilities of the Rights Agent) and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply with
any applicable law or with any rule or regulation made pursuant thereto
or with any rule or regulation of Nasdaq or of any stock exchange or
other automated quotation system on which the Rights may from time to
time be listed, or to conform to usage. Subject to the provisions of
Sections 11, 13 and 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of one one-hundredths of a share
of Preferred Stock as shall be set forth therein at the price per one
one-hundredth of a share of Preferred Stock set forth therein (the
"Purchase Price"), but the number of such one one-hundredths of a share
of Preferred Stock and the Purchase Price shall be subject to adjustment
as provided herein.
Section 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the
Company by the Chairman of the Board of Directors of the Company, the
President, any of the Vice Presidents, the Treasurer or the Controller of
the Company, either manually or by facsimile signature, shall have
affixed thereto the Company's seal or a facsimile thereof, and shall be
attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Right Certificates shall
be manually countersigned by the Rights Agent and shall not be valid for
any purpose unless countersigned. In case any officer of the Company who
shall have signed any of the Right Certificates shall cease to be such
officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates,
nevertheless, may be countersigned by the Rights Agent and issued and
delivered by the Company with the same force and effect as though the
Person who signed such Right Certificates had not ceased to be such
officer of the Company; and any Right Certificate may be signed on behalf
of the Company by any Person who, at the actual date of the execution of
such Right Certificate, shall be a proper officer of the Company to sign
such Right Certificate, although at the date of the execution of this
Agreement any such Person was not such an officer.
(b) Following the Distribution Date and receipt by the Rights Agent
of notice to that effect and all other necessary information referred to
in Section 3(a), the Rights Agent will keep or cause to be kept, at an
office or agency designated for such purpose, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall
show the names and addresses of the respective holders of the Right
Certificates, the number of Rights evidenced on its face by each of the
Right Certificates and the date of each of the Right Certificates.
Section 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT
CERTIFICATES; MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 7(e), 11(a) (ii) and 14
hereof, at any time after the close of business on the Distribution Date,
and prior to the close of business on the earlier of the Redemption Date
or the Final Expiration Date, any Right Certificate or Right Certificates
(other than Right Certificates representing Rights that have become null
and void pursuant to Section 11(a) (ii) hereof or that have been
exchanged pursuant to Section 24 hereof) may be transferred, split up,
combined or exchanged for another Right Certificate or Right
Certificates, entitling the registered holder to purchase a like number
of one one-hundredths of a share of Preferred Stock as the Right
Certificate or Right Certificates surrendered then entitled such holder
to purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Right Certificate or Right Certificates shall
make such request in writing delivered to the Rights Agent, and shall
surrender the Right Certificate or Right Certificates to be transferred,
split up, combined or exchanged at the office or agency of the Rights
Agent designated for such purpose. The Right Certificates are
transferable only on the registry books of the Rights Agent. Neither the
Rights Agent nor the Company shall be obligated to take any action
whatsoever with respect to the transfer of any such surrendered Right
Certificate or Certificates until the registered holder thereof shall
have (i) completed and signed the certificate contained in the form of
assignment set forth on the reverse side of each such Right Certificate,
(ii) provided such additional evidence of the identity of the Beneficial
Owner (or former Beneficial Owner) thereof and of the Rights evidenced
thereby and the Affiliates and Associates of such Beneficial Owner (or
former Beneficial Owner) as the Company or the Rights Agent shall
reasonably request, and (iii) paid a sum sufficient to cover any tax or
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates as required by Section 9(e)
hereof. Thereupon the Rights Agent shall countersign and deliver to the
Person entitled thereto a Right Certificate or Right Certificates, as the
case may be, as so requested. The Rights Agent shall promptly forward
any such sum collected by it to the Company or such Persons as the
Company shall specify by written notice. The Rights Agent shall have no
duty or obligation under this Section unless and until it is satisfied
that all such taxes and charges have been paid.
(b) Subject to the provisions of Section 11(a) (ii) hereof, at
any time after the Distribution Date and prior to the close of business
on the earlier of the Redemption Date or the Final Expiration Date, upon
receipt by the Company and the Rights Agent of evidence satisfactory to
them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered holder in lieu of the
Right Certificate so lost, stolen, destroyed or mutilated.
Section 7. EXERCISE OF RIGHTS, PURCHASE PRICE; EXPIRATION DATE OF
RIGHTS.
(a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered
holder of any Right Certificate may, subject to Section 11(a) (ii) hereof
and except as otherwise provided herein, exercise the Rights evidenced
thereby in whole or in part upon surrender of the Right Certificate, with
the form of election to purchase on the reverse side thereof duly
executed, to the Rights Agent at the office or agency of the Rights Agent
designated for such purpose, together with payment of the Purchase Price
for each one one-hundredth of a share of Preferred Stock as to which the
Rights are exercised and an amount equal to any tax or charge required to
be paid under Section 9(e) hereof by certified check, cashier's check,
bank draft or money order payable to the order of the Company, at any
time which is both after the Distribution Date and prior to the earliest
of (i) the close of business on April 15, 2009 (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 such
Rights are exchanged as provided in Section 24 hereof and (iv) the
consummation of a Merger.
(b) The Purchase Price shall be initially $96.00 for each one one-
hundredth of a share of Preferred Stock purchasable upon the exercise of
a Right. The Purchase Price and the number of one one-hundredths of a
share of Preferred Stock or other securities or property to be acquired
upon exercise of a Right shall be subject to adjustment from time to time
as provided in Sections 11 and 13 hereof and shall be payable in lawful
money of the United States of America in accordance with paragraph (c) of
this Section 7.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase
Price for the shares of Preferred Stock to be purchased and an amount
equal to any applicable transfer tax or charge required to be paid by the
holder of such Right Certificate in accordance with Section 9 hereof; in
cash or by certified check, cashier's check or money order payable to the
order of the Company, the Rights Agent shall thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Stock certificates
for the number of shares of Preferred Stock to be purchased and the
Company hereby irrevocably authorizes each such transfer agent to comply
with all such requests, or (B) requisition from any depositary agent
depositary receipts representing interests in such number of one one-
hundredths of a share of Preferred Stock as are to be purchased (in which
case certificates for the Preferred Stock represented by such receipts
shall be deposited by the transfer agents with such depositary agent) and
the Company hereby directs each such depositary agent to comply with such
request, (ii) when appropriate, requisition from the Company the amount
of cash to be paid in lieu of issuance of fractional shares in accordance
with Section 14 hereof, (iii) promptly after receipt of such certificates
or depositary receipts, cause the same to be delivered to or upon the
order of the registered holder of such Right Certificate, registered in
such name or names as may be designated by such holder and (iv) when
appropriate, after receipt, promptly deliver such cash to or upon the
order of the registered holder of such Right Certificate.
(d) Except as otherwise provided herein, in case the registered
holder of any Right Certificate shall exercise less than all the Rights
evidenced thereby, a new Right Certificate evidencing Rights equivalent
to the exercisable Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Section 14 hereof.
(e) 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 of Rights upon the
occurrence of any purported transfer or exercise of Rights pursuant to
Section 6 hereof or this Section 7 unless such registered holder shall
have (i) duly completed and signed the certificate contained in the form
of assignment or election to purchase set forth on the reverse side of
the Rights Certificate surrendered for such transfer or exercise and (ii)
provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) thereof and of the Rights evidenced thereby
and of the Affiliates and Associates of such Beneficial Owner (or former
Beneficial Owner) as the Company or the Rights Agent shall reasonably
request.
Section 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES. All
Right Certificates surrendered for the purpose of exercise, transfer,
split up, combination or exchange shall, if surrendered to the Company or
to any of its agents, be delivered to the Rights Agent for cancellation
or in cancelled form, or, if surrendered to the Rights Agent, shall be
cancelled by it, and no Right Certificates shall be issued in lieu
thereof except as expressly permitted by any of the provisions of this
Agreement. The Company shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Right Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company, or shall, at the written
request of the Company, destroy such cancelled Right Certificates, and in
such case shall deliver a certificate of destruction thereof to the
Company.
Section 9. AVAILABILITY OF SHARES OF PREFERRED 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 or any shares of Preferred Stock held in its treasury,
the number of shares of Preferred Stock that 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
time that a Person becomes an Acquiring Person, shares of Common Stock
and other securities) issuable upon the exercise of Rights may be listed
or admitted to trading on Nasdaq or listed on any national securities
exchange or other quotation system, the Company shall use its best
efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed or
admitted to trading on Nasdaq or listed on any national securities
exchange or other quotation system upon official notice of issuance upon
such exercise.
(c) From and after such time as the Rights become exercisable, the
Company shall use its best efforts, if then necessary to permit the
issuance of shares of Preferred Stock (and following the time that a
Person first becomes an Acquiring Person, shares of Common Stock and
other securities) upon the exercise of Rights, to register and qualify
such shares of Preferred Stock (and following the time that a Person
first becomes an Acquiring Person, shares of Common Stock and other
securities) under the Securities Act and any applicable state securities
or "Blue Sky" laws (to the extent exemptions therefrom are not
available), cause such registration and qualifications to become
effective as soon as possible after filings in connection therewith and
keep such registration and qualifications effective until the earlier of
the date as of which the Rights are no longer exercisable for such
securities and the Final Expiration Date. The Company may temporarily
suspend, for a period of time not to exceed 90 days, the exercisability
of the Rights in order to prepare and file a registration statement under
the Securities Act and permit it to become effective. Upon 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. The Company shall notify the Rights Agent whenever it makes a
public announcement pursuant to this Section 9(c) and give the Rights
Agent a copy of such announcement. Notwithstanding any provision of this
Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction
shall have been obtained and until a registration statement under the
Securities Act (if required) shall have been declared effective.
(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all shares of Preferred Stock
(and, following the time that a Person becomes an Acquiring Person,
shares of Common Stock and other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates therefor
(subject to payment of the Purchase Price and compliance with any other
applicable provisions of this Agreement), be duly and validly authorized
and issued and fully paid and nonassessable shares.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all taxes and charges which may be payable in
respect of the issuance or delivery of the Right Certificates or of any
shares of Preferred Stock (or shares of Common Stock or other securities)
upon the exercise of Rights. The Company shall not, however, be required
to pay any tax or charge which may be payable in respect of any transfer
or delivery of Right Certificates to a Person other than, or the issuance
or delivery of certificates or depositary receipts for the Preferred
Stock (or shares of Common Stock or other securities) in a name other
than that of, the registered holder of the Right Certificate evidencing
Rights surrendered for exercise or to issue or deliver any certificates
or depositary receipts for Preferred Stock (or shares of Common Stock or
other securities) upon the exercise of any Rights until any such tax or
charge shall have been paid (any such tax or charge being payable by that
holder of such Right Certificate at the time of surrender) or until it
has been established to the Company's and the Right's Agent's
satisfaction that no such tax or charge is due.
Section 10. PREFERRED STOCK RECORD DATE. Each Person in whose name
any certificate for Preferred Stock is issued upon the exercise of Rights
shall for all purposes be deemed to have become the holder of record of
the shares of Preferred Stock represented thereby on, and such
certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase
Price (and any applicable taxes or charges) was made; PROVIDED, HOWEVER,
that if the date of such surrender and payment is a date upon which the
Preferred Stock transfer books of the Company are closed, such Person
shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day on
which the Preferred Stock transfer books of the Company are open. Prior
to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a holder of Preferred
Stock for which the Rights shall be exercisable, including, without
limitation, the right to vote or to receive dividends or other
distributions, 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 OF SHARES AND
NUMBER OF RIGHTS. The Purchase Price, the number of shares of Preferred
Stock or other securities or property purchasable upon exercise of each
Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the
date of this Agreement (A) declare a dividend on the Preferred
Stock payable in shares of Preferred Stock, (B) subdivide the
outstanding Preferred Stock, (C) combine the outstanding
Preferred Stock into a smaller number of shares of Preferred
Stock or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including without
limitation any such reclassification in connection with a
consolidation or merger in which the Company is the continuing
or surviving corporation), except as otherwise provided in this
Section 11(a), the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number
and kind of shares of capital stock issuable on such date,
shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive
the aggregate number and kind of shares of capital stock which,
if such Right had been exercised immediately prior to such date
and at a time when the Preferred Stock transfer books of the
Company were open, the holder would have owned upon such
exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification;
PROVIDED, HOWEVER, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the
aggregate par value, if any, of the shares of capital stock of
the Company issuable upon exercise of one Right.
(ii) Subject to Section 24 of this Agreement, in addition to
any adjustment pursuant to Section 11(a) (i), in the event that
any Person becomes an Acquiring Person, then (A) the Purchase
Price shall be adjusted to be the Purchase Price in effect
immediately prior to such Person becoming an Acquiring Person
multiplied by the number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately
prior to such Person becoming an Acquiring Person, whether or
not such Right was then exercisable, and (B) each holder of a
Right, except as otherwise provided in this Section 11 (a) (ii)
and Section 11 (a) (iii) hereof, shall thereafter have the
right to receive, upon exercise at a price equal to the
Purchase Price (as so adjusted), in accordance with the terms
of this Agreement and in lieu of shares of Preferred Stock,
such number of shares of Common Stock (or at the option of the
Company, such number of one one-hundredths of shares of
Preferred Stock) as shall equal the result obtained by (x)
multiplying the then current Purchase Price by the number of
one one-hundredths of a share of Preferred Stock for which a
Right is then exercisable and dividing that product by (y) 50%
of the then current per share market price of the Company's
Common Stock (determined pursuant to Section 11 (d) hereof) on
the date such Person became an Acquiring Person; PROVIDED,
HOWEVER, that the Purchase Price and the number of shares of
Common Stock so receivable upon exercise of a Right shall
thereafter be subject to further adjustment as appropriate in
accordance with Section 11 (f) hereof. Notwithstanding
anything in this Agreement to the contrary, however, from and
after the time (the "invalidation time") when any Person first
becomes an Acquiring Person, any Rights that are Beneficially
Owned by (x) any Acquiring Person (or any Affiliate or
Associate of any Acquiring Person), (y) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the invalidation time or (z) a
transferee of any Acquiring Person (or any such Affiliate or
Associate) who became a transferee prior to or concurrently
with the invalidation time pursuant to either (I) a transfer
from the Acquiring Person to holders of its equity securities
or to any Person with whom it has any continuing agreement,
arrangement or understanding regarding the transferred Rights
or (II) a transfer which the Board of Directors of the Company
has determined is part of a plan, arrangement or understanding
which has the purpose or effect of avoiding the provisions of
this paragraph, and subsequent transferees of such Persons,
shall be null and void without any further action and any
holder of such Rights shall thereafter have no rights
whatsoever with respect to such Rights under any provision of
this Agreement. The Company shall use all reasonable efforts
to ensure that the provisions of this Section 11 (a) (ii) are
complied with, but shall have no liability to any holder of
Right Certificates or other Person as a result of its failure
to make any determinations with respect to an Acquiring Person
or its Affiliates, Associates or transferees hereunder. From
and after the invalidation time, no Right Certificate shall be
issued pursuant to Section 3 or Section 6 hereof that
represents Rights that are or have become null and void
pursuant to the provisions of this Section 11 (a) (ii), and any
Right Certificate delivered to the Rights Agent that represents
Rights that are or have become null and void pursuant to the
provisions of this Section 11 (a) (ii) shall be cancelled. The
Company shall give the Rights Agent written notice of the
identity of any such Acquiring Person, Associate or Affiliate,
or the transferee of any of the foregoing, and the Rights Agent
may rely on such notice in carrying out its duties under this
Agreement and shall be deemed not to have any knowledge of the
identity of any such Acquiring Person, Associate or Affiliate
or the transferee of any of the foregoing unless and until it
shall have received such notice. From and after the occurrence
of an event specified in Section 13(a) hereof, any Rights that
theretofore have not been exercised pursuant to this Section 11
(a) (ii) shall thereafter be exercisable only in accordance
with Section 13 and not pursuant to this Section 11 (a) (ii).
(iii) The Company may at its option substitute for a share of
Common Stock issuable upon the exercise of Rights in accordance
with the foregoing Section 11 (a) (ii) such number or fractions
of shares of Preferred Stock having an aggregate current market
value equal to the current per share market price of a share of
Common Stock. In the event that there shall not be sufficient
shares of Common Stock issued but not outstanding or authorized
but unissued to permit the exercise in full of the Rights in
accordance with the foregoing Section 11 (a) (ii), the Board of
Directors of the Company shall, to the extent permitted by
applicable law and any material agreements then in effect to
which the Company is a party, (A) determine the excess of (1)
the value of the shares of Common Stock issuable upon the
exercise of a Right in accordance with Section 11 (a) (ii) (the
"Current Value") over (2) the then current Purchase Price
multiplied by the number of one one-hundredths of shares of
Preferred Stock for which a Right was exercisable immediately
prior to the time that the Acquiring Person became such (such
excess, the "Spread"), and (B) with respect to each Right
(other than Rights which have become null and void pursuant to
Section 11 (a) (ii)), make adequate provision to substitute for
the shares of Common Stock issuable in accordance with Section
11 (a) (ii) upon exercise of the Right and payment of the
applicable Purchase Price, (1) cash, (2) a reduction in the
Purchase Price, (3) shares of Preferred Stock or other equity
securities of the Company (including, without limitation,
shares or fractions of shares of Preferred Stock or preferred
stock), which, by virtue of having dividend, voting and
liquidation rights substantially comparable to those of the
shares of Common Stock, are deemed in good faith by the Board
of Directors of the Company to have substantially the same
value as the shares of Common Stock (such shares of Preferred
Stock and shares or fractions of shares of Preferred Stock,
preferred stock or other equity securities of the Company are
hereinafter referred to as "Common Stock equivalents"), (4)
debt securities of the Company, (5) other assets, or (6) any
combination of the foregoing, having a value which, when added
to the value of the shares of Common Stock actually issued upon
exercise of such Right, shall have an aggregate value equal to
the Current Value (less the amount of any reduction in the
Purchase Price), where such aggregate value has been determined
by the Board of Directors of the Company upon the advice of a
nationally recognized investment banking firm selected in good
faith by the Board of Directors of the Company; PROVIDED,
HOWEVER, if the Company shall not make adequate provision to
deliver value pursuant to clause (B) above within thirty (30)
days following the date that the Acquiring Person became such
(the "Section 11(a) (ii) Trigger Date"), then the Company shall
be obligated to deliver, to the extent permitted by applicable
law and any material agreements then in effect to which the
Company is a party, 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,
such number or fractions of shares of Preferred Stock (to the
extent available), and then, if necessary, cash, which shares
and/or cash have an aggregate value equal to the Spread. If,
upon the date any Person becomes an Acquiring Person, the Board
of Directors of the Company shall determine in good faith that
it is likely that sufficient additional shares of Common Stock
could be authorized for issuance upon exercise in full of the
Rights, then, if the Board of Directors of the Company so
elects, the thirty (30) day period set forth above may be
extended to the extent necessary, but not more than ninety (90)
days after the Section 11 (a) (ii) Trigger Date, in order that
the Company may seek shareholder approval for the authorization
of such additional shares (such thirty (30) day period, as it
may be extended, is herein called the "Substitution Period").
To the extent that the Company determines that some action need
be taken pursuant to the second and/or third sentence of this
Section 11 (a) (iii), the Company (x) shall provide, subject to
Section 11 (a) (ii) hereof and the last sentence of this
Section 11(a) (iii), that such action shall apply uniformly to
all outstanding Rights and (y) may suspend the exercisability
of the Rights until the expiration of the Substitution Period
in order to seek any authorization of additional shares and/or
to decide the appropriate form of distribution to be made
pursuant to such second sentence and to determine the value
thereof. In the event of any such suspension, the Company
shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as
well as a public announcement at such time as the suspension is
no longer in effect. The Company shall notify the Rights Agent
of any action taken pursuant to the second or third sentence of
this Section 11(a) (iii) and of any public announcement
pursuant to this Section 11(a) (iii) and shall give the Rights
Agent a copy of such public announcement. For purposes of this
Section 11(a) (iii), the value of the shares of Common Stock
shall be the current per share market price (as determined
pursuant to Section 11(d) (i)) on the Section 11(a) (ii)
Trigger Date and the per share or fractional value of any
"Common Stock equivalent" shall be deemed to equal the current
per share market price or fraction thereof of the Common Stock.
The Board of Directors of the Company may, but shall not be
required to, establish procedures to allocate the right to
receive shares of Common Stock upon the exercise of the Rights
among holders of Rights pursuant to this Section 11 (a) (iii).
(b) In case the Company shall at any time after the date of this
Agreement fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Stock entitling them (for a period
expiring within 45 calendar days after such record date) to subscribe for
or purchase Preferred Stock (or shares having the same rights, privileges
and preferences as the Preferred Stock ("equivalent preferred shares"))
or securities convertible into Preferred Stock or equivalent preferred
shares at a price per share of Preferred Stock or equivalent preferred
shares (or having a conversion price per share, if it is a security
convertible into shares of Preferred Stock or equivalent preferred
shares) less than the then current per share market price of the
Preferred Stock (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 and equivalent
preferred shares outstanding on such record date plus the number of
shares of Preferred Stock and equivalent preferred shares which the
aggregate offering price of the total number of shares of Preferred Stock
and/or equivalent preferred shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered)
would purchase at such current market price, and the denominator of which
shall be the number of shares of Preferred Stock and equivalent preferred
shares outstanding on such record date plus the number of additional
shares of Preferred Stock and/or equivalent preferred shares to be
offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible); PROVIDED,
HOWEVER, that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value, if any, of
the shares of capital stock of the Company issuable upon exercise of one
Right. In case such subscription price may be paid in a consideration
part or all of which shall be in a form other than cash, the value of
such consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent. Shares of Preferred Stock and
equivalent preferred shares owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a
record date is fixed; and in the event that such rights, options or
warrants are not so issued, the Purchase Price shall be adjusted to be
the Purchase Price which would then be in effect if such record date had
not been fixed.
(c) In case the Company shall at any time after the date of this
Agreement fix a record date for the making of a distribution to all
holders of the Preferred Stock (including without limitation any such
distribution made in connection with a consolidation or merger in which
the Company is the continuing or surviving corporation) of evidences of
indebtedness or assets (other than a regular quarterly cash dividend or a
dividend payable in Preferred Stock) or subscription rights or warrants
or options (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 then
current per share market price of the Preferred Stock (determined
pursuant to Section 11(d) hereof) on such record date, less the fair
market value (as determined in good faith by the Board of Directors of
the Company whose determination shall be described in a statement filed
with the Rights Agent) of the portion of the assets or evidences of
indebtedness so to be distributed or of such subscription rights or
warrants or options applicable to one share of Preferred Stock, and the
denominator of which shall be such current per share market price
(determined pursuant to Section 11(d) hereof) of the Preferred Stock;
PROVIDED, HOWEVER, that in no event shall the consideration to be paid
upon the exercise of one Right be less than the aggregate par value, if
any, of the shares of capital stock of the Company to be issued upon
exercise of one Right. Such adjustments shall be made successively
whenever such a record date is fixed; and in the event that such
distribution is not so made, the Purchase Price shall again be adjusted
to be the Purchase Price which would then be in effect if such record
date had not been fixed.
(d)(i) Except as otherwise provided herein, for the purpose of any
computation hereunder, the "current per share market price" of any
security (a "Security" for the purpose of this Section 11(d) (i)) on
any date shall be deemed to be the average of the daily closing
prices per share of such Security for the 30 consecutive Trading
Days (as such term is hereinafter defined) immediately prior to such
date; PROVIDED, HOWEVER, that in the event that the current per
share market price of the Security is determined during a period
following the announcement by the issuer of such Security of (A) a
dividend or distribution on such Security payable in shares of such
Security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such Security, and
prior to the expiration of 30 Trading Days after the ex-dividend
date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification, then, and in each such
case, the current per share market price shall be appropriately
adjusted to reflect the current market price per share equivalent of
such Security. The closing price for each day shall be the last
sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular
way, in either case as reported by the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
Security is not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Security is listed or
admitted to trading or, if the Security is not listed or admitted to
trading on any national securities exchange, the last quoted price
or, if not so quoted, the average of the high bid and low asked
prices in the over-the-counter market, as reported by Nasdaq or such
other system then in use, or, if on any such date the Security is
not quoted by any such system, the average of the closing bid and
asked prices as furnished by a professional market maker making a
market in the Security selected by the Board of Directors of the
Company. The term "Trading Day" shall mean a day on which the
principal national securities exchange or over-the-counter market on
which the Security is listed or admitted to trading is open for the
transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange or over-the-
market, a Business Day.
(ii) For the purpose of any computation hereunder, if the
Preferred Stock is publicly traded, the "current per share market
price" of the Preferred Stock shall be determined in accordance with
the method set forth in Section 11(d) (i). If the Preferred Stock
is not publicly traded but the Common Stock is publicly traded, the
"current per share market price" of the Preferred Stock shall be
conclusively deemed to be the current per share market price of the
Common Stock as determined pursuant to Section 11(d) (i) multiplied
by one hundred (appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date
hereof). If neither the Common Stock nor the Preferred Stock is
publicly traded, "current per share market price" of the Preferred
Stock or the Common Stock for purposes of the preceding two
sentences of this Section 11 (d) (ii), shall mean the fair value per
share as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed
with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
the Purchase Price; PROVIDED, HOWEVER, that any adjustments 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 one ten-thousandth of a share of Preferred Stock or share
of Common Stock or other share or security as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of
(i) three years from the date of the transaction which would require such
adjustment but for this Section 11(e) or (ii) the earliest of (A) the
Final Expiration Date, (B) the Redemption Date and (C) the time on which
such Rights are exchanged as provided in Section 24 hereof.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become
entitled to receive any shares of capital stock of the Company other than
the Preferred Stock, thereafter the Purchase Price and the number of such
other shares so receivable upon exercise of a Right 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), 11(b), 11(c), 11(e), 11(h), 11(i) and
11(m) and the provisions of Sections 7, 9, 10, 13 and 14 hereof with
respect to the Preferred Stock shall apply on like terms to any such
other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of one one-
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), upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase
Price, that number of one one-hundredths of a share of Preferred Stock
(calculated to the nearest one ten-thousandth 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 such adjustment by (y)
the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for
any adjustment in the number of one one-hundredths of a share of
Preferred Stock purchasable upon the exercise of a Right. Each of the
Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-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 (with prompt written
notice thereof to the Rights Agent) of its election to adjust the number
of Rights, indicating the record date for the adjustment, and, if known
at the time, the amount of the adjustment to be made. This record date
may be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Right Certificates have been issued, shall be at
least 10 days later than the date of the public announcement. If Right
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 Right
Certificates on such record date Right Certificates evidencing, subject
to Section 14 hereof, the additional Rights to which such holders shall
be entitled as a result of such adjustment, or, at the option of the
Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such
holders prior to the date of adjustment, and upon surrender thereof, if
required by the Company, new Right Certificates evidencing all the Rights
to which such holders shall be entitled after such adjustment. Right
Certificates so to be distributed shall be issued, executed and
countersigned in the manner provided for herein and shall be registered
in the names of the holders of record of Right Certificates on the record
date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a share of Preferred Stock or
other securities issuable upon the exercise of the Rights, the Right
Certificates theretofore and thereafter issued may continue to express
the Purchase Price and the number of one one-hundredths of a share of
Preferred Stock which were expressed in the initial Right Certificates
issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the
Preferred Stock or other shares of capital 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 shares of
Preferred Stock or other such shares at such adjusted Purchase Price.
(1) 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 (with prompt
written notice thereof to the Rights Agent) until the occurrence of such
event the issuing to the holder of any Right exercised after such record
date of the Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the Preferred
Stock and other capital stock or securities of the Company, if any,
issuable upon such exercise on the basis of the Purchase Price in effect
prior to such adjustment; PROVIDED, HOWEVER, that the Company shall
deliver to such holder a due xxxx or other appropriate instrument
evidencing such holder's right to receive such additional shares upon the
occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Company shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that it in its sole discretion shall
determine to be advisable in order that any consolidation or subdivision
of the Preferred Stock, issuance wholly for cash of any shares of
Preferred Stock at less than the current market price, issuance wholly
for cash or Preferred Stock or securities which by their terms are
convertible into or exchangeable for Preferred Stock, dividends on
Preferred Stock payable in shares of Preferred Stock or issuance of
rights, options or warrants referred to hereinabove in Section 11(b),
hereafter made by the Company to holders of its Preferred Stock shall not
be taxable to such shareholders.
(n) Anything in this Agreement to the contrary notwithstanding
(except Section 14), in the event that at any time after the date of this
Agreement and prior to the Distribution Date, the Company shall (i)
declare or pay any dividend on the Common Stock payable in Common Stock
or (ii) effect a subdivision, combination or consolidation of the Common
Stock (by reclassification or otherwise than by payment of a dividend
payable in Common Stock) into a greater or lesser number of Common Stock,
then in any such case, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter, 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 such
event and the denominator of which shall be the total number of shares of
Common Stock outstanding immediately following the occurrence of such
event. The adjustments provided for in this Section 11(n) shall be made
successively whenever such a dividend is declared or paid or such a
subdivision, combination or consolidation is effected.
(o) The Company covenants and agrees that, after the earlier of the
Distribution Date or the Stock Acquisition Date, it will not, except as
permitted by Sections 23, 24 or 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 eliminate the
benefits intended -to be afforded by the Rights.
Section 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF
SHARES. Whenever an adjustment is made as provided in Section 11 or 13
hereof or whenever the Company becomes aware of an event which affects
the Rights or their exercisability or causes Rights to become null and
void, the Company shall promptly (a) prepare a certificate setting forth
such adjustment or describing such event, and a brief, reasonably
detailed statement of the facts accounting for and the computation of
such adjustment, (b) file with the Rights Agent and with each transfer
agent for the Common Stock or the Preferred Stock a copy of such
certificate and (c) mail a brief summary thereof to each holder of a
Right Certificate in accordance with Section 25 hereof (if so required
under Section 25 hereof). The Rights Agent shall be fully protected in
relying on any such certificate and on any adjustment or statement
therein contained and shall have no duty or liability with respect to,
and shall not be deemed to have knowledge of, any such adjustment or
event unless and until it shall have received such certificate.
Section 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNINGS POWER.
(a) In the event, directly or indirectly, at any time after any
Person has become an Acquiring Person, (i) the Company shall merge with
and into any other Person, (ii) any Person shall consolidate with the
Company, or any Person shall merge with and into the Company and the
Company shall be the continuing or surviving corporation of such merger
and, in connection with such consolidation or merger, all or part of the
Common Stock shall be changed into or exchanged for stock or other
securities of any other Person (or of the Company) or cash or any other
property, or (iii) the Company shall sell or otherwise transfer (or one
or more of its Subsidiaries shall sell or otherwise transfer), in one or
more transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person (other than the Company or one or more of its
wholly-owned Subsidiaries), then upon the first occurrence of such event,
proper provision shall be made so that: (A) each holder of record of a
Right (other than Rights which have become null and void pursuant to
Section 11(a) (ii) shall thereafter have the right to receive, upon the
exercise thereof at a price equal to the then current Purchase Price
multiplied by the number of one one-hundredths of a share of Preferred
Stock for which a Right was exercisable (whether or not such Right was
then exercisable) immediately prior to the time that any Person first
became an Acquiring Person (each as subsequently adjusted thereafter
pursuant to Sections 11(a) (i), 11(b), 11(c), 11(h), 11(i) and 11 (m)),
in accordance with the terms of this Agreement and in lieu of Preferred
Stock, such number of validly issued, fully paid and non-assessable and
freely tradeable shares of Common Stock of the Principal Party (as
defined herein) not subject to any liens, encumbrances, rights of first
refusal or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of one
one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the time that any Person first became an
Acquiring Person (as subsequently adjusted thereafter pursuant to
Sections 11 (a) (i), 11 (b), 11 (c), 11 (h), 11(i) and 11(m)) and (2)
dividing that product by 50% of the then current per share market price
of the Common Stock of such Principal Party (determined pursuant to
Section 11(d) (i) hereof) on the date of consummation of such
consolidation, merger, sale or transfer; PROVIDED that the Purchase Price
and the number of shares of Common Stock of such Principal Party issuable
upon exercise of each Right shall be further adjusted as provided in
Section 11(f) of this Agreement to reflect any events occurring in
respect of such Principal Party after the date of such consolidation,
merger, sale or transfer; (B) such Principal Party shall thereafter be
liable for, and shall be deemed to have assumed, by virtue of such
consolidation, merger, sale or transfer, all the obligations and duties
of the Company pursuant to this Agreement; (C) the term "Company" shall
thereafter be deemed to refer to such Principal Party; and (D) such
Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its shares of Common Stock in
accordance with Section 9 hereof) in connection with such 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 the shares of its Common Stock thereafter deliverable upon
the exercise of the Rights; provided that, upon the subsequent occurrence
of any consolidation, merger, sale or transfer of assets or other
extraordinary transaction in respect of such Principal Party, each holder
of a Right shall thereupon be entitled to receive, upon exercise of a
Right and payment of the Purchase Price as provided in this Section 13
(a), such cash, shares, rights, warrants and other property which such
holder would have been entitled to receive had such holder, at the time
of such transaction, owned the Common Stock of the Principal Party
receivable upon the exercise of a Right pursuant to this Section 13 (a),
and such Principal Party shall take such steps (including, but not
limited to, reservation of shares of stock) as may be necessary to permit
the subsequent exercise- of the Rights in accordance with the terms
hereof for such cash, shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (i) or (ii) of
the first sentence of Section 13 (a): (A) the Person that is the
issuer of the securities into which the shares of Common Stock are
converted in such merger or consolidation, or, if there is more than
one such issuer, the issuer the shares of Common Stock of which have
the greatest aggregate market value of shares outstanding, or (B) if
no securities are so issued, (x) the Person other than the Company
that is a party to the merger, if such Person survives said merger,
or, if there is more than one such Person, the Person the shares of
Common Stock of which have the greatest aggregate market value of
shares outstanding or (y) if such Person does not survive the
merger, the Person that does survive the merger (including the
Company if it survives) or (z) the Person resulting from the
consolidation; and
(ii) in the case of any transaction described in (iii) of the
first sentence in Section 13 (a), the Person that is the party
receiving the greatest portion of the assets or earning power sold
or transferred pursuant to such transaction or transactions, or, if
each Person that is a party to such transaction or transactions
receives the same portion of the assets or earning power so sold or
transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such
Persons as is the issuer of Common Stock having the greatest
aggregate market value of shares outstanding; provided, however,
that in any such case described in the foregoing clause (b) (i) or
(b) (ii), if the Common Stock of such Person is not at such time or
has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, then (1) if such
Person is a direct or indirect Subsidiary of another Person the
Common Stock of which is and has been so registered, the term
"Principal Party" shall refer to such other Person, or (2) if such
Person is a Subsidiary, directly or indirectly, of more than one
Person, and the Common Stocks of all of such Persons have been so
registered, the term "Principal Party" shall refer to whichever of
such Persons is the issuer of Common Stock having the greatest
aggregate market value of shares outstanding, or (3) if such Person
is owned, directly or indirectly, by a joint venture formed by two
or more Persons that are not owned, directly or indirectly, by the
same Person, the rules set forth in clauses (1) and (2) above shall
apply to each of the owners having an interest in the joint venture
as if the Person owned by the joint venture was a Subsidiary of both
or all of such joint venturers, and the Principal Party in each such
case shall bear the obligations set forth in this Section 13 in the
same ratio as its interest in such Person bears to the total of such
interests.
(c) The Company shall not consummate any consolidation, merger,
sale or transfer referred to in Section 13(a) hereof unless prior thereto
the Company and the Principal Party involved therein shall have executed
and delivered to the Rights Agent an agreement confirming that the
requirements of Sections 13(a) and (b) hereof shall promptly be performed
in accordance with their terms and that such consolidation, merger, sale
or transfer of assets shall not result in a default by the Principal
Party under this Agreement as the same shall have been assumed by the
Principal Party pursuant to Sections 13 (a) and (b) hereof and providing
that, as soon as practicable after executing such agreement pursuant to
this Section 13 (c), the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate
form, use its best efforts to cause such registration statement to
become effective as soon as practicable after such filing and use
its best efforts to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements
of the Securities Act) until the Final Expiration Date, and
similarly comply with applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the
Principal Party shall be listed or admitted to trading on the New
York Stock Exchange or on another national securities exchange, to
list or admit to trading (or continue the listing of) the Rights and
the securities purchasable upon exercise of the Rights on the New
York Stock Exchange or such securities exchange, or, if the Common
Stock of the Principal Party shall not be listed or admitted to
trading on the New York Stock Exchange or a national securities
exchange, to cause the Rights and the securities receivable upon
exercise of the Rights to be reported by Nasdaq or such other system
then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with
the requirements for registration on Form 10 (or any successor form)
under the Exchange Act; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the Common Stock of the Principal
Party subject to purchase upon exercise of outstanding Rights.
(d) In case the Principal Party has any provision in any of its
authorized securities or in its certificate of incorporation or by-laws
or other instrument governing its corporate affairs, which provision
would have the effect of (i) causing such Principal Party to issue (other
than to holders of Rights pursuant to this Section 13), in connection
with, or as a consequence of, the consummation of a transaction referred
to in this Section 13, shares of Common Stock of such Principal Party at
less than the then current market price per share thereof (determined
pursuant to Section 11(d) hereof) or securities exercisable for, or
convertible into, Common Stock of such Principal Party at less than such
then current market price, or (ii) providing for any special payment,
tax, charge or similar provision in connection with the issuance of the
Common Stock of such Principal Party pursuant to the provisions of
Section 13, then, in such event, the Company hereby agrees with each
holder of Rights that it shall not consummate any such transaction unless
prior thereto the Company and such Principal Party shall have executed
and delivered to the Rights Agent a supplemental agreement providing that
the provision in question of such Principal Party shall have been
cancelled, waived or amended, or that the authorized securities shall be
redeemed, so that the applicable provision will have no effect in
connection with, or as a consequence of, the consummation of the proposed
transaction.
(e) The Company covenants and agrees that it shall not, at any
time after a Person first becomes an Acquiring Person, enter into any
transaction of the type contemplated by (i), (ii) or (iii) of Section 13
(a) hereof if (x) at the time of or immediately after such consolidation,
merger, sale, transfer or other transaction there are any rights,
warrants or other instruments or securities outstanding or agreements in
effect which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights, (y) prior to,
simultaneously with or immediately after such consolidation, merger,
sale, transfer or other transaction, the shareholders 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 or Associates or
(z) the form or nature of organization of the Principal Party would
preclude or limit the exercisability of the Rights. The provisions of
this Section 13 shall similarly apply to successive mergers,
consolidations, sales, dispositions, transfers and other transactions.
Section 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES. (a) The
Company shall not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights. In lieu
of such fractional Rights, there shall be paid to the registered holders
of the Right Certificates with regard to which such fractional Rights
would otherwise be issuable, an amount in cash equal to the same fraction
of the current market value of a whole Right. For the purposes of this
Section 14(a), the current market value of a whole Right shall be the
closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable.
The closing price for any day shall be the last sale price, regular way,
or, in case no such sale takes place on such day, the average of the
closing bid and asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange
or, if the Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal
national securities exchange on which the Rights are listed or admitted
to trading or, if the Rights are not listed or admitted to trading on any
national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and low asked prices in the over-the-counter
market, as reported by Nasdaq or such other system then in use or, if on
any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the
Board of Directors of the Company. If on any such date no such market
maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue fractions of
Preferred 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 which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one
one-hundredth of a share of Preferred Stock). Interests in fractions of
Preferred Stock in integral multiples of one one-hundredth of a share of
Preferred Stock may, at the election of the Company, be evidenced by
depositary receipts, pursuant to an appropriate agreement between the
Company and a depositary selected by it; PROVIDED, that such agreement
shall provide that the holders of such depositary receipts shall have all
the rights, privileges and preferences to which they are entitled as
beneficial owners of the Preferred Stock represented by such depositary
receipts. 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 shall pay to the registered holders of Right 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
Preferred Stock. For the purposes of this Section 14(b), the current
market value of a share of Preferred Stock shall be the closing price of
a share of Preferred Stock (as determined pursuant to Section 11(d) (i)
hereof) for the Trading Day immediately prior to the date of such
exercise.
(c) The Company shall not be required to issue fractions of
shares of Common Stock or to distribute certificates which evidence
fractional shares of Common Stock upon the exercise or exchange of
Rights. In lieu of such fractional shares of Common Stock, the Company
shall pay to the registered holders of the Right 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 one share of Common Stock. For the purposes of this
Section 14 (c), the current market value of a share of Common Stock shall
be the closing price of a 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 or exchange.
(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 provided above).
Section 15. RIGHTS OF ACTION. (a) All rights of action in respect
of this Agreement, excepting the rights of action given to the Rights
Agent under Section 18 and Section 20 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior to
the Distribution Date, the registered holders of the Common Stock); and
any registered holder of any Right Certificate (or, prior to the
Distribution Date, of any of the Common Stock), without the consent of
the Rights Agent or of the holder of any other Right Certificate (or,
prior to the Distribution Date, of any other Common Stock), on his own
behalf and for his own benefit, may 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 Right Certificate (or, prior to the Distribution Date,
such Common Stock) in the manner provided in such Right 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 by the Company and will be entitled to specific
performance of, and injunctive relief against actual or threatened
violations of, the obligations of the Company under this Agreement.
(b) 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, judgment, decree or ruling
(whether interlocutory or final) issued by a court or by a governmental,
regulatory, self-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, however, that the Company must
use all reasonable efforts to have any such injunction, order, judgment,
decree or ruling lifted or otherwise overturned as soon as possible.
Section 16. AGREEMENT OF RIGHT HOLDERS. Every holder of a Right,
by accepting the same, consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office or agency of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper instrument of
transfer; and
(c) the Company and the Rights Agent may deem and treat the Person
in whose name the Right 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 Right 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 shall be affected by any notice to the contrary.
Section 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A SHAREHOLDER. No
holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the
Preferred Stock or any other securities which may at any time be issuable
on the exercise of the Rights represented thereby, nor shall anything
contained herein or in any Right Certificate be construed to confer upon
the holder of any Right Certificate, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders
(except as provided in this Agreement), or to receive dividends or
subscription rights, or otherwise, until the Rights evidenced by such
Right Certificate shall have been exercised in accordance with the
provisions hereof.
Section 18. CONCERNING THE RIGHTS AGENT. (a) The Company agrees
to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights
Agent, its reasonable expenses and counsel fees and other disbursements
incurred in the preparation, delivery, amendment, administration and
execution of this Agreement and the exercise and performance of its
duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, damage,
judgment, fine, penalty, claim, demand, cost or expense (including
without limitation reasonable fees and expenses of legal counsel)
incurred without gross negligence, bad faith or willful misconduct on the
part of the Rights Agent (which gross negligence, bad faith or willful
misconduct must be 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, administration, exercise and performance of its duties under
this Agreement, including the costs and expenses of defending against any
claim of liability arising therefrom, directly or indirectly. The
indemnity provided for herein shall survive the termination of this
Agreement and the exercise or expiration of the Rights. The costs and
expenses incurred in enforcing this right of indemnification shall be
paid by the Company. 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.
(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 and the exercise and performance of its duties hereunder
in reliance upon any Right Certificate or certificate for the Preferred
Stock or 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, or otherwise upon the advice of counsel as set forth in Section
20 hereof.
Section 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS
AGENT.
(a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or
any successor Rights Agent shall be a party, or any Person succeeding to
the shareholder services business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto; PROVIDED, that such Person
would be eligible for appointment as a successor Rights Agent under the
provisions of Section 21 hereof. In case at the time such successor
Rights Agent shall succeed to the agency created by this Agreement, any
of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature
of the predecessor Rights Agent and deliver such Right Certificates so
countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificates either in the name of the predecessor
Rights Agent or in the name of the successor Rights Agent; and in all
such cases such Right Certificates shall have the full force provided in
the Right Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Right Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right Certificates so
countersigned; and in case at that time any of the Right Certificates
shall not have been countersigned, the Rights Agent may countersign such
Right Certificates either in its prior name or in its changed name and in
all such cases such Right Certificates shall have the full force provided
in the Right Certificates and in this Agreement.
Section 20. RIGHTS AND DUTIES OF RIGHTS AGENT. The Rights Agent
undertakes to perform only the duties and obligations expressly imposed
by this Agreement upon the following terms and conditions, by all of
which the Company and the holders of Right 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 or an employee of the Rights Agent), and
the advice of such counsel shall be full and complete authorization and
protection to the Rights Agent as to, and the Rights Agent shall incur no
liability for or in respect of, any action taken, suffered or omitted by
it in good faith and in accordance with such advice.
(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 the current per share market price of any
security) 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 any one of the Chairman of the Board of Directors
of the Company, the President, any Vice President, the Treasurer, the
Controller or the Secretary of the Company and delivered to the Rights
Agent; and such certificate 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 in
good faith by it under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and
any other Person only for its own gross negligence, bad faith or wilful
misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the
Right Certificates (except its countersignature thereof) or be required
to verify the same, but all such statements and recitals are and shall be
deemed to have been made by the Company only.
(e) The Rights Agent shall not have any liability for or be under
any responsibility in respect of the validity of this Agreement or the
execution and delivery hereof (except the due execution hereof by the
Rights Agent) or in respect of the validity or execution of any Right
Certificate (except its countersignature thereof); nor shall it be liable
or responsible for any breach by the Company of any covenant or condition
contained in this Agreement or in any Right Certificate; nor shall it be
liable or responsible for any change in the exercisability of the Rights
(including the Rights becoming null and void pursuant to Section 11 (a)
(ii) hereof) or any change or adjustment in the terms of the Rights
(including the manner, method or amount thereof) provided for in Sections
3, 11, 13, 23 or 24, or the ascertaining of the existence of facts that
would require any such change or adjustment (except with respect to the
exercise of Rights evidenced by Right Certificates after receipt of a
certificate furnished pursuant to Section 12, describing such change or
adjustment); nor shall it by any act hereunder be deemed to make any
representation or warranty as to the authorization or reservation of any
shares of Preferred Stock or other securities to be issued pursuant to
this Agreement or any Right Certificate or as to whether any shares of
Preferred Stock or other securities will, when issued, be validly
authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as
may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
any person reasonably believed by the Rights Agent to be one of the
Chairman of the Board of Directors of the Company, the President, any
Vice President, the Treasurer, the Controller or the Secretary of the
Company, and to apply to such officers for advice or instructions in
connection with its duties, such advice or instructions shall be full
authorization and protection to the Rights Agent, and the Rights Agent
shall not be liable for any action taken, suffered, or omitted by it in
good faith in accordance with advice or instructions of any such officer
or for any delay in acting while waiting for such advice or
instructions. The Rights Agent shall be fully authorized and protected
in relying upon the most recent advice or instructions received from any
such officer. Any application by the Rights Agent for written
instructions from the Company may, at the option of the Rights Agent, set
forth in writing any action proposed to be taken, suffered, or omitted by
the Rights Agent under this Agreement and the date on and/or after which
such action shall be taken or suffered or such omission shall be
effective. The Rights Agent shall not be liable for any action taken or
suffered by, or any omission of, the Rights Agent in accordance with a
proposal included in any such application on or after the date specified
in such application (which date shall not be less than five Business Days
after the date any officer of the Company actually receives such
application, unless any such officer shall have consented in writing to
an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application specifying
the action to be taken, suffered, or omitted.
(h) The Rights Agent and any shareholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of
the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and
freely as though the Rights Agent were not Rights Agent under this
Agreement. Nothing herein shall preclude the Rights Agent or any such
shareholder, affiliate, director, officer or employee 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 or any other
Person resulting from any such act, default, neglect or misconduct,
absent gross negligence, bad faith or wilful misconduct in the selection
and continued employment thereof.
(j) 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 not been completed to certify
the holder is not an Acquiring Person (or an Affiliate or Associate
thereof), the Rights Agent shall not take any further action with respect
to such requested exercise or transfer without first consulting with, and
receiving instructions from, the Company.
(k) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if it believes that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
Section 21. CHANGE OF RIGHTS AGENT. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under
this Agreement upon 30 days' notice in writing mailed to the Company and
to each transfer agent of the Common Stock or Preferred Stock known to
the Rights Agent by registered or certified mail, and, following the
Distribution Date, to the holders of the Right Certificates by first-
class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 30 days' notice in writing, mailed to the Rights Agent
or successor Rights Agent, as the case may be, and to each transfer agent
of the Common Stock or Preferred Stock by registered or certified mail,
and, following the Distribution Date, to the holders of the Right
Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall
appoint a successor to the Rights Agent. If the Company shall fail to
make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation
or incapacity by the resigning or incapacitated Rights Agent or by the
holder of a Right Certificate (who shall, with such notice, submit his
Right Certificate for inspection by the Company), then the registered
holder of any Right 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 Person organized and doing business under the laws of the United
States or any State thereof, 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 million, or is an affiliate of any such Person. After
appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor
Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose.
Not later than the effective date of any such appointment the Company
shall file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Common Stock or Preferred Stock, and,
following the Distribution Date, mail a notice thereof in writing to the
registered holders of the Right 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 RIGHT CERTIFICATES. Notwithstanding
any of the provisions of this Agreement or of the Rights to the contrary,
the Company may, at its option, issue new Right Certificates evidencing
Rights in such forms as may be approved by its Board of Directors to
reflect any adjustment or change in the Purchase Price and the number or
kind or class of shares or other securities or property purchasable under
the Right Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of
Common Stock following the Distribution Date and prior to the earlier of
the Redemption Date and the Final Expiration Date, the Company may with
respect to shares of Common Stock so issued or sold pursuant to (i) the
exercise of stock options, (ii) under any employee plan or arrangement,
(iii) upon the exercise, conversion or exchange of securities, notes or
debentures issued by the Company or (iv) a contractual obligation of the
Company in each case existing prior to the Distribution Date, issue
Rights Certificates representing the appropriate number of Rights in
connection with such issuance or sale.
Section 23. REDEMPTION.
(a) The Board of Directors of the Company may, at any time prior to
the earlier of (i) the close of business on the tenth day following the
Stock Acquisition Date, subject to extension by the Board as provided in
Section 23(b) hereof, or (ii) the close of business on the Final
Expiration Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $.001 per Right, appropriately adjusted
to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (the redemption price being hereinafter
referred to as the "Redemption Price"). The redemption of the Rights may
be made effective at such time, on such basis and with such conditions as
the Board of Directors of the Company in its sole discretion may
establish. The Company may, at its option, pay the Redemption Price in
cash, shares of Common Stock (based on the current market price of the
Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors of the
Company.
(b) The Board of Directors of the Company may, at its option and
as provided herein, at any time prior to the close of business on the
Final Expiration Date and prior to such time as the Rights are no longer
redeemable by the Board, from time to time supplement or amend the Rights
Agreement without the approval of the holders of any Rights or the Rights
Agent to extend or shorten the time during which the Rights may be
redeemed.
(c) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights pursuant to paragraph (a)
of this Section 23 (or at such later time as the Board of Directors of
the Company may establish for the effectiveness of such redemption), and
without any further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the holders of
Rights shall be to receive the Redemption Price. The Company shall
promptly give public notice of any such redemption (with prompt written
notice thereof to the Rights Agent); PROVIDED, HOWEVER, that the failure
to give, or any defect in, any such notice shall not affect the validity
of such redemption. Within 10 days after such action of the Board of
Directors of the Company ordering the redemption of the Rights (or such
later time as the Board of Directors of the Company may establish for the
effectiveness of such redemption), the Company shall mail a notice of
redemption to all the holders of the then outstanding Rights at their
last addresses as they appear upon the registry books of the Rights Agent
or, prior to the Distribution Date, on the registry books of the transfer
agent for the Common Stock. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption shall state the method by
which the payment of the Redemption Price will be made.
Section 24. EXCHANGE.
(a) The Board of Directors of the Company may, at its option, at
any time after any Person first becomes an Acquiring Person, exchange all
or part of the then outstanding and exercisable Rights (which shall not
include Rights that have become null and void pursuant to the provisions
of Section 11(a) (ii) hereof) for shares of Common Stock at an exchange
ratio of one share of Common Stock per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such amount per Right being hereinafter referred
to as the "Exchange Ratio"). From and after the occurrence of an event
specified in Section 13(a) hereof, any Rights that theretofore have not
been exchanged pursuant to this Section 24(a) shall thereafter be
exercisable only in accordance with Section 13 and may not be exchanged
pursuant to this Section 24(a). The exchange of the Rights by the Board
of Directors of the Company may be made effective at such time, on such
basis and with such conditions as the Board of Directors of the Company
in its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of the Board
of Directors of the Company ordering the exchange of any Rights pursuant
to paragraph (a) of this Section 24 and without any further action and
without any notice, the right to exercise such Rights shall terminate and
the only right thereafter of a holder of such Rights shall be to receive
that number of shares of Common Stock equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange (with prompt written
notice thereof to the Rights Agent); PROVIDED, HOWEVER, that the failure
to give, or any defect in, such notice shall not affect the validity of
such exchange. The Company shall promptly mail a notice of any such
exchange to all of the holders of the Rights so exchanged at their last
addresses as they appear upon the registry books of the Rights Agent.
Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the 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 the provisions of Section
11(a) (ii) hereof) held by each holder of Rights.
(c) The Company may at its option, and, in the event that there
shall not be sufficient shares of Common Stock issued but not outstanding
or authorized but unissued to permit an exchange of Rights as
contemplated in accordance with this Section 24, the Company shall to the
extent of such insufficiency, substitute for each share of Common Stock
that would otherwise be issuable upon exchange of a Right, a number of
shares of Preferred Stock or fraction thereof (or equivalent preferred
shares as such term is defined in Section 11(b)) such that the current
per share market price (determined pursuant to Section 11(d) hereof) of
one share of Preferred Stock (or equivalent preferred share) multiplied
by such number or fraction is equal to the current per share market price
of one share of Common Stock (determined pursuant to Section 11(d)
hereof) as of the date of such exchange.
(d) The Company shall not be required to issue fractions of shares
of Common Stock or to distribute certificates which evidence fractional
shares of Common Stock. In lieu of such fractional shares, the Company
shall pay to the registered holders of the Right Certificates with regard
to which such fractional shares would otherwise be issuable an amount in
cash equal to the same fraction of the current market value of a whole
share of Common Stock. For the purposes of this paragraph (d), the
current market value of a whole share of Common Stock shall be the
closing price of a share of a Common Stock (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day
immediately prior to the date of exchange pursuant to this Section 24.
Section 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall at any time after the earlier of the
Distribution Date or the Stock Acquisition Date propose (i) to pay any
dividend payable in stock of any class to the holders of its Preferred
Stock or to make any other distribution to the holders of its Preferred
Stock (other than a regular quarterly cash dividend), (ii) to offer to
the holders of its 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, (iii) to effect
any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision or combination of
outstanding Preferred Stock), (iv) to effect the liquidation, dissolution
or winding up of the Company, or (v) to declare or pay any dividend on
the Common Stock payable in Common Stock or to effect a subdivision,
combination or consolidation of the Common Stock (by reclassification or
otherwise than by payment of dividends in Common Stock), then, in each
such case, the Company shall give to the Rights Agent and to each holder
of a Right Certificate, in accordance with Section 26 hereof, a notice of
such proposed action, which shall specify the record date for the
purposes of such stock dividend, distribution of rights or warrants,
reclassification, subdivision, combination or consolidation, or the date
on which such liquidation, dissolution or winding up is to take place and
the date of participation therein by the holders of the Common Stock
and/or 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 10 days prior to the record date for determining holders
of the Preferred Stock for purposes of such action, and in the case of
any such other action, at least 10 days prior to the date of the taking
of such proposed action or the date of participation therein by the
holders of the Common Stock and/or Preferred Stock, whichever shall be
the earlier.
(b) In case any event described in Section 11 (a) (ii) or Section
13 (a) shall occur, then the Company shall as soon as practicable
thereafter give to the Rights Agent and to each holder of a Right
Certificate (or if occurring prior to the Distribution Date, the holders
of the Common Stock) in accordance with Section 26 hereof, a notice of
the occurrence of such event, which notice shall describe such event and
the consequences of such event to holders of Rights under Section 11(a)
(ii) and Section 13 hereof.
Section 26. NOTICES. Notice or demands authorized by this
Agreement to be given or made by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be sufficiently given or
made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Rights Agent) as follows:
CAI Wireless Systems, Inc.
Third Floor
00 Xxxxxxxxx Xxxxx Xxxxxxxxx
Xxxxxx, XX 00000
Attention: Secretary
Subject to the provisions of Section 21 hereof, any notice or demand
authorized by this Agreement to be given or made by the Company or by the
holder of any Right Certificate to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) as
follows:
ChaseMellon Shareholder Services, L.L.C.
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, XX 00000-0000
Attention: General Counsel
Notices or demands authorized by this Agreement to be given or made by
the Company or the Rights Agent to the holder of any Right Certificate
shall be sufficiently given or made if sent by first-class mail, postage
prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
Section 27. SUPPLEMENTS AND AMENDMENTS. Except as otherwise
provided in this Section 27, for so long as the Rights are then
redeemable, the Company may in its sole and absolute discretion, and the
Rights Agent shall if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any
holders of the Rights. At any time when the Rights are no longer
redeemable, except as otherwise provided in this Section 27, the Company
may, 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 to (i) cure any ambiguity, (ii) correct or
supplement any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) shorten or lengthen
any time period hereunder, or (iv) change or supplement the provisions
hereunder in any manner which the Company may deem necessary or
desirable; PROVIDED that no such supplement or amendment shall adversely
affect the interests of the holders of Rights as such (other than an
Acquiring Person or an Affiliate or Associate of an Acquiring Person),
and no such amendment may cause the Rights again to become redeemable or
cause the Agreement again to become amendable other than in accordance
with this sentence. Notwithstanding anything contained in this
Agreement to the contrary, no supplement or amendment shall be made which
decreases the Redemption Price. Upon the delivery of a certificate from
an appropriate officer of the Company and, if requested by the Rights
Agent, an opinion of counsel for the Company, which states that the
proposed supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent shall execute such supplement or amendment.
Notwithstanding anything contained in this Agreement to the contrary, the
Rights Agent may, but shall not be obligated to, enter into any
supplement or amendment that affects the Rights Agent's own rights,
duties, obligations or immunities under this Agreement. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of Common Stock.
Section 28. SUCCESSORS. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 29. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and,
prior to the Distribution Date, 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 Right Certificates (and, prior to the
Distribution Date, the Common Stock).
Section 30. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS OF
THE COMPANY. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to
exercise the rights and powers specifically granted to the Board of
Directors of the Company or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable
for the administration of this Agreement (including, without limitation,
a determination to redeem or not redeem the Rights or to amend this
Agreement). All such actions, calculations, interpretations and
determinations (including, for purposes of clause (y) below, all
omissions with respect to the foregoing) that are done or made by the
Board of Directors of the Company in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of
the Rights, as such, and all other Persons, and (y) not subject the Board
of Directors of the Company or its members to any liability to the
holders of the Rights. The Rights Agent is entitled always to assume the
Board of Directors of the Company acted in good faith and shall be fully
protected and incur no liability in reliance thereon.
Section 31. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement or applicable to 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.
Section 32. GOVERNING LAW. This Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under
the laws of the State of Connecticut and for all purposes shall be
governed by and construed in accordance with the laws of such State
applicable to contracts made and performed entirely within such State;
provided, that the rights, duties and obligations of the Rights Agent
shall be governed by and construed in accordance with and only with the
laws of the State of New York applicable to contracts made and performed
entirely within New York.
Section 33. COUNTERPARTS. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all
purposes be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
Section 34. DESCRIPTIVE HEADINGS. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the
provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and attested, all as of the day and year first above
written.
Attest: CAI Wireless Systems, Inc.
By /s/ Xxxxx Xxxx, Xx. By /s/ Xxxxx X. Xxxxxx
Name: Xxxxx Xxxx, Xx. Name: Xxxxx X. Xxxxxx
Title: Secretary Title: Executive Vice President
and CFO
Attest: ChaseMellon Shareholder
Services, L.L.C.
as Rights Agent
By /s/ Xxxx X. Xxxxx By /s/ Xxxxxx X. Xxxxx
Name: Xxxx X. Xxxxx Name: Xxxxxx X. Xxxxx
Title: Executive Assistant Title: Vice President
EXHIBIT A
FORM
OF
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
WITH RESPECT TO
SERIES A PREFERRED STOCK
OF
CAI WIRELESS SYSTEMS, INC.
(Pursuant to Section 33-666 of the
Connecticut Business Corporation Act)
CAI Wireless Systems, Inc., a corporation organized and existing
under the law of the State of Connecticut (hereinafter called the
"Company"), hereby certifies that the following resolution was duly
adopted by the Board of Directors of the Company as authorized and
required by Section 33-666 of the Connecticut Business
Corporation Act at a meeting duly called and held on April 16, 1999:
RESOLVED, that pursuant to the authority granted to and vested in
the Board of Directors of the Company (hereinafter called the "Board of
Directors" or the "Board") in accordance with the provisions of the
Company's Certificate of Incorporation, as amended to date (hereinafter
called the "Certificate of Incorporation"), the Board of Directors hereby
creates a series of Preferred Stock, $.01 par value, of the Company and
hereby states the designation and number of shares, and fixes the terms,
preferences, limitations and relative rights thereof, and amends Article
THIRD of the Certificate of Incorporation by adding the following heading
and Sections after Paragraph (b) thereof as follows:
SERIES A PREFERRED STOCK
Section 1. DESIGNATION AND AMOUNT. The shares of such series shall
be designated as "Series A Preferred Stock" (the "Series A Preferred
Stock") and the number of shares constituting the Series A Preferred
Stock shall be 2,000,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; PROVIDED, that no
decrease shall reduce the number of shares of Series A Preferred Stock to
a number less than the number of shares then outstanding plus the number
of shares reserved for issuance upon the exercise of outstanding options,
rights or warrants or upon the conversion of any outstanding securities
issued by the Company convertible into Series A Preferred Stock. Shares
of Series A Preferred Stock shall have a par value of $.01 per share.
Section 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock of the Company (the "Preferred Stock") (or any
similar stock) ranking prior and superior to the Series A Preferred Stock
with respect to dividends, the holders of shares of Series A Preferred
Stock, in preference to the holders of Common Stock, without par value of
the Company (the "Common Stock") and of any other stock of the Company
ranking junior to the Series A Preferred Stock, shall be entitled to
receive, when, as and if declared by the Board of Directors out of funds
legally available for the purpose, quarterly dividends payable in cash on
the last day of January, April, July, and October in each year (each such
date being referred to herein as a "Dividend Payment Date"), commencing
on the first Dividend Payment Date after the first issuance of a share or
fraction of a share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (a) $1 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, declared on the Common Stock since the immediately preceding
Dividend Payment Date or, with respect to the first Dividend Payment
Date, since the first issuance of any share or fraction of a share of
Series A Preferred Stock. In the event the Company shall at any time
declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event under 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 Company shall declare a dividend or distribution on the
Series A Preferred Stock as provided in paragraph (A) of this Section
immediately after it declares a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common Stock); provided
that, in the event no dividend or distribution shall have been declared
on the Common Stock during the period between any Dividend Payment Date
and the next subsequent Dividend Payment Date, a dividend of $1 per share
on the Series A Preferred Stock shall nevertheless be payable, when, as
and if declared, on such subsequent Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative, whether or
not earned or declared, on outstanding shares of Series A Preferred Stock
from the Dividend Payment Date next preceding the date of issue of such
shares, unless the date of issue of such shares is prior to the record
date for the first 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 Dividend Payment Date or is a date after
the record date for the determination of holders of shares of Series A
Preferred Stock entitled to receive a quarterly dividend and before such
Dividend Payment Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Dividend Payment Date.
Accrued but unpaid dividends shall not bear interest. Dividends paid on
the shares of Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on such shares
shall be allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. The Board of Directors may fix a record
date for the determination of holders of shares of Series A Preferred
Stock entitled to receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
Section 3. VOTING RIGHTS. The holders of shares of Series A
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth
and except as otherwise provided in the Certificate of Incorporation or
required by law, each share of Series A Preferred Stock shall entitle the
holder thereof to 100 votes on all matters upon which the holders of the
Common Stock of the Company are entitled to vote. In the event the
Company shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the number of votes per share to which holders of
shares of Series A Preferred Stock were entitled immediately prior to
such event shall be adjusted by multiplying 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, in the Certificate of
Incorporation or in any other Certificate of Amendment to the Certificate
of Incorporation creating a series of Preferred Stock or any similar
stock, and except as otherwise required by law, the holders of shares of
Series A Preferred Stock and the holders of shares of Common Stock and
any other capital stock of the Company having general voting rights shall
vote together as one class on all matters submitted to a vote of
shareholders of the Company.
(C) Except as set forth herein, or as otherwise provided by law,
holders of Series A Preferred Stock shall have no special voting rights
and their consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth herein) for
taking any corporate action.
Section 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as provided in
Section 2 are in arrears, thereafter and until all accrued and unpaid
dividends and distributions, whether or not earned or declared, on shares
of Series A Preferred Stock outstanding shall have been paid in full, the
Company shall not:
(i) declare or pay dividends, or make any other distributions,
on any shares of stock ranking junior (as to dividends) to the
Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (as to
dividends) with the Series A Preferred Stock, except dividends paid
ratably on the Series A Preferred Stock and all such parity stock on
which dividends are payable or in arrears in proportion to the total
amounts to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to the
Series A Preferred Stock, provided that the Company may at any time
redeem, purchase or otherwise acquire shares of any such junior
stock in exchange for shares of any stock of the Company ranking
junior (as to dividends and upon dissolution, liquidation or winding
up) to the Series A Preferred Stock or rights, warrants or options
to acquire such junior stock;
(iv) redeem or purchase or otherwise acquire for consideration
any shares of Series A Preferred Stock, or any shares of stock
ranking on a parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series A Preferred Stock, except
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 Company shall not permit any subsidiary of the Company to
purchase or otherwise acquire for consideration any shares of stock of
the Company unless the Company could, under paragraph (A) of this Section
4, purchase or otherwise acquire such shares at such time and in such
manner.
Section 5. REACQUIRED SHARES. Any shares of Series A Preferred
Stock purchased or otherwise acquired by the Company in any manner
whatsoever shall be retired and cancelled promptly after the acquisition
thereof. All such shares shall upon their retirement 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 any conditions and restrictions on
issuance set forth herein.
Section 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Company, no distribution
shall be made (A) to the holders of the Common Stock or of shares of any
other stock of the Company ranking junior, upon liquidation, dissolution
or winding up, to the Series A Preferred Stock unless, prior thereto, the
holders of shares of Series A Preferred Stock shall have received $100
per share, plus an amount equal to accrued and unpaid dividends and
distributions thereon, whether or not earned or declared, to the date of
such payment, provided that the holders of shares of Series A Preferred
Stock shall be entitled to receive an aggregate amount per share, subject
to the provision for adjustment hereinafter set forth, equal to 100
times the aggregate amount to be distributed per share to holders of
shares of Common Stock, or (B) to the holders of shares of stock ranking
on a parity upon liquidation, dissolution or winding up with the Series A
Preferred Stock, except distributions made ratably on the Series A
Preferred Stock and all such parity stock in proportion to the total
amounts to which the holders of all such shares are entitled upon such
liquidation, dissolution or winding up. In the event, however, that
there are not sufficient assets available to permit payment in full of
the Series A Preferred Stock liquidation preference and the liquidation
preferences of all other classes and series of stock of the Company, if
any, that rank on a parity with the Series A Preferred Stock in respect
thereof, then the assets available for such distribution shall be
distributed ratably to the holders of the Series A Preferred Stock and
the holders of such parity shares in the proportion to their respective
liquidation preferences. In the event the Company shall at any time
declare or pay any dividend on the Common Stock payable in shares of
Common Stock, or effect a subdivision or combination or consolidation of
the outstanding shares of Common Stock (by reclassification or otherwise
than by payment of a dividend in shares of Common Stock) into a greater
or lesser number of shares of Common Stock, then in each such case the
aggregate amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event under the proviso in clause
(A) 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.
Section 7. CONSOLIDATION, MERGER, ETC. In case the Company shall
enter into any consolidation, merger, combination or other transaction in
which the shares of Common Stock are converted into, exchanged for or
changed into other stock or securities, cash and/or any other property,
then in any such case each share of Series A Preferred Stock shall at the
same time be similarly converted into, exchanged for or changed into 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 converted, exchanged or
converted. In the event the Company shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect
a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise than by payment of a
dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the conversion, exchange or change
of shares of Series A Preferred Stock shall be adjusted by multiplying
such amount by a fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 8. NO REDEMPTION. The shares of Series A Preferred Stock
shall not be redeemable from any holder.
Section 9. RANK. The Series A Preferred Stock shall rank, with
respect to the payment of dividends and the distribution of assets upon
liquidation, dissolution or winding up of the Company, junior to all
other series of Preferred Stock and senior to the Common Stock.
Section 10. AMENDMENT. If any proposed amendment to the
Certificate of Incorporation would alter, change or repeal any of the
preferences, powers or special rights given to the Series A Preferred
Stock so as to affect the Series A Preferred Stock adversely, then the
holders of the Series A Preferred Stock shall be entitled to vote
separately as a class upon such amendment, and the affirmative vote of
two-thirds of the outstanding shares of the Series A Preferred Stock,
voting separately as a class, shall be necessary for the adoption
thereof, in addition to such other vote as may be required by the
Business Corporation Law of the State of Connecticut.
Section 11. FRACTIONAL SHARES. Series A Preferred Stock may be
issued in fractions of a share that shall entitle the holder, in
proportion to such holder's fractional shares, to exercise voting rights,
receive dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Preferred Stock.
The foregoing Amendment to the Company's Certificate of
Incorporation was adopted by the Board of Directors without shareholder
action. No shareholder vote was required for adoption.
IN WITNESS WHEREOF, the undersigned, being designated by the Board
of Directors of the Corporation, does hereby declare, under penalties of
false statement that the statements in the foregoing certificate are
true.
Dated this 16th day of April, 1999.
_______________________________
Name: Xxxxx X. Xxxxxx
Title: Executive Vice President
and Chief Financial Officer
EXHIBIT B
Form of Right Certificate
Certificate No. R-________ ______ Rights
NOT EXERCISABLE AFTER APRIL 15, 2009 OR EARLIER IF REDEMPTION
OR EXCHANGE OCCURS. THE RIGHTS ARE SUBJECT TO REDEMPTION AT
$.001 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN
THE RIGHTS AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY
PERSON WHO BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE
RIGHTS AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME
NULL AND VOID AND WILL NO LONGER BE TRANSFERABLE.
Right Certificate
CAI WIRELESS SYSTEMS, INC.
This certifies that ________________________ or registered
assigns, is the registered owner of the number of Rights set
forth above, each of which entitles the owner thereof, subject
to the terms, provisions and conditions of the Rights
Agreement, dated as of April 16, 1999 as the same may be
amended from time to time (the "Rights Agreement"), between CAI
Wireless Systems, Inc., a Connecticut corporation (the
"Company"), and ChaseMellon Shareholder Services, L.L.C. (the
"Rights Agent"), to purchase from the Company at any time after
the Distribution Date (as such term is defined in the Rights
Agreement) and prior to 5:00 P.M., New Jersey time, on April
15, 2009 at the office or agency of the Rights Agent designated
for such purpose, or of its successor as Rights Agent, one one-
hundredth of a fully paid non-assessable share of Series A
Preferred Stock, $.01 par value (the "Preferred Stock"), of the
Company, at a purchase price of $96.00 per one one-hundredth of
a share of Preferred Stock (the "Purchase Price"), upon
presentation and surrender of this Right Certificate with the
Form of Election to Purchase duly executed. The number of
Rights evidenced by this Rights Certificate (and the number of
one one-hundredths of a shares of Preferred Stock which may be
purchased upon exercise hereof) set forth above, and the
Purchase Price set forth above, are the number and Purchase
Price as of _______________ based on the Preferred Stock as
constituted at such date. As provided in the Rights Agreement,
the Purchase Price, the number of one one-hundredths of a share
of Preferred Stock (or other securities or property) which may
be purchased upon the exercise of the Rights and the number of
Rights evidenced by this Right Certificate are subject to
modification and adjustment upon the happening of certain
events.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and
conditions are hereby incorporated herein by reference and made a part
hereof and to which Rights Agreement reference is hereby made for a full
description of the rights, limitations of rights, obligations, duties and
immunities hereunder of the Rights Agent, the Company and the holders of
the Right Certificates. Copies of the Rights Agreement are on file at
the principal executive offices of the Company and the above-mentioned
office or agency of the Rights Agent. The Company will mail to the
holder of this Right Certificate a copy of the Rights Agreement without
charge after receipt of a written request therefor.
This Right Certificate, with or without other Right Certificates,
upon surrender at the office or agency of the Rights Agent designated for
such purpose, may be exchanged for another Right Certificate or Right
Certificates of like tenor and date evidencing Rights entitling the
holder to purchase a like aggregate number of shares of Preferred Stock
as the Rights evidenced by the Right Certificate or Right Certificates
surrendered shall have entitled such holder to purchase. If this Right
Certificate shall be exercised in part, the holder shall be entitled to
receive upon surrender hereof another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at a
redemption price of $.001 per Right or (ii) may be exchanged in whole or
in part for shares of Preferred Stock or shares of the Company's Common
Stock, $.01 par value.
No fractional shares of Preferred Stock or Common Stock will be
issued upon the exercise or exchange of any Right or Rights evidenced
hereby (other than fractions of Preferred Stock which are integral
multiples of one one-hundredth of a share of Preferred Stock, which may,
at the election of the Company, be evidenced by depositary receipts), but
in lieu thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of the
Preferred Stock or of any other securities of the Company which may at
any time be issuable on the exercise or exchange 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
shareholder of the Company or any right to vote for the election of
directors or upon any matter submitted to shareholders at any meeting
thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting shareholders
(except as provided in the Rights Agreement) or to receive dividends or
subscription rights, or otherwise, until the Right or Rights evidenced by
this Right certificate shall have been exercised as provided in the
Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ____________________.
ATTEST: CAI WIRELESS SYSTEMS, INC.
By ________________________ By___________________________
Name:
Countersigned: Title:
ChaseMellon Shareholder Services, L.L.C.
as Rights Agent
By_________________________
Authorized Signature
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED __________________________ hereby sells, assigns
and transfers unto
___________________________________________________________________________
(Please print name and address of transferee)
___________________________________________________________________________
Rights represented by this Right Certificate, together with all right,
title and interest therein, and does hereby irrevocably constitute and
appoint ____________ Attorney, to transfer said Rights on the books of
the within-named Company, with full power of substitution.
Dated: ________________
______________________________
Signature
(Signature must conform to holder specified on Right Certificate)
Signature Guaranteed:
Signatures must be guaranteed by a bank, trust company, broker,
dealer or other eligible institution participating in the Securities
Transfer Agent Medallion Program, the Stock Exchange Medallion Program or
the New York Stock Exchange, Inc. Medallion Signature Program.
-------------------------------------------------------------------------
---------------------------------
(To be completed)
The undersigned hereby certifies that the Rights evidenced by this
Right Certificate are not Beneficially Owned by, were not acquired by the
undersigned from, and are not being assigned to, an Acquiring Person or
an Affiliate or Associate thereof (as defined in the Rights Agreement).
______________________________
Signature
Form of Reverse Side of Right Certificate - continued
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to exercise
Rights represented by the Right Certificate)
To CAI Wireless System, Inc.:
The undersigned hereby irrevocably elects to exercise
__________________ Rights represented by this Right Certificate to
purchase the shares of Preferred Stock (or other securities or property)
issuable upon the exercise of such Rights and requests that certificates
for such shares of Preferred Stock (or such other securities) be issued
in the name of:
______________________________________________________________________________
(please print name and address)
______________________________________________________________________________
Please insert social security
or other identifying number
If such number of Rights shall not be all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance remaining of
such Rights shall be registered in the name of and delivered to:
______________________________________________________________________________
(Please print name and address)
______________________________________________________________________________
______________________________________________________________________________
(Please insert social security or other identifying number)
Dated:_____________________
_____________________________
Signature
(Signature must conform to holder specified on Right Certificate)
Signature Guaranteed:
Signature must be guaranteed by bank, trust company, broker, dealer
or other eligible institution participating in the Securities Transfer
Agent Medallion Program, the Stock Exchange Medallion Program or the New
York Stock Exchange, Inc. Medallion Signature Program.
Form of Reverse Side of Right Certificate - continued
(To be completed)
The undersigned certifies that the Rights evidenced by this Right
Certificate are not Beneficially Owned by, and were not acquired by the
undersigned from, an Acquiring Person or an Affiliate or Associate
thereof (as defined in the Rights Agreement)
________________________
Signature
NOTICE
The signature in the Form of Assignment or Form of Election to
Purchase, as the case may be, must conform to the name as written upon
the face of this Right Certificate in every particular, without
alteration or enlargement or any change whatsoever.
In the event the certification set forth above in the Form of
Assignment or the Form of Election to Purchase, as the case may be, is
not completed, such Assignment or Election to Purchase will not be
honored.
EXHIBIT C
UNDER CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS OWNED BY OR TRANSFERRED TO ANY PERSON WHO
BECOMES AN ACQUIRING PERSON (AS DEFINED IN THE RIGHTS
AGREEMENT) AND CERTAIN TRANSFEREES THEREOF WILL BECOME NULL AND
VOID AND WILL NO LONGER BE TRANSFERABLE.
SUMMARY OF RIGHTS TO PURCHASE
SHARES OF PREFERRED STOCK
On April 16, 1999 the Board of Directors of CAI Wireless Systems,
Inc. (the "Company") declared a dividend of one preferred share purchase
right (a "Right") for each outstanding share of common stock, $.01 par
value, of the Company (the "Common Stock"). The dividend is payable on
April 27, 1999 (the "Record Date") to the shareholders of record on that
date. Subject to certain terms and conditions, each Right shall entitle
the registered holder to purchase from the Company one one-hundredth of a
share of Series A Preferred Stock, $.01 par value (the "Preferred Stock")
of the Company at a price of $96.00 per one one-hundredth of a share of
Preferred Stock (the "Purchase Price"), subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement
dated as of April 16, 1999 as the same may be amended from time to time
(the "Rights Agreement"), between the Company and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent (the "Rights Agent").
Until the earlier to occur of (i) 10 days following a public
announcement that a person or group of affiliated or associated persons
(with certain exceptions an "Acquiring Person") have acquired beneficial
ownership of 15% or more of the outstanding shares of Common Stock or
(ii) 10 business days (or such later date as may be determined by action
of the Board of Directors prior to such time as any person or group of
affiliated persons becomes an Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender offer
or exchange offer the consummation of which would result in the
beneficial ownership by a person or group of 15% or more of the
outstanding shares of Common Stock (the earlier of such dates being
called the "Distribution Date"), the Rights will be evidenced, with
respect to any of the Common Stock certificates outstanding as of the
Record Date, by such Common Stock certificate together with a copy of
this Summary of Rights. The Rights Agreement provides that MCI WORLDCOM,
Inc. and its Affiliates and Associates and transferees of all of its
shares of Common Stock will not be considered to be an Acquiring Person.
The Rights Agreement provides that, until the Distribution Date (or
earlier redemption or expiration of the Rights), the Rights will be
transferred with and only with the Common Stock. Until the Distribution
Date (or earlier redemption or expiration of the Rights), new Common
Stock certificates issued after the Record Date upon transfer or new
issuances of Common Stock will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or earlier
redemption or expiration of the Rights), the surrender for transfer of
any certificates for shares of Common Stock outstanding as of the Record
Date, even without such notation or a copy of this Summary of Rights,
will also constitute the transfer of the Rights associated with the
shares of Common Stock represented by such certificate. As soon as
practicable following the Distribution Date, separate certificates
evidencing the Rights ("Right Certificates") will be mailed to holders of
record of the Common Stock as of the close of business on the
Distribution Date and such separate Right Certificates alone will
evidence the Rights.
The Rights are not exercisable until the Distribution Date. The
Rights will expire on April 15, 2009 (the "Final Expiration Date"),
unless the Final Expiration Date is advanced or extended or unless the
Rights are earlier redeemed or exchanged by the Company, in each case as
described below.
The Purchase Price payable, and the number of shares of Preferred
Stock or other securities or property issuable, upon exercise of the
Rights are subject to adjustment from time to time to prevent dilution
(i) in the event of a stock dividend on, or a subdivision, combination or
reclassification of, the Preferred Stock, (ii) upon the grant to holders
of the Preferred Stock of certain rights or warrants to subscribe for or
purchase Preferred Stock at a price, or securities convertible into
Preferred Stock with a conversion price, less than the then-current
market price of the Preferred Stock or (iii) upon the distribution to
holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular periodic cash dividends or dividends payable in
Preferred Stock) or of subscription rights or warrants (other than those
referred to above).
The number of outstanding Rights is also subject to adjustment in
the event of a stock split of the Common Stock or a stock dividend on the
Common Stock payable in shares of Common Stock or subdivisions,
consolidations or combinations of the Common Stock occurring, in any such
case, prior to the Distribution Date.
Shares of Preferred Stock purchasable upon exercise of the Rights
will not be redeemable. Each share of Preferred Stock will be entitled,
when, as and if declared, to a minimum preferential quarterly dividend
payment of $1 per share but will be entitled to an aggregate dividend of
100 times the dividend declared per share of Common Stock. In the event
of liquidation, dissolution or winding up of the Company, the holders of
the Preferred Stock will be entitled to a minimum preferential
liquidation payment of $100 per share (plus any accrued but unpaid
dividends) but will be entitled to an aggregate payment of 100 times the
payment made per share of Common Stock. Each share of Preferred Stock
will have 100 votes, voting together with the Common Stock. Finally, in
the event of any merger, consolidation or other transaction in which
shares of Common Stock are converted or exchanged, each share of
Preferred Stock will be entitled to receive 100 times the amount received
per share of Common Stock. These rights are protected by customary
antidilution provisions.
Because of the nature of the Preferred Stock's dividend, liquidation
and voting rights, the value of the one one-hundredth interest in a share
of Preferred Stock purchasable upon exercise of each Right should
approximate the value of one share of Common Stock.
In the event that any person or group of affiliated or associated
persons becomes an Acquiring Person, each holder of a Right, other than
Rights Beneficially Owned by the Acquiring Person (which will thereupon
become void), will thereafter have the right to receive upon exercise of
a Right at the then current exercise price of the Right, that number of
shares of Common Stock having a market value of two times the exercise
price of the Right.
In the event that, after a person or group has become an Acquiring
Person, the Company is acquired in a merger or other business combination
transaction or 50% or more of its consolidated assets or earning power
are sold, proper provision will be made so that each holder of a Right
(other than Rights Beneficially Owned by an Acquiring Person which will
have become void) will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that
number of shares of common stock of the person with whom the Company has
engaged in the foregoing transaction (or its parent), which number of
shares at the time of such transaction will have a market value of two
times the exercise price of the Right.
At any time after any person or group becomes an Acquiring Person
and prior to the occurrence of an event described in the prior paragraph,
the Board of Directors of the Company may exchange the Rights (other than
Rights owned by such person or group which will have become void), in
whole or in part, at an exchange ratio of one share of Common Stock, or
one one-hundredth of a share of Preferred Stock (or of a share of a class
or series of the Company's Preferred Stock or preferred stock having
equivalent rights, preferences and privileges), per Right (subject to
adjustment)
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least
1% in such Purchase Price. No fractional shares of Preferred Stock will
be issued (other than fractions which are integral multiples of one one-
hundredth of a share of Preferred Stock, which may, at the election of
the Company, be evidenced by depositary receipts) and in lieu thereof, an
adjustment in cash will be made based on the market price of the
Preferred Stock on the last trading day prior to the date of exercise.
At any time prior to the earlier of (i) the close of business on the
tenth day following the Stock Acquisition Date, subject to extension by
the Board, or (ii) the close of business on the Final Expiration Date,
the Board of Directors of the Company may redeem the Rights in whole, but
not in part, at a price of $.00l per Right (the "Redemption Price"). The
redemption of the Rights may be made effective at such time, on such
basis and with such conditions as the Board of Directors in its sole
discretion may establish. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only right of the
holders of Rights will be to receive the Redemption Price.
For so long as the Rights are then redeemable, the Company may,
except with respect to the redemption price, amend the Rights in any
manner. After the Rights are no longer redeemable, the Company may,
except with respect to the redemption price, amend the Rights in any
manner that does not adversely affect the interests of holders of the
Rights.
Until a Right is exercised, the holder thereof, as such, will have
no rights as a shareholder of the Company, including, without limitation,
the right to vote or to receive dividends.
A copy of the Rights Agreement has been filed with the Securities
and Exchange Commission as an Exhibit to a Registration Statement on Form
8-A. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights
Agreement, as the same may be amended from time to time, which is hereby
incorporated herein by reference.
