EXHIBIT 4.1
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RIGHTS AGREEMENT
Dated as of December 13, 1999
By and Between
Xxxxxx International Industries, Incorporated
and
ChaseMellon Shareholder Services, L.L.C.,
as Rights Agent
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RIGHTS AGREEMENT
This RIGHTS AGREEMENT, dated as of December 13, 1999 (this
"Agreement"), is made and entered into by and between Xxxxxx
International Industries, Incorporated, a Delaware corporation
(the "Company"), and ChaseMellon Shareholder Services, L.L.C., a
New Jersey limited liability company (the "Rights Agent").
RECITALS
WHEREAS, on December 13, 1999, the Board of the Company
authorized and declared a dividend distribution of one right (a
"Right") for each share of Common Stock, par value $.01 per
share, of the Company (a "Common Share") outstanding as of the
Close of Business (as hereinafter defined) on December 27, 1999
(the "Record Date"), each Right initially representing the right
to purchase one one-hundredth of a Preferred Share (as
hereinafter defined), on the terms and subject to the conditions
herein set forth, and further authorized and directed the
issuance of one Right (subject to adjustment as provided herein)
with respect to each Common Share issued or delivered by the
Company (whether originally issued or delivered from the
Company's treasury) after the Record Date but prior to the
earlier of the Distribution Date (as hereinafter defined) and the
Expiration Date (as hereinafter defined) or as provided in
Section 22.
NOW, THEREFORE, in consideration of the mutual agreements
herein set forth, the parties hereto hereby agree as follows:
1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" means any Person (other than the
Company or any Related Person) who or which, together with all
Affiliates and Associates of such Person, is the Beneficial Owner
of 15% or more of the then-outstanding Common Shares; provided,
however, that a Person will not be deemed to have become an
Acquiring Person solely as a result of a reduction in the number
of Common Shares outstanding unless and until such time as (i)
such Person or any Affiliate or Associate of such Person
thereafter becomes the Beneficial Owner of additional Common
Shares representing 1% or more of the then-outstanding Common
Shares, other than as a result of a stock dividend, stock split
or similar transaction effected by the Company in which all
holders of Common Shares are treated equally, or (ii) any other
Person who is the Beneficial Owner of Common Shares representing
1% or more of the then-outstanding Common Shares thereafter
becomes an Affiliate or Associate of such Person.
Notwithstanding the foregoing, if the Board of the Company
determines in good faith that a Person who would otherwise be an
"Acquiring Person" as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently,
and such Person divests as promptly as practicable a sufficient
number of Common Shares so that such Person would no longer be an
"Acquiring Person" as defined pursuant to the foregoing
provisions of this paragraph (a), then such Person shall not be
deemed to be an "Acquiring Person" for any purposes of this
Agreement.
(b) "Affiliate" and "Associate" will 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, provided however, that a Person will not
be deemed to be the Affiliate or Associate of another Person
solely because either or both Persons are or were Directors of
the Company.
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(c) A Person will be deemed the "Beneficial Owner" of, and
to "Beneficially Own," any securities:
(i) the beneficial ownership of which such Person or any of
such Person's Affiliates or Associates, directly or indirectly,
has the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in
writing), or upon the exercise of conversion rights, exchange
rights, warrants, options or other rights (in each case, other
than upon exercise or exchange of the Rights); provided, however,
that a Person will not be deemed the Beneficial Owner of, or to
Beneficially Own, securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange; or
(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has or shares the right to
vote or dispose of, including pursuant to any agreement,
arrangement or understanding (whether or not in writing); or
(iii) of which any other Person is the Beneficial Owner, if
such Person or any of such Person's Affiliates or Associates has
any agreement, arrangement or understanding (whether or not in
writing) with such other Person (or any of such other Person's
Affiliates or Associates) with respect to acquiring, holding,
voting or disposing of any securities of the Company;
provided, however, that a Person will not be deemed the
Beneficial Owner of, or to Beneficially Own, any security (A) if
such Person has the right to vote such security pursuant to an
agreement, arrangement or understanding (whether or not in
writing) which (1) arises solely from a revocable proxy 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 of the Exchange Act and (2) is not also then
reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report), or (B) if such beneficial
ownership arises solely as a result of such Person's status as a
"clearing agency," as defined in Section 3(a)(23) of the Exchange
Act; provided further, however, that nothing in this paragraph
(c) will cause a Person engaged in business as an underwriter of
securities to be the Beneficial Owner of, or to Beneficially Own,
any securities acquired through such Person's participation in
good faith in an underwriting syndicate until the expiration of
40 calendar days after the date of such acquisition, or such
later date as the Directors of the Company may determine in any
specific case.
(d) "Business Day" means any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New
York (or such other state in which any 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 means 5:00 P.M.,
Eastern time, on such date; provided, however, that if such date
is not a Business Day it means 5:00 P.M., Eastern time, on the
next succeeding Business Day.
(f) "Common Shares" when used with reference to the Company
means the shares of Common Stock, par value $.01 per share, of
the Company; provided,
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however, that, if the Company is the continuing or surviving
corporation in a transaction described in Section 13(a)(ii),
"Common Shares" when used with reference to the Company means
shares of the capital stock or units of the equity interests with
the greatest aggregate voting power of the Company. "Common
Shares" when used with reference to any corporation or other
legal entity other than the Company, including an Issuer, means
shares of the capital stock or units of the equity interests with
the greatest aggregate voting power of such corporation or other
legal entity.
(g) "Company" means Xxxxxx International Industries,
Incorporated, a Delaware corporation.
(h) "Distribution Date" means the earlier of: (i) the
Close of Business on the tenth calendar day following the Share
Acquisition Date, or (ii) the Close of Business on the tenth
Business Day (or, unless the Distribution Date shall have
previously occurred, such later date as may be specified by the
Board of Directors of the Company) after the commencement of a
tender or exchange offer by any Person (other than the Company or
any Related Person), if upon the consummation thereof such Person
would be the Beneficial Owner of 15% or more of the
then-outstanding Common Shares.
(i) "Exchange Act" means the Securities Exchange Act of
1934, as amended.
(j) "Expiration Date" means the earliest of (i) the Close
of Business on the Final Expiration Date, (ii) the time at which
the Rights are redeemed as provided in Section 23, and (iii) the
time at which all exercisable Rights are exchanged as provided in
Section 24.
(k) "Final Expiration Date" means the tenth anniversary of
the Record Date.
(l) "Flip-in Event" means any event described in clauses
(A), (B) or (C) of Section 11(a)(ii).
(m) "Flip-over Event" means any event described in clauses
(i), (ii) or (iii) of Section 13(a).
(n) "Issuer" has the meaning set forth in Section 13(b).
(o) "Nasdaq" means The NASDAQ Stock Market.
(p) "Person" means any individual, firm, corporation or
other legal entity, and includes any successor (by merger or
otherwise) of such entity.
(q) "Preferred Shares" means shares of Series A Junior
Participating Preferred Stock, par value $.01 per share, of the
Company having the rights and preferences set forth in the form
of Certificate of Designation of Series A Junior Participating
Preferred Stock attached as Exhibit A.
(r) "Purchase Price" means initially $250 per one one-
hundredth of a Preferred Share, subject to adjustment from time
to time as provided in this Agreement.
(s) "Record Date" has the meaning set forth in the Recitals
to this Agreement.
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(t) "Redemption Price" means $.01 per Right, subject to
adjustment by resolution of the Board of Directors of the Company
to reflect any stock split, stock dividend or similar transaction
occurring after the Record Date.
(u) "Related Person" means (i) any Subsidiary of the
Company or (ii) any employee benefit or stock ownership plan of
the Company or of any Subsidiary of the Company or any entity
holding Common Shares for or pursuant to the terms of any such
plan.
(v) "Right" has the meaning set forth in the Recitals to
this Agreement.
(w) "Right Certificates" means certificates evidencing the
Rights, in substantially the form attached as Exhibit B.
(x) "Rights Agent" means ChaseMellon Shareholder Services,
L.L.C., a New Jersey limited liability company, unless and until
a successor Rights Agent has become such pursuant to the terms of
this Agreement, and thereafter, "Rights Agent" means such
successor Rights Agent.
(y) "Securities Act" means the Securities Act of 1933, as
amended.
(z) "Share Acquisition Date" means the first date of public
announcement by the Company (by press release, filing made with
the Securities and Exchange Commission or otherwise) that an
Acquiring Person has become such.
(aa) "Subsidiary" when used with reference to any Person
means any corporation or other legal entity of which a majority
of the voting power of the voting equity securities or equity
interests is owned, directly or indirectly, by such Person;
provided, however, that for purposes of Section 13(b),
"Subsidiary" when used with reference to any Person means any
corporation or other legal entity of which at least 20% of the
voting power of the voting equity securities or equity interests
is owned, directly or indirectly, by such Person.
(bb) "Trading Day" means any day on which the principal
national securities exchange on which the Common Shares are
listed or admitted to trading is open for the transaction of
business or, if the Common Shares are not listed or admitted to
trading on any national securities exchange, a Business Day.
(cc) "Triggering Event" means any Flip-in Event or
Flip-over Event.
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 and hereby certifies that
it complies with the requirements of the New York Stock
Exchange governing transfer agents and registrars. The Company
may from time to time act as Co-Rights Agent or appoint such
Co-Rights Agents as it may deem necessary or desirable. The
Rights Agent shall have no duty to supervise, and in no event
shall be liable for the acts or omissions of any such Co-Rights
Agent. Any actions which may be taken by the Rights Agent
pursuant to the terms of this Agreement may be taken by any such
Co-Rights Agent. To the extent that any Co-Rights Agent takes
any action pursuant to this Agreement, such Co-Rights Agent will
be entitled to all of the rights and protections of, and subject
to all of the
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applicable duties and obligations imposed upon, the Rights Agent
pursuant to the terms of this Agreement.
3. Issue of Right Certificates. (a) Until the Distribution
Date, (i) the Rights will be evidenced by the certificates
representing Common Shares registered in the names of the record
holders thereof (which certificates representing Common Shares
will also be deemed to be Right Certificates), (ii) the Rights
will be transferable only in connection with the transfer of the
underlying Common Shares, and (iii) the surrender for transfer of
any certificates evidencing Common Shares in respect of which
Rights have been issued will also constitute the transfer of the
Rights associated with the Common Shares evidenced by such
certificates.
(b) Rights will be issued by the Company in respect of all
Common Shares (other than Common Shares issued upon the exercise
or exchange of any Right) issued or delivered by the Company
(whether originally issued or delivered from the Company's
treasury) after the Record Date but prior to the earlier of the
Distribution Date and the Expiration Date. Certificates
evidencing such Common Shares will have stamped on, impressed on,
printed on, written on, or otherwise affixed to them the
following legend or such similar legend as the Company may deem
appropriate, which do not affect the duties or responsibilities
of the Rights Agent and as is not inconsistent with the
provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange or transaction reporting system on which the Common
Shares may from time to time be listed or quoted, or to conform
to usage:
This Certificate also evidences and entitles the holder hereof to
certain Rights as set forth in a Rights Agreement between Xxxxxx
International Industries, Incorporated and ChaseMellon
Shareholder Services, L.L.C., dated as of December 13, 1999 (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 Xxxxxx International Industries,
Incorporated. The Rights are not exercisable prior to the
occurrence of certain events specified in the Rights Agreement.
Under certain circumstances, as set forth in the Rights
Agreement, such Rights may be redeemed, may be exchanged, may
expire, may be amended, or may be evidenced by separate
certificates and no longer be evidenced by this Certificate.
Xxxxxx International Industries, Incorporated will mail to the
holder of this Certificate a copy of the Rights Agreement, as in
effect on the date of mailing, without charge promptly after
receipt of a written request therefor. Under certain
circumstances as set forth in the Rights Agreement, Rights that
are or were beneficially owned by an Acquiring Person or any
Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement) may become null and void.
(c) Any Right Certificate issued pursuant to this Section 3
that represents Rights beneficially owned by an Acquiring Person
or any Associate or Affiliate thereof and any Right Certificate
issued at any time upon the transfer of any Rights to an
Acquiring Person or any Associate or Affiliate thereof or to any
nominee of such Acquiring Person, Associate or Affiliate and any
Right Certificate issued pursuant to Section 6 or 11 hereof upon
transfer, exchange, replacement or adjustment of any other Right
Certificate referred to in this sentence, shall be subject to and
contain the following legend or such similar legend as the
Company
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may deem appropriate and as is not inconsistent with the
provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or
to conform to usage:
The Rights represented by this Right Certificate are or were
beneficially owned by a Person who was an Acquiring Person or an
Affiliate or an Associate of an Acquiring Person (as such terms
are defined in the Rights Agreement). This Right Certificate and
the Rights represented hereby may become null and void in the
circumstances specified in Section 11(a)(ii) or Section 13 of the
Rights Agreement.
(d) As promptly 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
information reasonably necessary for such purpose, send), by
first class, insured, postage prepaid mail, to each record holder
of Common Shares as of the Close of Business on the Distribution
Date, at the address of such holder shown on the records of the
Company, a Right Certificate evidencing one Right for each Common
Share so held, subject to adjustment as provided herein. As of
and after the Distribution Date, the Rights will be evidenced
solely by such Right Certificates.
(e) In the event that the Company purchases or otherwise
acquires any Common Shares after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Shares
will be deemed canceled and retired so that the Company will not
be entitled to exercise any Rights associated with the Common
Shares so purchased or acquired.
4. Form of Right Certificates. The Right Certificates (and
the form of election to purchase and the form of assignment to be
printed on the reverse thereof) will be substantially in the form
attached as Exhibit B with such changes and 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 any stock
exchange or transaction reporting system on which the Rights may
from time to time be listed or quoted, or to conform to usage.
Subject to the provisions of Section 22, the Right Certificates,
whenever issued, on their face will entitle the holders thereof
to purchase such number of one one-hundredths of a Preferred
Share as are set forth therein at the Purchase Price set forth
therein, but the Purchase Price, the number and kind of
securities issuable upon exercise of each Right and the number of
Rights outstanding will be subject to adjustment as provided
herein.
5. Countersignature and Registration.(a) The Right
Certificates will be executed on behalf of the Company by its
Chairman of the Board, its President or any Vice President,
either manually or by facsimile signature, and will have affixed
thereto the Company's seal or a facsimile thereof which will be
attested by the Secretary or an Assistant Secretary of the
Company, either manually or by facsimile signature. The Right
Certificates will be manually countersigned by the Rights Agent
and will not be valid for any purpose unless so countersigned.
In
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case any officer of the Company who signed any of the Right
Certificates ceases 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, is a proper officer of
the Company to sign such Right Certificate, although at the date
of the execution of this Rights Agreement any such person was not
such officer.
(b) Following the Distribution Date and receipt by the
Rights Agent of all necessary information, the Rights Agent will
keep or cause to be kept, at the office of the Rights Agent
designated for such purpose and at such other offices as may be
required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation
of any stock exchange or any transaction reporting system on
which the Rights may from time to time be listed or quoted, books
for registration and transfer of the Right Certificates issued
hereunder. Such books will 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.
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(d)
and 14, at any time after the Close of Business on the
Distribution Date and prior to the Expiration Date, any Right
Certificate or Right Certificates representing exercisable Rights
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
Preferred Share (or other securities, as the case may be) as the
Right Certificate or Right Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer, split up,
combine or exchange any such Right Certificate or Rights
Certificates must make such request in a writing delivered to the
Rights Agent and must surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged
at the principal office of the Rights Agent designated for such
purpose. Thereupon or as promptly as practicable thereafter,
subject to the provisions of Sections 7(d) and 14, the Company
will prepare, execute and deliver to the Rights Agent, and the
Rights Agent will countersign and deliver, a Right Certificate or
Right Certificates, as the case may be, as so requested. The
Company may require payment of 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. The
Rights Agent shall have no duty or obligation under this Section
6(a) unless and until it is reasonably satisfied that all such
taxes and charges have been paid.
(b) Upon receipt by the Company and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate and, in case of
loss, theft or destruction, of indemnity or security reasonably
satisfactory to them, and, if requested by the Company,
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 prepare, execute and deliver a new
Right Certificate of like tenor to the Rights Agent and the
Rights Agent will countersign and deliver
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such new Right Certificate to the registered holder in lieu of
the Right Certificate so lost, stolen, destroyed or mutilated.
7. Exercise of Rights; Purchase Price; Expiration Date of
Rights. (a) The registered holder of any Right Certificate may
exercise the Rights evidenced thereby (except as otherwise
provided herein) in whole or in part at any time after the
Distribution Date and prior to the Expiration Date, upon
surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such
purpose, together with payment in cash, in lawful money of the
United States of America by certified check or bank draft payable
to the order of the Company, equal to the sum of (i) the exercise
price for the total number of securities as to which such
surrendered Rights are exercised and (ii) an amount equal to any
applicable taxes and charges required to be paid by the holder of
such Right Certificate in accordance with the provisions of
Section 9(d).
(b) Upon receipt of a Right Certificate representing
exercisable Rights with the form of election to purchase duly and
properly executed, accompanied by payment as described above, the
Rights Agent will promptly (i) requisition from any transfer
agent of the Preferred Shares (or make available, if the Rights
Agent is the transfer agent) certificates representing the number
of one one-hundredths of a Preferred Share to be purchased (and
the Company hereby irrevocably authorizes and directs its
transfer agent to comply with all such requests), or, if the
Company elects to deposit Preferred Shares issuable upon exercise
of the Rights hereunder with a depositary agent, requisition from
the depositary agent depositary receipts representing such number
of one one-hundredths of a Preferred Share as are to be purchased
(and the Company hereby irrevocably authorizes and directs such
depositary agent to comply with all such requests), (ii) after
receipt of such certificates (or depositary receipts, as the case
may be), 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, (iii)
when appropriate, requisition from the Company or any transfer
agent therefor (or make available, if the Rights Agent is the
transfer agent) certificates representing the number of
equivalent common shares to be issued in lieu of the issuance of
Common Shares in accordance with the provisions of Section
11(a)(iii), (iv) when appropriate, after receipt of such
certificates, 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, (v) when
appropriate, requisition from the Company the amount of cash to
be paid in lieu of the issuance of fractional shares in
accordance with the provisions of Section 14 or in lieu of the
issuance of Common Shares in accordance with the provisions of
Section 11(a)(iii), (vi) when appropriate, after receipt, deliver
such cash to or upon the order of the registered holder of such
Right Certificate, and (vii) when appropriate, deliver any due
xxxx or other instrument provided to the Rights Agent by the
Company for delivery to the registered holder of such Right
Certificate as provided by Section 11(l).
(c) In case the registered holder of any Right Certificate
exercises less than all the Rights evidenced thereby, the Company
will prepare, execute and deliver a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised
and the Rights Agent will countersign and deliver such new Right
Certificate to the registered holder of such Right Certificate or
to his duly authorized assigns, subject to the provisions of
Section 14.
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(d) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company will be
obligated to undertake any action with respect to any purported
transfer, split up, combination or exchange of any Right
Certificate pursuant to Section 6 or exercise of a Right
Certificate as set forth in this Section 7 unless the registered
holder of such Right Certificate has (i) completed and signed the
certificate following the form of assignment or the form of
election to purchase, as applicable, set forth on the reverse
side of the Right Certificate surrendered for such transfer,
split up, combination, exchange or exercise and (ii) provided
such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof
as the Company or the Rights Agent may reasonably request.
8. Cancellation and Destruction of Right Certificates. All
Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange will, if surrendered
to the Company or to any of its stock transfer agents, be
delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, will be canceled by
it, and no Right Certificates will be issued in lieu thereof
except as expressly permitted by the provisions of this
Agreement. The Company will deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent will so cancel
and retire, any other Right Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights
Agent will deliver all canceled Right Certificates to the
Company, or will, at the written request of the Company, destroy
such canceled Right Certificates, and in such case will deliver a
certificate of destruction thereof to the Company.
9. Company Covenants Concerning Securities and Rights. The
Company covenants and agrees that:
(a) It will cause to be reserved and kept available out of
its authorized and unissued Preferred Shares or any Preferred
Shares held in its treasury, a number of Preferred Shares that
will be sufficient to permit the exercise in full of all
outstanding Rights in accordance with Section 7.
(b) So long as the Preferred Shares (and, following the
occurrence of a Triggering Event, Common Shares and/or other
securities) issuable upon the exercise of the Rights may be
listed on a national securities exchange, or quoted on Nasdaq, it
will endeavor to cause, from and after such time as the Rights
become exercisable, all securities reserved for issuance upon the
exercise of Rights to be listed on such exchange, or quoted on
Nasdaq, upon official notice of issuance upon such exercise.
(c) It will take all such action as may be necessary to
ensure that all Preferred Shares (and, following the occurrence
of a Triggering Event, Common Shares and/or other securities)
delivered upon exercise of Rights, at the time of delivery of the
certificates for such securities, will be (subject to payment of
the Purchase Price) duly authorized, validly issued, fully paid
and nonassessable securities.
(d) It will pay when due and payable any and all federal
and state taxes and charges that may be payable in respect of the
issuance or delivery of the Right Certificates and of any
certificates
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representing securities issued upon the exercise of Rights;
provided, however, that the Company will not 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
representing securities issued upon the exercise of Rights 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
representing securities issued upon the exercise of any Rights
until any such tax or charge has been paid (any such tax or
charge being payable by the holder of such Right Certificate at
the time of surrender) or until it has been established to the
Company's reasonable satisfaction that no such tax or charge is
due.
(e) It will use its best efforts (i) to file on an
appropriate form, as soon as practicable following the later of
the Share Acquisition Date and the Distribution Date, a
registration statement under the Securities Act with respect to
the securities issuable upon exercise of the Rights, (ii) to
cause such registration statement to become effective as soon as
practicable after such filing, and (iii) to cause such
registration statement to remain effective (with a prospectus at
all times meeting the requirements of the Securities Act) until
the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the Expiration Date. The
Company will also take such action as may be appropriate under,
or to ensure compliance with, the securities or "blue sky" laws
of the various states in connection with the exercisability of
the Rights. The Company may temporarily suspend, for a period of
time after the date set forth in clause (i) of the first sentence
of this Section 9(e), the exercisability of the Rights in order
to prepare and file such registration statement and to permit it
to become effective. Upon any such suspension, the Company will
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, with prompt notice thereof, in each such case, to the
Rights Agent. In addition, if the Company determines that a
registration statement should be filed under the Securities Act
or any state securities laws following the Distribution Date, the
Company may temporarily suspend the exercisability of the Rights
in each relevant jurisdiction until such time as a registration
statement has been declared effective and, upon any such
suspension, the Company will 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, with prompt notice thereof, in
each such case, to the Rights Agent. Notwithstanding anything in
this Agreement to the contrary, the Rights will not be
exercisable in any jurisdiction if the requisite registration or
qualification in such jurisdiction has not been effected or the
exercise of the Rights is not permitted under applicable law.
(f) Notwithstanding anything in this Agreement to the
contrary, after the later of the Share Acquisition Date and the
Distribution Date it will not 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 eliminate or
otherwise diminish the benefits intended to be afforded by the
Rights.
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(g) In the event that the Company is obligated to issue
other securities of the Company and/or pay cash pursuant to
Section 11, 13, 14 or 24 it will make all arrangements necessary
so that such other securities and/or cash are available for
distribution by the Rights Agent, if and when appropriate.
10. Record Date. Each Person in whose name any certificate
representing Preferred Shares (or Common Shares and/or other
securities, as the case may be) is issued upon the exercise of
Rights will for all purposes be deemed to have become the holder
of record of the Preferred Shares (or Common Shares and/or other
securities, as the case may be) represented thereby on, and such
certificate will be dated, the date upon which the Right
Certificate evidencing such Rights was duly surrendered and
payment of the Purchase Price (and all applicable taxes and
charges) was made; provided, however, that if the date of such
surrender and payment is a date upon which the transfer books of
the Company for the Preferred Shares (or Common Shares and/or
other securities, as the case may be) are closed, such Person
will be deemed to have become the record holder of such
securities on, and such certificate will be dated, the next
succeeding Business Day on which the transfer books of the
Company for the Preferred Shares (or Common Shares and/or other
securities, as the case may be) are open. Prior to the exercise
of the Rights evidenced thereby, the holder of a Right
Certificate will not be entitled to any rights of a holder of any
security for which the Rights are or may become exercisable,
including, without limitation, the right to vote, to receive
dividends or other distributions, or to exercise any preemptive
rights, and will not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
11. Adjustment of Purchase Price, Number and Kind of
Securities or Number of Rights. The Purchase Price, the number
and kind of securities issuable 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 that the Company at any time after the
Record Date (A) declares a dividend on the Preferred Shares
payable in Preferred Shares, (B) subdivides the outstanding
Preferred Shares, (C) combines the outstanding Preferred Shares
into a smaller number of Preferred Shares, or (D) issues any
shares of its capital stock in a reclassification of the
Preferred Shares (including any such reclassification in
connection with a consolidation or merger in which the Company is
the continuing or surviving corporation), except as otherwise
provided in this Section 11(a), the Purchase Price in effect at
the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification and/or
the number and/or kind of shares of capital stock issuable on
such date upon exercise of a Right, will be proportionately
adjusted so that the holder of any Right exercised after such
time is entitled to receive upon payment of the Purchase Price
then in effect 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 transfer books of the Company
for the Preferred Shares were open, the holder of such Right
would have owned upon such exercise (and, in the case of a
reclassification, would have retained after giving effect to such
reclassification) and would have been entitled to receive by
virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock
issuable upon exercise of one Right. If an event occurs which
would require an adjustment under both this
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Section 11(a)(i) and Section 11(a)(ii) or Section 13, the
adjustment provided for in this Section 11(a)(i) will be in
addition to, and will be made prior to, any adjustment required
pursuant to Section 11(a)(ii) or Section 13.
(ii) Subject to the provisions of Section 24, if:
(A) any Person becomes an Acquiring Person; or
(B) any Acquiring Person or any Affiliate or Associate of
any Acquiring Person, directly or indirectly, (1) merges into the
Company or otherwise combines with the Company and the Company is
the continuing or surviving corporation of such merger or
combination (other than in a transaction subject to Section 13),
(2) merges or otherwise combines with any Subsidiary of the
Company, (3) in one or more transactions (otherwise than in
connection with the exercise, exchange or conversion of
securities exercisable or exchangeable for or convertible into
shares of any class of capital stock of the Company or any of its
Subsidiaries) transfers cash, securities or any other property to
the Company or any of its Subsidiaries in exchange (in whole or
in part) for shares of any class of capital stock of the Company
or any of its Subsidiaries or for securities exercisable or
exchangeable for or convertible into shares of any class of
capital stock of the Company or any of its Subsidiaries, or
otherwise obtains from the Company or any of its Subsidiaries,
with or without consideration, any additional shares of any class
of capital stock of the Company or any of its Subsidiaries or
securities exercisable or exchangeable for or convertible into
shares of any class of capital stock of the Company or any of its
Subsidiaries (otherwise than as part of a pro rata distribution
to all holders of shares of any class of capital stock of the
Company, or any of its Subsidiaries), (4) sells, purchases,
leases, exchanges, mortgages, pledges, transfers or otherwise
disposes (in one or more transactions) to, from, with or of, as
the case may be, the Company or any of its Subsidiaries
(otherwise than in a transaction subject to Section 13), any
property, including securities, on terms and conditions less
favorable to the Company than the Company would be able to obtain
in an arm's-length transaction with an unaffiliated third party,
(5) receives any compensation from the Company or any of its
Subsidiaries other than compensation as a director or a regular
full-time employee, in either case at rates consistent with the
Company's (or its Subsidiaries') past practices, or (6) receives
the benefit, directly or indirectly (except proportionately as a
stockholder), of any loans, advances, guarantees, pledges or
other financial assistance or any tax credits or other tax
advantage provided by the Company or any of its Subsidiaries; or
(C) during such time as there is an Acquiring Person, there
is any reclassification of securities of the Company (including
any reverse stock split), or any recapitalization of the Company,
or any merger or consolidation of the Company with any of its
Subsidiaries, or any other transaction or series of transactions
involving the Company or any of its Subsidiaries (whether or not
with or into or otherwise involving an Acquiring Person), other
than a transaction subject to Section 13, which has the effect,
directly or indirectly, of increasing by more than 1% the
proportionate share of the outstanding shares of any class of
equity securities of the Company or any of its Subsidiaries, or
of securities exercisable or exchangeable for or convertible into
equity securities of
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the Company or any of its Subsidiaries, of which an Acquiring
Person, orany Affiliate or Associate of any Acquiring Person, is
the Beneficial Owner; then, and in each such case, from and after
the latest of the Distribution Date, the Share Acquisition Date
and the date of the occurrence of such Flip-in Event, proper
provision will be made so that each holder of a Right, except as
provided below, will thereafter have the right to receive, upon
exercise thereof in accordance with the terms of this Agreement
at an exercise price per Right equal to the product of the then-
current Purchase Price multiplied by the number of one one-
hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the date of the occurrence of such Flip-in
Event (or, if any other Flip-in Event shall have previously
occurred, the product of the then-current Purchase Price
multiplied by the number of one one-hundredths of a Preferred
Share for which a Right was exercisable immediately prior to the
date of the first occurrence of a Flip-in Event), in lieu of
Preferred Shares, such number of Common Shares as equals the
result obtained by (x) multiplying the then-current Purchase
Price by the number of one one-hundredths of a Preferred Share
for which a Right was exercisable immediately prior to the date
of the occurrence of such Flip-in Event (or, if any other Flip-in
Event shall have previously occurred, multiplying the then-
current Purchase Price by the number of one one-hundredths of a
Preferred Share for which a Right was exercisable immediately
prior to the date of the first occurrence of a Flip-in Event),
and dividing that product by (y) 50% of the current per share
market price of the Common Shares (determined pursuant to Section
11(d)) on the date of the occurrence of such Flip-in Event.
Notwithstanding anything in this Agreement to the contrary, from
and after the first occurrence of a Flip-in Event, any Rights
that are Beneficially Owned by (A) any Acquiring Person (or any
Affiliate or Associate of any Acquiring Person), (B) a transferee
of any Acquiring Person (or any such Affiliate or Associate) who
becomes a transferee after the occurrence of a Flip-in Event, or
(C) a transferee of any Acquiring Person (or any such Affiliate
or Associate) who became a transferee prior to or concurrently
with the occurrence of a Flip-in Event pursuant to either (1) a
transfer from an 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 (2) a transfer which the Directors of the Company have
determined is part of a plan, arrangement or understanding which
has the purpose or effect of avoiding the provisions of this
Section 11(a)(ii), and subsequent transferees of any of such
Persons, will be null and void without any further action and any
holder of such Rights will thereafter have no rights whatsoever
with respect to such Rights under any provision of this
Agreement. The Company will use all reasonable efforts to ensure
that the provisions of this Section 11(a)(ii) are complied with,
but will have no liability to any holder of Right Certificates or
any 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. Upon the
occurrence of a Flip-in Event, no Right Certificate that
represents Rights that are or have become null and void pursuant
to the provisions of this Section 11(a)(ii) will thereafter be
issued pursuant to Section 3 or Section 6, 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) will be canceled. Upon the occurrence
of a Flip-over Event, any Rights that shall not have been
previously
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exercised pursuant to this Section 11(a)(ii) shall thereafter be
exercisable only pursuant to Section 13 and not pursuant to this
Section 11(a)(ii).
(iii) Upon the occurrence of a Flip-in Event, if there are
not sufficient Common Shares authorized but unissued or issued
but not outstanding to permit the issuance of all the Common
Shares issuable in accordance with Section 11(a)(ii) upon the
exercise of a Right, the Board of Directors of the Company will
use its best efforts promptly to authorize and, subject to the
provisions of Section 9(e), make available for issuance
additional Common Shares or other equity securities of the
Company having equivalent voting rights and an equivalent value
(as determined in good faith by the Board of Directors of the
Company) to the Common Shares (for purposes of this Section
11(a)(iii), "equivalent common shares"). In the event that
equivalent common shares are so authorized, upon the exercise of
a Right in accordance with the provisions of Section 7, the
registered holder will e entitled to receive (A) Common Shares,
to the extent any are available, and (B) a number of equivalent
common shares, which the Board of Directors of the Company has
determined in good faith to have a value equivalent to the excess
of (x) the aggregate current per share market value on the date
of the occurrence of the most recent Flip-in Event of all the
Common Shares issuable in accordance with Section 11(a)(ii) upon
the exercise of a Right (the "Exercise Value") over (y) the
aggregate current per share market value on the date of the
occurrence of the most recent Flip-in Event of any Common Shares
available for issuance upon the exercise of such Right; provided,
however, that if at any time after 90 calendar days after the
latest of the Share Acquisition Date, the Distribution Date and
the date of the occurrence of the most recent Flip-in Event,
there are not sufficient Common Shares and/or equivalent common
shares available for issuance upon the exercise of a Right, then
the Company will be obligated to deliver, upon the surrender of
such Right and without requiring payment of the Purchase Price,
Common Shares (to the extent available), equivalent common shares
(to the extent available) and then cash (to the extent permitted
by applicable law and any agreements or instruments to which the
Company is a party in effect immediately prior to the Share
Acquisition Date), which securities and cash have an aggregate
value equal to the excess of (1) the Exercise Value over (2) the
product of the then-current Purchase Price multiplied by the
number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to the date of the
occurrence of the most recent Flip-in Event (or, if any other
Flip-in Event shall have previously occurred, the product of the
then-current Purchase Price multiplied by the number of one one-
hundredths of a Preferred Share for which a Right would have been
exercisable immediately prior to the date of the occurrence of
such Flip-in Event if no other Flip-in Event had previously
occurred). To the extent that any legal or contractual
restrictions prevent the Company from paying the full amount of
cash payable in accordance with the foregoing sentence, the
Company will pay to holders of the Rights as to which such
payments are being made all amounts which are not then restricted
on a pro rata basis and will continue to make payments on a pro
rata basis as promptly as funds become available until the full
amount due to each such Rights holder has been paid.
(b) In the event that the Company fixes a record date for
the issuance of rights, options or warrants to all holders of
Preferred Shares entitling them (for a period expiring within 45
calendar days after such record date) to subscribe for or
purchase Preferred Shares (or securities having equivalent
rights, privileges and preferences as the Preferred Shares (for
purposes of this Section 11(b), "equivalent preferred shares"))
or securities convertible into Preferred Shares or equivalent
preferred shares at a price per Preferred Share or equivalent
preferred share (or having a conversion price per share, if a
security convertible into
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Preferred Shares or equivalent preferred shares) less than the
current per share market price of the Preferred Shares
(determined pursuant to Section 11(d)) on such record date, the
Purchase Price to be in effect after such record date will be
determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which is the number of Preferred Shares outstanding
on such record date plus the number of Preferred Shares which the
aggregate offering price of the total number of Preferred Shares
and/or equivalent preferred shares so to be offered (and/or the
aggregate initial conversion price of the convertible securities
so to be offered) would purchase at such current per share market
price and the denominator of which is the number of Preferred
Shares outstanding on such record date plus the number of
additional Preferred Shares and/or equivalent preferred shares to
be offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible); provided, however, that in no event shall the
consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of capital stock
issuable upon exercise of one Right. In case such subscription
price may be paid in a consideration part or all of which is in a
form other than cash, the value of such consideration will be as
determined in good faith by the Board of Directors of the
Company, whose determination will be described in a statement
filed with the Rights Agent. Preferred Shares owned by or held
for the account of the Company will not be deemed outstanding for
the purpose of any such computation. Such adjustment will 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 will be adjusted to be the Purchase
Price which would then be in effect if such record date had not
been fixed.
(c) In the event that the Company fixes a record date for
the making of a distribution to all holders of Preferred Shares
(including any such distribution made in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation) of evidences of indebtedness, cash (other
than a regular periodic cash dividend), assets, stock (other than
a dividend payable in Preferred Shares) or subscription rights,
options or warrants (excluding those referred to in Section
11(b)), the Purchase Price to be in effect after such record date
will be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which is the current per share market price of the
Preferred Shares (as determined pursuant to Section 11(d)) on
such record date or, if earlier, the date on which Preferred
Shares begin to trade on an ex-dividend or when issued basis for
such distribution, less the fair market value (as determined in
good faith by the Board of Directors of the Company, whose
determination will be described in a statement filed with the
Rights Agent) of the portion of the evidences of indebtedness,
cash, assets or stock so to be distributed or of such
subscription rights, options or warrants applicable to one
Preferred Share, and the denominator of which is such current per
share market price of the Preferred Shares; provided, however,
that in no event shall the consideration to be paid upon the
exercise of one Right be less than the aggregate par value of the
shares of capital stock issuable upon exercise of one Right.
Such adjustments will be made successively whenever such a record
date is fixed; and in the event that such distribution is not so
made, the Purchase Price will again be adjusted to be the
Purchase Price which would then be in effect if such record date
had not been fixed.
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(d) (i) For the purpose of any computation hereunder, the
"current per share market price" of Common Shares on any date
will be deemed to be the average of the daily closing prices per
share of such Common Shares for the 30 consecutive Trading Days
immediately prior to but not including such date; provided,
however, that in the event that the current per share market
price of the Common Shares is determined during a period
following the announcement by the issuer of such Common Shares of
(A) a dividend or distribution on such Common Shares payable in
such Common Shares or securities convertible into such Common
Shares (other than the Rights) or (B) any subdivision,
combination or reclassification of such Common Shares, and prior
to the expiration of 30 Trading Days after but not including the
ex-dividend date for such dividend or distribution, or the record
date for such subdivision, combina-tion or reclassification,
then, and in each such case, the current per share market price
will be appropriately adjusted to take into account ex-dividend
trading or to reflect the current per share market price per
Common Share equivalent. The closing price for each day will 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 Common Shares 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 Common Shares are listed or admitted to
trading or, if the Common Shares 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 Common Shares are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Shares
selected by the Board of Directors of the Company. If the Common
Shares are not publicly held or not so listed or traded, or are
not the subject of available bid and asked quotes, "current per
share market price" will mean the fair value per share as
determined in good faith by the Board of Directors of the
Company, whose determination will be described in a statement
filed with the Rights Agent.
(ii) For the purpose of any computation hereunder, the
"current per share market price" of the Preferred Shares will be
determined in the same manner as set forth above for Common
Shares in Section 11(d)(i), other than the last sentence thereof.
If the current per share market price of the Preferred Shares
cannot be determined in the manner provided above, the "current
per share market price" of the Preferred Shares will be
conclusively deemed to be an amount equal to the current per
share market price of the Common Shares multiplied by one hundred
(as such number may be appropriately adjusted to reflect events
such as stock splits, stock dividends, recapitalizations or
similar transactions relating to the Common Shares occurring
after the date of this Agreement). If neither the Common Shares
nor the Preferred Shares are publicly held or so listed or
traded, or the subject of available bid and asked quotes,
"current per share market price" of the Preferred Shares will
mean the fair value per share as determined in good faith by the
Board of Directors of the Company, whose determination will be
described in a statement filed with the Rights Agent. For all
purposes of this Agreement, the current per share market price of
one one-hundredth of a Preferred Share will be equal to the
current per share market price of one Preferred Share divided by
one hundred.
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(e) Except as set forth below, no adjustment in the
Purchase Price will be required unless such adjustment would
require an increase or decrease of at least 1% in such price;
provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made will be carried forward
and taken into account in any subsequent adjustment. All
calculations under this Section 11 will be made to the nearest
cent or to the nearest one one-millionth of a Preferred Share or
one ten-thousandth of a Common Share or other security, as the
case may be. Notwithstanding the first sentence of this Section
11(e), any adjustment required by this Section 11 will be made no
later than the earlier of (i) three years from the date of the
transaction which requires such adjustment and (ii) the
Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a), the holder of any Right thereafter exercised
becomes entitled to receive any securities of the Company other
than Preferred Shares, thereafter the number and/or kind of such
other securities so receivable upon exercise of any Right (and/or
the Purchase Price in respect thereof) will be subject to
adjustment from time to time in a manner and on terms as nearly
equivalent as practicable to the provisions with respect to the
Preferred Shares (and the Purchase Price in respect thereof)
contained in this Section 11, and the provisions of Sections 7,
9, 10, 13 and 14 with respect to the Preferred Shares (and the
Purchase Price in respect thereof) will apply on like terms to
any such other securities (and the Purchase Price in respect
thereof).
(g) All Rights originally issued by the Company subsequent
to any adjustment made to the Purchase Price hereunder will
evidence the right to purchase, at the adjusted Purchase Price,
the number of one one-hundredths of a Preferred Share issuable
from time to time hereunder upon exercise of the Rights, all
subject to further adjustment as provided herein.
(h) Unless the Company has exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase
Price pursuant to Section 11(b) or Section 11(c), each Right
outstanding immediately prior to the making of such adjustment
will thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-hundredths of a Preferred
Share (calculated to the nearest one one-millionth of a Preferred
Share) obtained by (i) multiplying (x) the number of one one-
hundredths of a Preferred Share issuable upon exercise of a Right
immediately prior to such adjustment of the Purchase Price 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 Preferred Share issuable upon the exercise of a
Right. Each of the Rights outstanding after such adjustment of
the number of Rights will be exercisable for the number of one
one-hundredths of a Preferred Share for which a Right was
exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights
will 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 will make a public announcement of
its election to adjust the number of Rights, indicating the
record date for the adjustment, and, if
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known at the time, the amount of the adjustment to be made, with
prompt notice thereof to the Rights Agent. Such 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, will
be at least 10 calendar 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 will, as promptly as practicable, cause to be
distributed to holders of record of Right Certificates on such
record date Right Certificates evidencing, subject to the
provisions of Section 14, the additional Rights to which such
holders are entitled as a result of such adjustment, or, at the
option of the Company, will 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 are entitled after such adjustment. Right
Certificates so to be distributed will be issued, executed, and
countersigned in the manner provided for herein (and may bear, at
the option of the Company, the adjusted Purchase Price) and will
be registered in the names of the holders of record of Right
Certificates on the record date specified in the public
announcement.
(j) Without respect to any adjustment or change in the
Purchase Price and/or the number and/or kind of 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 and kind of securities which were
expressed in the initial Right Certificate issued hereunder.
(k) Before taking any action that would cause an adjustment
reducing the Purchase Price below one one-hundredth of the then
par value, if any, of the Preferred Shares or below the then par
value, if any, of any other securities of the Company issuable
upon exercise of the Rights, the Company will 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 Preferred Shares or such other securities, as
the case may be, at such adjusted Purchase Price.
(l) In any case in which this Section 11 otherwise requires
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 notice to the Rights Agent) until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date the number of Preferred Shares
or other securities of the Company, if any, issuable upon such
exercise over and above the number of Preferred Shares or other
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 delivers to such
holder a due xxxx or other appropriate instrument evidencing such
holder's right to receive such additional Preferred Shares or
other securities upon the occurrence of the event requiring such
adjustment.
(m) Notwithstanding anything in this Agreement to the
contrary, the Company will be entitled to make such reductions in
the Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in its
good faith judgment the Board of Directors of the Company
determines to be advisable in order that any (i) consolidation or
subdivision of the Preferred Shares, (ii) issuance wholly for
cash of Preferred Shares at less than the current per share
market price therefor, (iii) issuance wholly for cash of
Preferred Shares
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or securities which by their terms are convertible into or
exchangeable for Preferred Shares, (iv) stock dividends, or (v)
issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its
Preferred Shares is not taxable to such stockholders.
(n) Notwithstanding anything in this Agreement to the
contrary, in the event that the Company at any time after the
Record Date prior to the Distribution Date (i) pays a dividend on
the outstanding Common Shares payable in Common Shares, (ii)
subdivides the outstanding Common Shares, (iii) combines the
outstanding Common Shares into a smaller number of shares, or
(iv) issues any shares of its capital stock in a reclassification
of the outstanding Common Shares (including any such
reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation),
the number of Rights associated with each Common Share then
outstanding, or issued or delivered thereafter but prior to the
Distribution Date, will be proportionately adjusted so that the
number of Rights thereafter associated with each Common Share
following any such event equals the result obtained by
multiplying the number of Rights associated with each Common
Share immediately prior to such event by a fraction the numerator
of which is the total number of Common Shares outstanding
immediately prior to the occurrence of the event and the
denominator of which is the total number of Common Shares
outstanding immediately following the occurrence of such event.
The adjustments provided for in this Section 11(n) will be made
successively whenever such a dividend is paid or such a
subdivision, combination or reclassification is effected.
12. Certificate of Adjusted Purchase Price or Number of
Securities. Whenever an adjustment is made as provided in
Section 11 or Section 13, the Company will promptly (a) prepare a
certificate setting forth such adjustment and a brief statement
of the facts and computations accounting for such adjustment, (b)
file with the Rights Agent and with each transfer agent for the
Preferred Shares and the Common Shares a copy of such
certificate, and (c) if such adjustment is made after the
Distribution Date, mail a brief summary of such adjustment to
each holder of a Right Certificate in accordance with Section 26.
The Rights Agent shall be fully protected in relying on any such
certificate and on any adjustment therein contained and shall
have no duty with respect to and shall not be deemed to have
knowledge of any such adjustment unless and until it shall have
received such certificate.
13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.(a) In the event that:
(i) at any time after a Person has become an Acquiring
Person, the Company consolidates with, or merges with or into,
any other Person and the Company is not the continuing or
surviving corporation of such consolidation or merger; or
(ii) at any time after a Person has become an Acquiring
Person, any Person consolidates with the Company, or merges with
or into the Company, and the Company is the continuing or
surviving corporation of such merger or consolidation and, in
connection with such merger or consolidation, all or part of the
Common Shares is changed into or exchanged for stock or other
securities of any other Person or cash or any other property; or
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(iii) at any time after a Person has become an Acquiring
Person, the Company, directly or indirectly, sells or otherwise
transfers (or one or more of its Subsidiaries sells or otherwise
transfers), in one or more transactions, assets or earning power
(including without limitation securities creating any obligation
on the part of the Company and/or any of its Subsidiaries)
representing in the aggregate more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons other than the Company or one or
more of its wholly owned Subsidiaries;
then, and in each such case, proper provision will be made so
that from and after the latest of the Share Acquisition Date, the
Distribution Date and the date of the occurrence of such Flip-
over Event (A) each holder of a Right thereafter has the right to
receive, upon the exercise thereof in accordance with the terms
of this Agreement at an exercise price per Right equal to the
product of the then-current Purchase Price multiplied by the
number of one one-hundredths of a Preferred Share for which a
Right was exercisable immediately prior to the Share Acquisition
Date, such number of duly authorized, validly issued, fully paid,
nonassessable and freely tradeable Common Shares of the Issuer,
free and clear of any liens, encumbrances and other adverse
claims and not subject to any rights of call or first refusal, as
equals the result obtained by (x) multiplying the then-current
Purchase Price by the number of one one-hundredths of a Preferred
Share for which a Right is exercisable immediately prior to the
Share Acquisition Date and dividing that product by (y) 50% of
the current per share market price of the Common Shares of the
Issuer (determined pursuant to Section 11(d)), on the date of the
occurrence of such Flip-over Event; (B) the Issuer will
thereafter be liable for, and will assume, by virtue of the
occurrence of such Flip-over Event, all the obligations and
duties of the Company pursuant to this Agreement; (C) the term
"Company" will thereafter be deemed to refer to the Issuer; and
(D) the Issuer will take such steps (including without limitation
the reservation of a sufficient number of its Common Shares to
permit the exercise of all outstanding Rights) in connection with
such consummation as may be necessary to assure that the
provisions hereof are thereafter applicable, as nearly as
reasonably may be possible, in relation to its Common Shares
thereafter deliverable upon the exercise of the Rights.
(b) For purposes of this Section 13, "Issuer" means (i) in
the case of any Flip-over Event described in Sections 13(a)(i) or
(ii) above, the Person that is the continuing, surviving,
resulting or acquiring Person (including the Company as the
continuing or surviving corporation of a transaction described in
Section 13(a)(ii) above), and (ii) in the case of any Flip-over
Event described in Section 13(a)(iii) above, the Person that is
the party receiving the greatest portion of the assets or earning
power (including without limitation securities creating any
obligation on the part of the Company and/or any of its
Subsidiaries) transferred pursuant to such transaction or
transactions; provided, however, that, in any such case, (A) if
(1) no class of equity security of such Person is, at the time of
such merger, consolidation or transaction and has been
continuously over the preceding 12-month period, registered
pursuant to Section 12 of the Exchange Act, and (2) such Person
is a Subsidiary, directly or indirectly, of another Person, a
class of equity security of which is and has been so registered,
the term "Issuer" means such other Person; and (B) in case such
Person is a Subsidiary, directly or indirectly, of more than one
Person, a class of equity security of two or more of which are
and have been so registered, the term "Issuer" means whichever of
such Persons is the issuer of the equity security having the
greatest aggregate market value. Notwithstanding the foregoing,
if the Issuer in any of the Flip-over Events listed above is not
a corporation or other legal entity having outstanding equity
securities, then, and in each such case, (x) if the Issuer is
directly or
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indirectly wholly owned by a corporation or other legal entity
having outstanding equity securities, then all references to
Common Shares of the Issuer will be deemed to be references to
the Common Shares of the corporation or other legal entity having
outstanding equity securities which ultimately controls the
Issuer, and (y) if there is no such corporation or other legal
entity having outstanding equity securities, (I) proper provision
will be made so that the Issuer creates or otherwise makes
available for purposes of the exercise of the Rights in
accordance with the terms of this Agreement, a kind or kinds of
security or securities having a fair market value at least equal
to the economic value of the Common Shares which each holder of a
Right would have been entitled to receive if the Issuer had been
a corporation or other legal entity having outstanding equity
securities; and (II) all other provisions of this Agreement will
apply to the issuer of such securities as if such securities were
Common Shares.
(c) The Company will not consummate any Flip-over Event if,
(i) at the time of or immediately after such Flip-over Event,
there are or would be any rights, warrants, instruments or
securities outstanding or any agreements or arrangements in
effect which would eliminate or substantially diminish the
benefits intended to be afforded by the Rights, (ii) prior to,
simultaneously with or immediately after such Flip-over Event,
the stockholders of the Person who constitutes, or would
constitute, the Issuer for purposes of Section 13(a) shall have
received a distribution of Rights previously owned by such Person
or any of its Affiliates or Associates, or (iii) the form or
nature of the organization of the Issuer would preclude or limit
the exercisability of the Rights. In addition, the Company will
not consummate any Flip-over Event unless the Issuer has a
sufficient number of authorized Common Shares (or other
securities as contemplated in Section 13(b) above) which have not
been issued or reserved for issuance to permit the exercise in
full of the Rights in accordance with this Section 13 and unless
prior to such consummation the Company and the Issuer have
executed and delivered to the Rights Agent a supplemental
agreement providing for the terms set forth in subsections (a)
and (b) of this Section 13 and further providing that as promptly
as practicable after the consummation of any Flip-over Event, the
Issuer will:
(A) prepare and file a registration statement under the
Securities Act with respect to the Rights and the securities
issuable upon exercise of the Rights on an appropriate form, and
use its best efforts to cause such registration statement to (1)
become effective as soon as practicable after such filing and (2)
remain effective (with a prospectus at all times meeting the
requirements of the Securities Act) until the Expiration Date;
(B) take all such action as may be appropriate under, or to
ensure compliance with, the securities or "blue sky" laws of the
various states in connection with the exercisability of the
Rights; and
(C) deliver to holders of the Rights historical financial
statements for the Issuer and each of its Affiliates which comply
in all respects with the requirements for registration on Form 10
under the Exchange Act.
(d) The provisions of this Section 13 will similarly apply
to successive mergers or consolidations or sales or other
transfers. In the event that a Flip-over Event occurs at any
time after the occurrence of a Flip-in Event, except for Rights
that have become null and void pursuant to Section 11(a)(ii),
Rights
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that shall not have been previously exercised will cease to be
exercisable in the manner provided in Section 11(a)(ii) and will
thereafter be exercisable in the manner provided in Section
13(a).
14. Fractional Rights and Fractional Securities. (a) The
Company will not be required to issue fractions of Rights or to
distribute Right Certificates which evidence fractional Rights.
In lieu of such fractional Rights, the Company will pay as
promptly as practicable to the registered holders of the Right
Certificates with regard to which such fractional Rights
otherwise would be issuable, an amount in cash equal to the same
fraction of the current market value of one Right. For the
purposes of this Section 14(a), the current market value of one
Right is the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights
otherwise would have been issuable. The closing price for any
day is 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 the Rights are not publicly held or are not so
listed or traded, or are not the subject of available bid and
asked quotes, the current market value of one Right will mean the
fair value thereof as determined in good faith by the Board of
Directors of the Company, whose determination will be described
in a statement filed with the Rights Agent.
(b) The Company will not be required to issue fractions of
Preferred Shares (other than fractions which are integral
multiples of one one-hundredth of a Preferred Share) upon
exercise of the Rights or to distribute certificates which
evidence fractional Preferred Shares (other than fractions which
are integral multiples of one one-hundredth of a Preferred
Share). Fractions of Preferred Shares in integral multiples of
one one-hundredth of a Preferred Share may, at the election of
the Company, be evidenced by depositary receipts pursuant to an
appropriate agreement between the Company and a depositary
selected by it, provided that such agreement provides that the
holders of such depositary receipts have all the rights,
privileges and preferences to which they are entitled as
beneficial owners of the Preferred Shares represented by such
depositary receipts. In lieu of fractional Preferred Shares that
are not integral multiples of one one-hundredth of a Preferred
Share, the Company may pay to any Person to whom or which such
fractional Preferred Shares would otherwise be issuable an amount
in cash equal to the same fraction of the current market value of
one Preferred Share. For purposes of this Section 14(b), the
current market value of one Preferred Share is the closing price
of the Preferred Shares (as determined in the same manner as set
forth for Common Shares in the second sentence of Section
11(d)(i)) for the Trading Day immediately prior to the date of
such exercise; provided, however, that if the closing price of
the Preferred Shares cannot be so determined, the closing price
of the Preferred Shares for such Trading Day will be conclusively
deemed to be an amount equal to the closing price of the Common
Shares (determined pursuant to the second sentence of Section
11(d)(i)) for such Trading Day multiplied by one hundred
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(as such number may be appropriately adjusted to reflect events
such as stock splits, stock dividends, recapitalizations or
similar transactions relating to the Common Shares occurring
after the date of this Agreement); provided further, however,
that if neither the Common Shares nor the Preferred Shares are
publicly held or listed or admitted to trading on any national
securities exchange, or the subject of available bid and asked
quotes, the current market value of one Preferred Share will mean
the fair value thereof as determined in good faith by the Board
of Directors of the Company, whose determination will be
described in a statement filed with the Rights Agent.
(c) Following the occurrence of a Triggering Event, the
Company will not be required to issue fractions of Common Shares
or other securities issuable upon exercise or exchange of the
Rights or to distribute certificates which evidence any such
fractional securities. In lieu of issuing any such fractional
securities, the Company may pay to any Person to whom or which
such fractional securities would otherwise be issuable an amount
in cash equal to the same fraction of the current market value of
one such security. For purposes of this Section 14(c), the
current market value of one Common Share or other security
issuable upon the exercise or exchange of Rights is the closing
price thereof (as determined in the same manner as set forth for
Common Shares in the second sentence of Section 11(d)(i)) for the
Trading Day immediately prior to the date of such exercise or
exchange; provided, however, that if neither the Common Shares
nor any such other securities are publicly held or listed or
admitted to trading on any national securities exchange, or the
subject of available bid and asked quotes, the current market
value of one Common Share or such other security will mean the
fair value thereof as determined in good faith by the Board of
Directors of the Company, whose determination will mean the fair
value thereof as will be described in a statement filed with the
Rights Agent.
15. Rights of Action. All rights of action in respect of
this Agreement, excepting the rights of action given to the
Rights Agent under this Agreement, are vested in the respective
registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Shares);
and any registered holder of any Right Certificate (or, prior to
the Distribution Date, of the Common Shares), without the consent
of the Rights Agent or of the holder of any other Right
Certificate (or, prior to the Distribution Date, of the holder of
any Common Shares), may in his own behalf and for his own benefit
enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in
respect of, his right to exercise the Rights evidenced by such
Right Certificate 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
and will be entitled to specific performance of the obligations
under this Agreement, and injunctive relief against actual or
threatened violations of the obligations of any Person subject to
this Agreement.
16. Agreement of Rights Holders. Every holder of a Right
by accepting the same consents and agrees with the Company and
the Rights Agent and with every other holder of a Right that:
(a) Prior to the Distribution Date, the Rights are
transferable only in connection with the transfer of the Common
Shares;
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(b) After the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office of the Rights Agent designated for such
purpose, duly and properly endorsed or accompanied by a proper
instrument of transfer;
(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 Share certificate) is
registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the Right Certificate or the associated Common Share
certificate made by anyone other than the Company or the Rights
Agent) for all purposes whatsoever, and neither the Company nor
the Rights Agent will be affected by any notice to the contrary;
(d) Such holder expressly waives any right to receive any
fractional Rights and any fractional securities upon exercise or
exchange of a Right, except as otherwise provided in Section 14.
(e) Notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent will have any
liability to any holder of a Right or other Person as a result of
its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, that the Company will use its
best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate will be entitled to
vote, receive dividends, or be deemed for any purpose the holder
of Preferred Shares or any other securities of the Company which
may at any time be issuable upon the exercise of the Rights
represented thereby, nor will 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 stockholder of
the Company or any right to vote for the election of Directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25), or to receive
dividends or subscription rights, or otherwise, until the Right
or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions of this Agreement or
exchanged pursuant to the provisions of Section 24.
18. Concerning the Rights Agent. (a) The Company will pay
to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the
Rights Agent, its reasonable expenses and counsel fees and other
disbursements incurred in the administration, preparation,
delivery, execution and amendment of this Agreement and the
exercise and performance of its duties hereunder. The Company
will also indemnify the Rights Agent for, and hold it harmless
against, any loss, liability, suit, action, proceeding, damages,
judgment, fine, penalty, claim, demand, settlement, cost or
expense, incurred without gross negligence, bad faith, or willful
misconduct as determined by a court of competent jurisdiction on
the part of the Rights Agent, for any action taken, suffered or
omitted to be taken by the Rights Agent in connection with the
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acceptance and administration of this Agreement, including
without limitation the costs and expenses of defending against
any claim of liability arising therefrom, directly or indirectly.
The indemnity provided herein shall survive the termination of
this Agreement and the termination and the 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 or 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 will be authorized and protected and
will incur no liability for or in respect of any action taken,
suffered, or omitted by it in connection with its administration
of this Agreement in reliance upon any Right Certificate or
certificate evidencing Preferred Shares or Common Shares or 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 in reliance upon written advice or
an opinion of counsel as set forth in Section 20(a).
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 corporation resulting from any merger or
consolidation to which the Rights Agent or any successor Rights
Agent is a party, or any Person succeeding to the shareholder
services business of the Rights Agent or any successor Rights
Agent, will be the successor to the Rights Agent under this
Agreement without the execution or filing of any paper or any
further act on the part of any of the parties hereto, provided
that such Person would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21. If at the time
such successor Rights Agent succeeds 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 if 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 will have the full force
provided in the Right Certificates and in this Agreement.
(b) If at any time the name of the Rights Agent changes and
at such time any of the Right Certificates have been
countersigned but not delivered, the Rights Agent may adopt the
countersignature under its prior name and deliver Right
Certificates so countersigned; and if at that time any of the
Right Certificates have not 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 will have the full force provided in the Right
Certificates and in this Agreement.
20. Duties of Rights Agent. The Rights Agent undertakes
only the duties and obligations 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, will be bound:
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(a) The Rights Agent may consult with legal counsel (who
may be legal counsel for the Company), and the written advice or
opinion of such counsel will be full and complete authorization
and protection to the Rights Agent as to any action taken,
suffered or omitted by it in good faith and in accordance with
such written advice or opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent deems it necessary or desirable that
any fact or matter (including, but not limited to, the identity
of any Acquiring Person and the determination of current per
share market price) be proved or established by the Company prior
to taking, suffering or omitting any action hereunder, such fact
or matter (unless other evidence in respect thereof be herein
specifically prescribed) may be deemed to be conclusively proved
and established by a certificate signed by any one of the
Chairman of the Board, the President, any Vice President, the
Secretary or the Treasurer of the Company and delivered to the
Rights Agent, and such certificate will be full authorization and
protection to the Rights Agent for 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 will be liable hereunder only for its
own gross negligence, bad faith or willful misconduct, as
determined by a Court of competent jurisdiction.
(d) The Rights Agent will not be liable for or by reason of
any of the statements of fact or recitals contained in this
Agreement or in the Right Certificates (except its
countersignature thereof) or be required to verify the same, but
all such statements and recitals are and will be deemed to have
been made by the Company only.
(e) The Rights Agent will not be under any liability or
responsibility in respect of the validity of this Agreement or
the execution and delivery hereof (except the due execution and
delivery hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its
countersignature thereof); nor will it be liable or responsible
for any breach by the Company of any covenant contained in this
Agreement or in any Right Certificate; nor will it be liable or
responsible for any adjustment required under the provisions of
Sections 11 or 13 (including any adjustment which results in
Rights becoming null and void) or responsible for the manner,
method or amount of any such adjustment or the ascertaining of
the existence of facts that would require any such adjustment
(except with respect to the exercise of Rights evidenced by Right
Certificates after actual notice of any such adjustment); nor
will it by any act hereunder be deemed to make any representation
or warranty as to the authorization or reservation of any shares
of stock or other securities to be issued pursuant to this
Agreement or any Right Certificate or as to whether any shares of
stock or other securities will, when issued, be duly authorized,
validly issued, fully paid and nonassessable.
(f) The Company 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.
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(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the
President, any Vice President, the Secretary or the Treasurer of
the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it will not be
liable for any action taken, suffered or omitted to be taken by
it in good faith in accordance with instructions of any such
officer or for any delay in action while waiting for such
instructions.
(h) The Rights Agent and any stockholder, director,
officer, Affiliate or employee of the Rights Agent may buy, sell
or deal in any of the Rights or other securities of the Company
or become pecuniarily interested in any transaction in which the
Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were
not Rights Agent under this Agreement. Nothing herein will
preclude the Rights Agent from acting in any other capacity for
the Company or for any other Person.
(i) The Rights Agent may execute and exercise any of the
rights or powers hereby vested in it or perform any duty
hereunder either itself or by or through its attorneys or agents,
and the Rights Agent will not be answerable or accountable for
any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such
act, default, neglect or misconduct, absent gross negligence, bad
faith or willful misconduct of such attorney or agent or of the
Rights Agent in selecting or employing such attorney or agent.
The Rights Agent will not be under any duty or responsibility to
ensure compliance with any applicable federal or state securities
laws in connection with the issuance, transfer or exchange of
Right Certificates.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if it believes that
repayment of such funds or adequate indemnification against such
risk or liability is not reasonably assured to it.
(k) If, with respect to any Right Certificate surrendered
to the Rights Agent for exercise, transfer, split up, combination
or exchange, either (i) the certificate attached to the form of
assignment or form of election to purchase, as the case may be,
has either not been completed or indicates an affirmative
response to clause 1 or 2 thereof, or (ii) any other actual or
suspected irregularity exists, the Rights Agent will not take any
further action with respect to such requested exercise, transfer,
split up, combination or exchange without first consulting with
the Company, and will thereafter take further action with respect
thereto only in accordance with the Company's written
instructions.
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 calendar days' notice in
writing mailed to the Company and to each transfer agent of the
Preferred Shares or the Common Shares by registered or certified
mail, and 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 calendar 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 Preferred Shares and the Common
Shares by
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registered or certified mail, and to the holders of the Right
Certificates by first class mail. If the Rights Agent resigns or
is removed or otherwise becomes incapable of acting, the Company
will appoint a successor to the Rights Agent. If the Company
fails to make such appointment within a period of 30 calendar
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 will, 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, will be a Person organized and doing business
under the laws of the United States or of the State of New York
(or of any other state of the United States), in good standing,
which is authorized under such laws to exercise corporate trust
or stock transfer powers or otherwise authorized to do business
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.
After appointment, the successor Rights Agent will 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 will deliver and transfer
to the successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Company will
file notice thereof in writing with the predecessor Rights Agent
and each transfer agent of the Preferred Shares or the Common
Shares, and 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,
will 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.
22. Issuance of New Right Certificates. Notwithstanding
any of the provisions of this Agreement or of the Rights to the
contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such form as may be approved by
its Board of Directors to reflect any adjustment or change in the
Purchase Price per share and the number or kind of securities
issuable upon exercise of the Rights made in accordance with the
provisions of this Agreement. In addition, in connection with
the issuance or sale by the Company of Common Shares following
the Distribution Date and prior to the Expiration Date, the
Company (a) will, with respect to Common Shares so issued or sold
pursuant to the exercise, exchange or conversion of securities
(other than Rights) issued prior to the Distribution Date which
are exercisable or exchangeable for, or convertible into Common
Shares, and (b) may, in any other case, if deemed necessary,
appropriate or desirable by the Board of Directors of the
Company, issue Right Certificates representing an equivalent
number of Rights as would have been issued in respect of such
Common Shares if they had been issued or sold prior to the
Distribution Date, as appropriately adjusted as provided herein
as if they had been so issued or sold; provided, however, that
(i) no such Right Certificate will be issued if, and to the
extent that, in its good faith judgment the Board of Directors of
the Company determines that the issuance of such Right
Certificate could have a material adverse tax consequence to the
Company or to the Person to whom or which such Right Certificate
otherwise would be issued and (ii) no such Right Certificate will
be issued if, and to the extent that, appropriate adjustment
otherwise has been made in lieu of the issuance thereof.
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23. Redemption. (a) Prior to the Expiration Date, the
Board of Directors of the Company may, at its option, redeem all
but not less than all of the then-outstanding Rights at the
Redemption Price at any time prior to the Close of Business on
the later of (i) the Distribution Date and (ii) Share Acquisition
Date. Any such redemption will be effective immediately upon the
action of the Board of Directors of the Company ordering the
same, unless such action of the Board of Directors of the Company
expressly provides that such redemption will be effective at a
subsequent time or upon the occurrence or nonoccurrence of one or
more specified events (in which case such redemption will be
effective in accordance with the provisions of such action of the
Board of Directors of the Company).
(b) Immediately upon the effectiveness of the redemption of
the Rights as provided in Section 23(a), 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 will be to receive the Redemption Price, without interest
thereon. Promptly after the effectiveness of the redemption of
the Rights as provided in Section 23(a), the Company will
publicly announce such redemption and, within 10 calendar days
thereafter, will give notice of such redemption to the Rights
Agent to the holders of the then-outstanding Rights by mailing
such notice to all such holders at their last addresses as they
appear upon the registry books of the Company; provided, however,
that the failure to give, or any defect in, any such notice will
not affect the validity of the redemption of the Rights. Any
notice that is mailed in the manner herein provided will be
deemed given, whether or not the holder receives the notice. The
notice of redemption mailed to the holders of Rights will state
the method by which the payment of the Redemption Price will be
made. The Company may, at its option, pay the Redemption Price
in cash, Common Shares (based upon the current per share market
price of the Common Shares (determined pursuant to Section 11(d))
at the time of redemption), or any other form of consideration
deemed appropriate by the Board of Directors of the Company
(based upon the fair market value of such other consideration,
determined by the Board of Directors of the Company in good
faith) or any combination thereof. The Company may, at its
option, combine the payment of the Redemption Price with any
other payment being made concurrently to holders of Common Shares
and, to the extent that any such other payment is discretionary,
may reduce the amount thereof on account of the concurrent
payment of the Redemption Price. If legal or contractual
restrictions prevent the Company from paying the Redemption Price
(in the form of consideration deemed appropriate by the Board of
Directors) at the time of redemption, the Company will pay the
Redemption Price, without interest, promptly after such time as
the Company ceases to be so prevented from paying the Redemption
Price.
24. Exchange. (a) The Board of Directors of the Company
may, at its option, at any time after the later of the Share
Acquisition Date and the Distribution Date, exchange all or part
of the then-outstanding and exercisable Rights (which will not
include Rights that have become null and void pursuant to the
provisions of Section 11(a)(ii)) for Common Shares at an exchange
ratio of one Common Share per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction
occurring after the Record Date (such exchange ratio being
hereinafter referred to as the "Exchange Ratio"). Any such
exchange will be effective immediately upon the action of the
Board of Directors of the Company ordering the same, unless such
action of the Board of Directors of the Company expressly
provides that such exchange will be effective at a subsequent
time or upon the occurrence or nonoccurrence of one or more
specified events (in which case such exchange will be effective
in accordance with the provisions of such action of the Board of
Directors of the Company). Notwithstanding the
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35
foregoing, the Board of Directors of the Company will not be
empowered to effect such exchange at any time after any Person
(other than the Company or any Related Person), who or which,
together with all Affiliates and Associates of such Person,
becomes the Beneficial Owner of 50% or more of the
then-outstanding Common Shares.
(b) Immediately upon the effectiveness of the exchange of
any Rights as provided in Section 24(a), and without any further
action and without any notice, the right to exercise such Rights
will terminate and the only right with respect to such Rights
thereafter of the holders of such Rights will be to receive that
number of Common Shares equal to the number of such Rights held
by such holder multiplied by the Exchange Ratio. Promptly after
the effectiveness of the exchange of any Rights as provided in
Section 24(a), the Company will publicly announce such exchange
and give notice thereof to the Rights Agent and, within 10
calendar days thereafter, will give notice of such exchange to
all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent; provided,
however, that the failure to give, or any defect in, such notice
will not affect the validity of such exchange. Any notice that
is mailed in the manner herein provided will 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
Common Shares for Rights will be effected and, in the event of
any partial exchange, the number of Rights which will be
exchanged. Any partial exchange will be effected pro rata based
on the number of Rights (other than Rights which have become null
and void pursuant to the provisions of Section 11(a)(ii)) held by
each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute for any Common Share
exchangeable for a Right (i) equivalent common shares (as such
term is used in Section 11(a)(iii)), (ii) cash, (iii) debt
securities of the Company, (iv) other assets, or (v) any
combination of the foregoing, in any event having an aggregate
value, as determined in good faith by the Board of Directors of
the Company (whose determination will be described in a statement
filed with the Rights Agent), equal to the current market value
of one Common Share (determined pursuant to Section 11(d)) on the
Trading Day immediately preceding the date of the effectiveness
of the exchange pursuant to this Section 24.
25. Notice of Certain Events. (a) If, after the
Distribution Date, the Company proposes (i) to pay any dividend
payable in stock of any class to the holders of Preferred Shares
or to make any other distribution to the holders of Preferred
Shares (other than a regular periodic cash dividend), (ii) to
offer to the holders of Preferred Shares rights, options or
warrants to subscribe for or to purchase any additional Preferred
Shares or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its
Preferred Shares (other than a reclassification involving only
the subdivision of outstanding Preferred Shares), (iv) to effect
any consolidation or merger into or with, or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries
to effect any sale or other transfer), in one or more
transactions, of assets or earning power (including, without
limitation, securities creating any obligation on the part of the
Company and/or any of its Subsidiaries) representing more than
50% of the assets and earning power of the Company and its
Subsidiaries, taken as a whole, to any other Person or Persons
other than the Company or one or more of its wholly owned
Subsidiaries, (v) to effect the liquidation, dissolution or
winding up of the Company, or (vi) to declare or pay any dividend
on the Common Shares payable in Common Shares or to effect a
subdivision, combination or reclassification of the Common Shares
then, in each such case, the Company will give to each holder of
a Right Certificate and the Rights Agent, to the extent
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36
feasible and in accordance with Section 26, a notice of such
proposed action, which specifies the record date for the purposes
of such stock dividend, distribution or offering of rights,
options or warrants, or the date on which such reclassifica-ion,
consolidation, merger, sale, transfer, liquidation, dissolution
or winding up is to take place and the date of participation
therein by the holders of the Common Shares and/or Preferred
Shares, if any such date is to be fixed, and such notice will be
so given, in the case of any action covered by clause (i) or (ii)
above, at least 10 calendar days prior to the record date for
determining holders of the Preferred Shares for purposes of such
action, and, in the case of any such other action, at least 10
calendar days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the
Common Shares and/or Preferred Shares, whichever is the earlier.
(b) In case any Triggering Event occurs, then, in any such
case, the Company will as soon as practicable thereafter give to
the Rights Agent and each holder of a Right Certificate and the
Rights Agent, in accordance with Section 26, a notice of the
occurrence of such event, which specifies the event and the
consequences of the event to holders of Rights.
26. Notices. (a) Notices 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 will 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:
Xxxxxx International Industries, Incorporated
0000 Xxxxxx Xxxxxxxxx
Xxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx Xxxxxxxx, Vice President - Finance and
Administration, Chief Financial Officer and Secretary
(b) 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 will 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.
000 Xxxxx Xxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxxxxxx
(c) 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 (or, if prior the Distribution Date, to the
holder of any certificate evidencing Common Shares) will 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.
27. Supplements and Amendments. Prior to the time at which
the Rights cease to be redeemable pursuant to Section 23, and
subject to the last sentence of this Section 27, the Company may
in its sole and absolute discretion, and the Rights Agent will if
the Company so directs, supplement or amend any provision of this
Agreement in any respect without the approval of any holders of
Rights or Common Shares. From and after the time at which the
Rights cease to be redeemable pursuant to Section 23, and subject
to the last sentence of this Section 27, the Company may, and the
Rights Agent will if the Company so directs, supplement or amend
this Agreement without the approval of any holders of Rights or
Common Shares
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37
in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or
inconsistent with any other provisions herein, (iii) to shorten
or lengthen any time period hereunder, or (iv) to supplement or
amend the provisions hereunder in any manner which the Company
may deem 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 supplement or amendment
shall cause the Rights again to become redeemable or cause this
Agreement again to become supplementable or amendable otherwise
than in accordance with the provisions of this sentence. Without
limiting the generality or effect of the foregoing, this
Agreement may be supplemented or amended to provide for such
voting powers for the Rights and such procedures for the exercise
thereof, if any, as the Board of Directors of the Company may
determine to be appropriate. Upon the delivery of a certificate
from an officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this
Section 27, the Rights Agent will execute such supplement or
amendment; provided, however, that so long as (i) such supplement
or amendment does not increase the Rights Agent's duties,
liabilities or obligations under this Agreement and (ii) prompt
notice of the supplement or amendment is given to the Rights
Agent, the failure or refusal of the Rights Agent to execute such
supplement or amendment will not affect the validity of any
supplement or amendment adopted by the Board of Directors of the
Company, any of which will be effective in accordance with the
terms thereof. Notwithstanding anything in this Agreement to the
contrary, no supplement or amendment may be made which decreases
the stated Redemption Price to an amount less than $.01 per
Right.
28. Successors; Certain Covenants. All the covenants and
provisions of this Agreement by or for the benefit of the Company
or the Rights Agent will be binding on and inure to the benefit
of their respective successors and assigns hereunder.
29. Benefits of This Agreement. Nothing in this Agreement
will 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
Shares) any legal or equitable right, remedy or claim under this
Agreement. This Agreement will be for the sole and exclusive
benefit of the Company, the Rights Agent, and the registered
holders of the Right Certificates (or prior to the Distribution
Date, the Common Shares).
30. Governing Law. This Agreement, each Right and each
Right Certificate issued hereunder will be deemed to be a
contract made under the internal substantive laws of the State of
Delaware and for all purposes will be governed by and construed
in accordance with the internal substantive laws of such State
applicable to contracts to be made and performed entirely within
such State; provided, however, that all provisions regarding the
rights, duties and obligations of the Rights Agent shall be
governed by and construed in accordance with the laws of the
State of New York applicable to contracts made and to be
performed entirely within such State.
31. Severability. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent
jurisdiction or other authority to be invalid, void or
unenforceable, the remainder of the terms, provisions, covenants
and restrictions of this Agreement will remain in full force and
effect and will in no way be affected, impaired or invalidated;
provided, however, that nothing
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38
contained in this Section 31 will affect the ability of the
Company under the provisions of Section 27 to supplement or amend
this Agreement to replace such invalid, void or unenforceable
term, provision, covenant or restriction with a legal, valid and
enforceable term, provision, covenant or restriction.
32. Descriptive Headings, Etc. Descriptive headings of the
several Sections of this Agreement are inserted for convenience
only and will not control or affect the meaning or construction
of any of the provisions hereof. Unless otherwise expressly
provided, references herein to Articles, Sections and Exhibits
are to Articles, Sections and Exhibits of or to this Agreement.
33. Determinations and Actions by the Board. For all
purposes of this Agreement, any calculation of the number of
Common Shares outstanding at any particular time, including for
purposes of determining the particular percentage of such
outstanding Common Shares of which any Person is the Beneficial
Owner, will be made in accordance with the last sentence of Rule
13d-3(d)(1)(i) of the General Rules and Regulations under the
Exchange Act. The Board of Directors of the Company will have
the exclusive power and authority to administer this Agreement
and to exercise all 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 any determination as to whether particular
Rights shall have become null and void). All such actions,
calculations, interpretations and determinations (including, for
purposes of clause (y) below, any omission with respect to any of
the foregoing) which are done or made by the Board of Directors
of the Company in good faith will (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the
Rights and all other parties and (y) not subject the Board of
Directors of the Company to any liability to any Person,
including without limitation the Rights Agent and the holders of
the Rights.
34. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts will for all
purposes be deemed to be an original, and all such counterparts
will together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed all as of the day and year first
above written.
XXXXXX INTERNATIONAL INDUSTRIES, INCORPORATED
By:_____________________________
Name:
Title:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By:_____________________________
Name:
Title:
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39
EXHIBIT A
FORM
of
CERTIFICATE OF DESIGNATION
of
SERIES A JUNIOR PARTICIPATING
PREFERRED STOCK
of
XXXXXX INTERNATIONAL INDUSTRIES, INCORPORATED
(Pursuant to Section 151 of the
General Corporation Law of the State of Delaware)
Xxxxxx International Industries, Incorporated, a corporation
organized and existing under the General Corporation Law of the
State of Delaware (hereinafter called the "Company"), DOES HEREBY
CERTIFY:
That, pursuant to authority vested in the Board of Directors of
the Company by its Certificate of Incorporation, and pursuant to
the provisions of Section 151 of the General Corporation Law, the
Board of Directors of the Company has adopted the following
resolution providing for the issuance of a series of Preferred
Stock:
RESOLVED, that pursuant to the authority expressly granted to and
vested in the Board of Directors of the Company (hereinafter
called the "Board of Directors" or the "Board") by the
Certificate of Incorporation of the Company, a series of
Preferred Stock, par value $.01 per share (the "Preferred
Stock"), of the Company be, and it hereby is, created, and that
the designation and amount thereof and the powers, designations,
preferences and relative, participating, optional and other
special rights of the shares of such series, and the
qualifications, limitations or restrictions thereof are as
follows:
I. Designation and Amount
The shares of such series will be designated as Series A Junior
Participating Preferred Stock (the "Series A Preferred") and the
number of shares constituting the Series A Preferred is 500,000.
Such number of shares may be increased or decreased by resolution
of the Board; provided, however, that no decrease will reduce the
number of shares of Series A Preferred 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,
rightsor warrants or upon the conversion of any outstanding
securities issued by the Company convertible into Series A
Preferred.
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40
II. Dividends and Distributions
(a) Subject to the rights of the holders of any shares of
any series of Preferred Stock ranking prior to the Series A
Preferred with respect to dividends, the holders of shares of
Series A Preferred, in preference to the holders of Common Stock,
par value $.01 per share (the "Common Stock"), of the Company,
and of any other junior stock, will be entitled to receive, when,
as and if declared by the Board out of funds legally available
for the purpose, dividends payable in cash (except as otherwise
provided below) on such dates as are from time to time
established for the payment of dividends on the Common Stock
(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 (the "First Dividend Payment Date"), in an amount per
share (rounded to the nearest cent) equal to the greater of (i)
$1.00 or (ii) subject to the provision for adjustment hereinafter
set forth, one hundred times the aggregate per share amount of
all cash dividends, and one hundred times the aggregate per share
amount (payable in kind) of all non-cash dividends, other than a
dividend payable in shares of Common Stock or a subdivision of
the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately
preceding 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. In the event that the
Company at any time (i) declares a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (ii)
subdivides the outstanding shares of Common Stock, (iii) combines
the outstanding shares of Common Stock into a smaller number of
shares, or (iv) issues any shares of its capital stock in a
reclassification of the outstanding shares of Common Stock
(including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), then, in each such case and regardless of
whether any shares of Series A Preferred are then issued or
outstanding, the amount to which holders of shares of Series A
Preferred would otherwise be entitled immediately prior to such
event under clause (ii) of the preceding sentence will 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 will declare a dividend on the Series A
Preferred as provided in the immediately preceding paragraph
immediately after it declares a dividend on the Common Stock
(other than a dividend payable in shares of Common Stock). Each
such dividend on the Series A Preferred will be payable
immediately prior to the time at which the related dividend on
the Common Stock is payable.
(c) Dividends will accrue on outstanding shares of Series A
Preferred from the Dividend Payment Date next preceding the date
of issue of such shares, unless (i) 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 will accrue from the
date of the first issuance of a share of Series A Preferred or
(ii) 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 entitled to receive a dividend and before
such Dividend Payment Date, in either of which events such
A-2
41
dividends will accrue from such Dividend Payment Date. Accrued
but unpaid dividends will cumulate from the applicable Dividend
Payment Date but will not bear interest. Dividends paid on the
shares of Series A Preferred in an amount less than the total
amount of such dividends at the time accrued and payable on such
shares will be allocated pro rata on a share-by-share basis among
all such shares at the time outstanding. The Board may fix a
record date for the determination of holders of shares of Series
A Preferred entitled to receive payment of a dividend or
distribution declared thereon, which record date will be not more
than 60 calendar days prior to the date fixed for the payment
thereof.
III. Voting Rights
The holders of shares of Series A Preferred will have the
following voting rights:
(d) Subject to the provision for adjustment hereinafter set
forth, each share of Series A Preferred will entitle the holder
thereof to one hundred votes on all matters submitted to a vote
of the stockholders of the Company. In the event the Company at
any time (i) declares a dividend on the outstanding shares of
Common Stock payable in shares of Common Stock, (ii) subdivides
the outstanding shares of Common Stock, (iii) combines the
outstanding shares of Common Stock into a smaller number of
shares, or (iv) issues any shares of its capital stock in a
reclassification of the outstanding shares of Common Stock
(including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), then, in each such case and regardless of
whether any shares of Series A Preferred are then issued or
outstanding, the number of votes per share to which holders of
shares of Series A Preferred would otherwise be entitled
immediately prior to such event will 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.
(e) Except as otherwise provided herein, in any other
Preferred Stock Designation creating a series of Preferred Stock
or any similar stock, or by law, the holders of shares of Series
A Preferred and the holders of shares of Common Stock and any
other capital stock of the Company having general voting rights
will vote together as one class on all matters submitted to a
vote of stockholders of the Company.
(f) Except as set forth in the Certificate of Incorporation
or herein, or as otherwise provided by law, holders of shares of
Series A Preferred will have no voting rights.
IV. Certain Restrictions
(a) Whenever dividends or other dividends or distributions
payable on the Series A Preferred are in arrears, thereafter and
until all accrued and unpaid dividends and distributions, whether
or not declared, on shares of Series A Preferred outstanding
have been paid in full, the Company will not:
A-3
42
(i) Declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to
the shares of Series A Preferred;
(ii) Declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity (either
as to dividends or upon liquidation, dissolution or winding up)
with the shares of Series A Preferred, except dividends paid
ratably on the shares of Series A Preferred 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, 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
shares of Series A Preferred; provided, however, 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 (either as to dividends or upon
dissolution, liquidation or winding up) to the shares of Series A
Preferred; or
(iv) Redeem, purchase or otherwise acquire for
consideration any shares of Series A Preferred, or any shares of
stock ranking on a parity with the shares of Series A Preferred,
except in accordance with a purchase offer made in writing or by
publication (as determined by the Board) to all holders of such
shares upon such terms as the Board, after consideration of the
respective annual dividend rates and other relative rights and
preferences of the respective series and classes, may determine
in good faith will result in fair and equitable treatment among
the respective series or classes.
(b) The Company will not permit any majority-owned
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 Article IV, purchase
or otherwise acquire such shares at such time and in such manner.
V. Reacquired Shares
Any shares of Series A Preferred purchased or otherwise acquired
by the Company in any manner whatsoever will be retired and
cancelled promptly after the acquisition thereof. All such
shares will upon their cancellation become authorized but
unissued shares of Preferred Stock and may be reissued as part of
a new series of Preferred Stock subject to the conditions and
restrictions on issuance set forth herein, in the Certificate of
Incorporation of the Company, or in any other Preferred Stock
Designation creating a series of Preferred Stock or any similar
stock or as otherwise required by law.
VI. Liquidation, Dissolution or Winding Up
Upon any liquidation, dissolution or winding up of the Company,
no distribution will be made (a) to the holders of shares of
stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the shares of Series A Preferred
unless, prior thereto, the holders of shares of Series A
Preferred have received $100 per share, plus an amount equal to
accrued and
A-4
43
unpaid dividends and distributions thereon, whether or not
declared, to the date of such payment; provided, however, that
the holders of shares of Series A Preferred will be entitled to
receive an aggregate amount per share, subject to the provision
for adjustment hereinafter set forth, equal to one hundred 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 (either as to dividends or upon liquidation,
dissolution or winding up) with the shares of Series A Preferred,
except distributions made ratably on the shares of Series A
Preferred 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 the
Company at any time (i) declares a dividend on the outstanding
shares of Common Stock payable in shares of Common Stock, (ii)
subdivides the outstanding shares of Common Stock, (iii) combines
the outstanding shares of Common Stock into a smaller number of
shares, or (iv) issues any shares of its capital stock in a
reclassification of the outstanding shares of Common Stock
(including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or
surviving corporation), then, in each such case and regardless of
whether any shares of Series A Preferred are then issued or
outstanding, the aggregate amount to which each holder of shares
of Series A Preferred would otherwise be entitled immediately
prior to such event under the proviso in clause (a) of the
preceding sentence will 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.
VII. Consolidation, Merger, Etc.
In the event that the Company enters into any consolidation,
merger, combination or other transaction in which the shares of
Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then, in each such
case, each share of Series A Preferred will at the same time be
similarly exchanged for or changed into an amount per share,
subject to the provision for adjustment hereinafter set forth,
equal to one hundred times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as
the case may be, into which or for which each share of Common
Stock is changed or exchanged. In the event the Company at any
time (a) declares a dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (b) subdivides the
outstanding shares of Common Stock, (c) combines the outstanding
shares of Common Stock in a smaller number of shares, or (d)
issues any shares of its capital stock in a reclassification of
the outstanding shares of Common Stock (including any such
reclassification in connection with a consolidation or merger in
which the Company is the continuing or surviving corporation),
then, in each such case and regardless of whether any shares of
Series A Preferred are then issued or outstanding, the amount set
forth in the preceding sentence with respect to the exchange or
change of shares of Series A Preferred will 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.
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VIII. Redemption
The shares of Series A Preferred are not redeemable.
IX. Rank
The Series A Preferred rank, with respect to the payment of
dividends and the distribution of assets, junior to all other
series of the Company's Preferred Stock.
X. Amendment
Notwithstanding anything contained in the Certificate of
Incorporation of the Company to the contrary and in addition to
any other vote required by applicable law, the Certificate of
Incorporation of the Company may not be amended in any manner
that would materially alter or change the powers, preferences or
special rights of the Series A Preferred so as to affect them
adversely without the affirmative vote of the holders of at least
80% of the outstanding shares of Series A Preferred, voting
together as a single series.
IN WITNESS WHEREOF, this Certificate of Designation is executed
on behalf of the Company by its Secretary and attested by its
Chief Executive Officer this 27th day of December, 1999.
XXXXXX INTERNATIONAL INDUSTRIES, INCORPORATED
----------------------------
Name:
Title:
Attest:
----------------------------
Name:
Title:
A-6
45
EXHIBIT B
FORM OF RIGHT CERTIFICATE
Certificate No. R- ________ Rights
NOT EXERCISABLE AFTER DECEMBER 27, 2009 (SUBJECT TO POSSIBLE
EXTENSION AT THE OPTION OF THE COMPANY) OR EARLIER IF REDEEMED,
EXCHANGED OR AMENDED. THE RIGHTS ARE SUBJECT TO REDEMPTION,
EXCHANGE AND AMENDMENT AT THE OPTION OF THE COMPANY, ON THE TERMS
SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES
SPECIFIED IN THE RIGHTS AGREEMENT, RIGHTS THAT ARE OR WERE
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR AN
ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT) OR A TRANSFEREE THEREOF MAY BECOME NULL AND
VOID.
Right Certificate
XXXXXX INTERNATIONAL INDUSTRIES, INCORPORATED
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
December 13, 1999 (the "Rights Agreement"), between Xxxxxx
International Industries, Incorporated, a Delaware corporation
(the "Company"), and ChaseMellon Shareholder Services, L.L.C., a
New Jersey limited liability company (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. (Eastern time) on the Expiration Date (as such term is
defined in the Rights Agreement) at the principal office or
offices of the Rights Agent designated for such purpose, one one-
hundredth of a fully paid nonassessable share of Series A Junior
Participating Preferred Stock, par value $.01 per share (the
"Preferred Shares"), of the Company, at a purchase price of $250
per one one-hundredth of a Preferred Share (the "Purchase
Price"), upon presentation and surrender of this Right
Certificate with the Form of Election to Purchase and related
Certificate duly executed. If this Right Certificate is
exercised in part, the holder will be entitled to receive upon
surrender hereof another Right Certificate or Right Certificates
for the number of whole Rights not exercised. The number of
Rights evidenced by this Right Certificate (and the number of one
one-hundredths of a Preferred Share which may be purchased upon
exercise thereof) set forth above, and the Purchase Price set
forth above, are the number and Purchase Price as of the date of
the Rights Agreement, based on the Preferred Shares as
constituted at such date.
As provided in the Rights Agreement, the Purchase Price and/or
the number and/or kind of securities issuable upon the exercise
of the Rights evidenced by this Right Certificate are subject to
adjustment upon the occurrence 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,
B-1
46
limitations of rights, obligations, duties and immunities of the
Rights Agent, the Company and the holders of the Right
Certificates, which limitations of rights include the temporary
suspension of the exercisability of the Rights under the
circumstances specified in the Rights Agreement. Copies of the
Rights Agreement are on file at the above-mentioned office of the
Rights Agent and can be obtained from the Company without charge
upon written request therefor. Terms used herein with initial
capital letters and not defined herein are used herein with the
meanings ascribed thereto in the Rights Agreement.
Pursuant to the Rights Agreement, from and after the occurrence
of a Flip-in Event, any Rights that are Beneficially Owned by (i)
any Acquiring Person (or any Affiliate or Associate of any
Acquiring Person), (ii) a transferee of any Acquiring Person (or
any such Affiliate or Associate) who becomes a transferee after
the occurrence of a Flip-in Event, or (iii) a transferee of any
Acquiring Person (or any such Affiliate or Associate) who became
a transferee prior to or concurrently with the Flip-in Event
pursuant to either (a) a transfer from an 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 (b) 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 certain provisions of the Rights Agreement,
and subsequent transferees of any of such Persons, will be null
and void without any further action and any holder of such Rights
will thereafter have no rights whatsoever with respect to such
Rights under any provision of the Rights Agreement. From and
after the occurrence of a Flip-in Event, no Right Certificate
will be issued that represents Rights that are or have become
null and void pursuant to the provisions of the Rights Agreement,
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 the Rights Agreement will be canceled.
This Right Certificate, with or without other Right Certificates,
may be transferred, split up, combined or exchanged for another
Right Certificate or Right Certificates entitling the holder to
purchase a like number of one one-hundredths of a Preferred Share
(or other securities, as the case may be) as the Right
Certificate or Right Certificates surrendered entitled such
holder (or former holder in the case of a transfer) to purchase,
upon presentation and surrender hereof at the principal office of
the Rights Agent designated for such purpose, with the Form of
Assignment (if appropriate) and the related Certificate duly
executed.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate may be redeemed by the Company at
its option at a redemption price of $.01 per Right or may be
exchanged in whole or in part. The Rights Agreement may be
supplemented and amended by the Company, as provided therein.
The Company is not required to issue fractions of Preferred
Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share, which may, at the option of
the Company, be evidenced by depositary receipts) or other
securities issuable upon the exercise of any Right or Rights
evidenced hereby. In lieu of issuing such fractional referred
Shares or other securities, the Company may make a cash payment,
as provided in the Rights Agreement.
B-2
47
No holder of this Right Certificate, as such, will be entitled to
vote or receive dividends or be deemed for any purpose the holder
of the Preferred Shares or of any other securities of the Company
which may at any time be issuable upon the exercise of the Right
or Rights represented hereby, nor will anything contained herein
or in the Rights Agreement be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the
Company or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting
stockholders (except as provided in the Rights Agreement), or to
receive dividends or subscription rights, or otherwise, until the
Right or Rights evidenced by this Right Certificate have been
exercised in accordance with the provisions of the Rights
Agreement.
This Right Certificate will not be valid or obligatory for any
purpose until it has been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal. Dated as of ________, ____.
[SEAL]
ATTEST: XXXXXX INTERNATIONAL INDUSTRIES,
INCORPORATED
By:
----------------------------
Name:
Title:
Countersigned:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
By:
----------------------------
Authorized Signature
B-3
48
Form of Reverse Side of Right Certificate
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED, _____________ hereby sells, assigns and
transfers unto
____________________________________________________
(Please print name and address of transferee)
____________________________________________________
this Right Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint _______________ Attorney, to transfer the within Right
Certificate on the books of the within-named Company, with full
power of substitution.
Dated: __________, ____
_______________________________
Signature
Signature Guaranteed:
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49
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ]
are not being sold, assigned, transferred, split up, combined or
exchanged by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Person (as such
terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was
or became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: __________, ____
____________________________________
Signature
B-5
50
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise the Right Certificate)
To Xxxxxx International Industries, Incorporated:
The undersigned hereby irrevocably elects to exercise __________
Rights represented by this Right Certificate to purchase the one
one-hundredths of a Preferred Share or other securities issuable
upon the exercise of such Rights and requests that certificates
for such securities be issued in the name of and delivered to:
Please insert social security
or other identifying number: ____________________________________
_________________________________________________________________
(Please print name and address of transferee)
_________________________________________________________________
If such number of Rights is not all the Rights evidenced by this
Right Certificate, a new Right Certificate for the balance
remaining of such Rights will be registered in the name of and
delivered to:
Please insert social security
or other identifying number:
_______________________________________________________________
_______________________________________________________________
(Please print name and address of transferee)
_______________________________________________________________
Dated: __________, ____
_____________________________________
Signature
Signature Guaranteed:
B-6
51
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) the Rights evidenced by this Right Certificate [ ] are
[ ] are not being exercised by or on behalf of a Person who is
or was an Acquiring Person or an Affiliate or Associate of any
such Person (as such terms are defined pursuant to the Rights
Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it [ ] did [ ] did not acquire the Rights
evidenced by this Right Certificate from any Person who is, was,
or became an Acquiring Person or an Affiliate or Associate of an
Acquiring Person.
Dated: __________, ____
Signature
NOTICE
Signatures on the foregoing Form of Assignment and Form of
Election to Purchase and in the related Certificates must
correspond to the name as written upon the face of this Right
Certificate in every particular, without alteration or
enlargement or any change whatsoever.
Signatures must be guaranteed by an eligible guarantor
institution (banks, stockbrokers, savings and loan associations
and credit unions with membership in an approved medallion
signature program) pursuant to Rule 17Ad-15 under the Securities
Exchange Act of 1934, as amended.
B-7
52
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
The Board of Directors (the "Board") of Xxxxxx International
Industries, Incorporated (the "Company") has declared a dividend
distribution of one right (a "Right") for each outstanding share
of Common Stock, par value $.01 per share (the "Common Shares"),
of the Company. The distribution is payable on December 27, 1999
(the "Record Date") to the stockholders of record as of the close
of business on the Record Date. Each Right entitles the
registered holder thereof to purchase from the Company one
one-hundredth of a share of Series A Junior Participating
Preferred Stock, par value $.01 per share (the "Preferred
Shares"), of the Company at a price (the "Purchase Price") of
$250 per one one-hundredth of a Preferred Share, subject to
adjustment. The description and terms of the Rights are set
forth in a Rights Agreement, dated as of December 13, 1999 (the
"Rights Agreement"), between the Company and ChaseMellon
Shareholder Services, L.L.C., as Rights Agent (the "Rights
Agent").
Under the Rights Agreement, the Rights will be evidenced by the
certificates evidencing Common Shares until the earlier (the
"Distribution Date") of: (i) the close of business on the tenth
calendar day following the first date (the "Share Acquisition
Date") of public announcement that a person or group (other than
the Company, a subsidiary or employee benefit or stock ownership
plan of the Company or any of its affiliates or associates),
together with its affiliates and associates, has acquired
beneficial ownership of 15% or more of the outstanding Common
Shares (any such person or group being hereinafter called an
"Acquiring Person") or (ii) the close of business on the tenth
business day (or such later date as may be specified by the
Board) following the commencement of a tender offer or exchange
offer by a person (other than the Company, a subsidiary or
employee benefit or stock ownership plan of the Company or any of
its affiliates or associates), the consummation of which would
result in beneficial ownership by such person of 15% or more of
the outstanding Common Shares.
The Rights Agreement provides that, until the Distribution Date,
the Rights may be transferred with and only with the Common
Shares. Until the Distribution Date (or earlier redemption,
exchange or expiration of the Rights), any certificate evidencing
Common Shares of the Company issued upon transfer or new issuance
of the Common Shares will contain a notation incorporating the
Rights Agreement by reference. Until the Distribution Date (or
earlier redemption, exchange or expiration of the Rights), the
surrender for transfer of any certificates evidencing Common
Shares will also constitute the transfer of the Rights associated
with such certificates. As soon as practicable following the
Distribution Date, separate certificates evidencing the Rights
("Right Certificates") will be mailed to holders of record of
Common Shares as of the close of business on the Distribution
Date and such separate Right Certificates alone will evidence the
Rights. No Right is exercisable at any time prior to the
Distribution Date. The Rights will expire on the tenth
anniversary of the Record Date (the "Final Expiration Date")
unless earlier redeemed, exchanged or amended by the Company as
described below. Until a Right is exercised, the holder thereof,
as such, will have no rights as a stockholder of the Company,
including the right to vote or to receive dividends.
The Purchase Price payable, and the number of the Preferred
Shares or other securities issuable, upon exercise of the Rights
will be subject to adjustment from
C-1
53
time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification
of, the Preferred Shares, (ii) upon the grant to holders of
Preferred Shares of certain rights or warrants to subscribe for
or purchase the Preferred Shares at a price, or securities
convertible into the Preferred Shares with a conversion price,
less than the then-current market price of the Preferred Shares,
or (iii) upon the distribution to holders of the Preferred Shares
of evidences of indebtedness, cash (excluding regular periodic
cash dividends), assets, stock (excluding dividends payable in
the Preferred Shares) or subscription rights or warrants (other
than those referred to above). The number of outstanding Rights
and the number of one one-hundredths of the Preferred Shares
issuable upon exercise of each Right will be subject to
adjustment in the event of a stock dividend on the Common Shares
payable in Common Shares or a subdivision, combination or
reclassification of Common Shares occurring, in any such case,
prior to the Distribution Date.
The Preferred Shares issuable upon exercise of the Rights will
not be redeemable. Each Preferred Share will be entitled, in
connection with the declaration of a dividend on the Common
Shares, to a preferential dividend payment equal to the greater
of (i) $1.00 per share and (ii) an amount equal to 100 times the
related dividend declared per Common Share. Subject to customary
anti-dilution provisions, in the event of liquidation, the
holders of Preferred Shares will be entitled to a preferential
liquidation payment equal to the greater of (a) $100 per share
and (b) an amount equal to 100 times the liquidation payment made
per Common Share. Because of the nature of the Preferred Shares'
dividend, voting and liquidation rights, the value of the one
one-hundredth interest in a Preferred Share purchasable upon
exercise of a Right should approximate the value of one Common
Share.
Rights will be exercisable to purchase Preferred Shares only
after the Distribution Date occurs and prior to the occurrence of
a Flip-in Event as described below. A Distribution Date
resulting from the commencement of a tender offer or exchange
offer described in clause (ii) of the second paragraph of this
summary could precede the occurrence of a Flip-in Event and thus
result in the Rights being exercisable to purchase Preferred
Shares. A Distribution Date resulting from any occurrence
described in clause (i) of the second paragraph of this summary
would necessarily follow the occurrence of a Flip-in Event and
thus result in the Rights being exercisable to purchase Common
Shares or other securities as described below.
Under the Rights Agreement, in the event (a "Flip-in Event") that
(i) any person or group, together with its affiliates and
associates, becomes an Acquiring Person (ii) any Acquiring Person
or any affiliate or associate thereof merges into or combines
with the Company and the Company is the surviving corporation,
(iii) any Acquiring Person or any affiliate or associate thereof
effects certain other transactions with the Company, or (iv)
during such time as there is an Acquiring Person the Company
effects certain transactions, in each case as described in the
Rights Agreement, then, in each such case, proper provision will
be made so that from and after the latest of the Share
Acquisition Date, the Distribution Date and the date of the
occurrence of such Flip-in Event each holder of a Right, other
than Rights that are or were owned beneficially by an Acquiring
Person (which, from and after the date of a Flip-in Event, will
be null and void), will have the right to receive, upon exercise
thereof at the then-current exercise price of the Right, that
number of Common Shares (or, under certain circumstances, an
economically
C-2
54
equivalent security or securities of the Company) that at the
time of such Flip-in Event have a market value of two times the
exercise price of the Right.
In the event (a "Flip-over Event") that, at any time after a
person has become an Acquiring Person, (i) the Company merges
with or into any person and the Company is not the surviving
corporation, (ii) any person merges with or into the Company and
the Company is the surviving corporation, but all or part of the
Common Shares are changed or exchanged for stock or other
securities of any other person or cash or any other property, or
(iii) 50% or more of the Company's assets or earning power,
including securities creating obligations of the Company, are
sold, in each case as described in the Rights Agreement, then,
and in each such case, proper provision will be made so that from
and after the latest of the Share Acquisition Date, the
Distribution Date and the date of the occurrence of such Flip-
over Event, each holder of a Right, other than Rights which have
become null and 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 (or, under
certain circumstances, an economically equivalent security or
securities) of such other person that at the time of such Flip-
over Event have a market value of two times the exercise price of
the Right.
From and after the later of the Share Acquisition Date and the
Distribution Date, Rights (other than any Rights that have become
null and void) will be exercisable as described above, upon
payment of the aggregate exercise price in cash. In addition, at
any time after the later of the Share Acquisition Date and the
Distribution Date and prior to the acquisition by any person or
group of affiliated or associated persons of 50% or more of the
outstanding Common Shares, the Company may exchange the Rights
(other than any rights that have become null and void), in whole
or in part, at an exchange ratio of one Common Share per Right
(subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment in
the Purchase Price of at least 1%. The Company will not be
required to issue fractional Preferred Shares (other than
fractions that are integral multiples of one one-hundredth of a
Preferred Share, which may, at the option of the Company, be
evidenced by depositary receipts) or fractional Common Shares or
other securities issuable upon the exercise of Rights. In lieu
of issuing such securities, the Company may make a cash payment,
as provided in the Rights Agreement.
The Company may, at its option, redeem the Rights in whole, but
not in part, at a price of $.01 per Right, subject to adjustment
(the "Redemption Price"), at any time prior to the close of
business on the later of the Distribution Date and the Share
Acquisition Date. Immediately upon any redemption of the Rights,
the right to exercise the Rights will terminate and the only
right of the holders of Rights will be to receive the Redemption
Price.
The Rights Agreement may be amended by the Company without the
approval of any holders of Rights Certificates, including
amendments that increase or decrease the Purchase Price, that add
other events requiring adjustment to the Purchase Price payable
and the number of the Preferred Shares or other securities
issuable upon the exercise of the Rights or that modify
procedures relating to the redemption of the Rights, except that
no amendment may be made that decreases the stated Redemption
Price to an amount less than $.01 per Right.
C-3
55
The Board will have the exclusive power and authority to
administer the Rights Agreement and to exercise all rights and
powers specifically granted to the Board or to the Company
therein, or as may be necessary or advisable in the
administration of the Rights Agreement, including without
limitation the right and power to interpret the provisions of the
Rights Agreement and to make all determinations deemed necessary
or advisable for the administration of the Rights Agreement
(including any determination to redeem or not redeem the Rights
or to amend or not amend the Rights Agreement). All such
actions, calculations, interpretations and determinations
(including any omission with respect to any of the foregoing)
which are done or made by the Board in good faith will be final,
conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties and will not subject
the Board to any liability to any person, including without
limitation the Rights Agent and the holders of the Rights.
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 is as of the Record Date,
does not purport to be complete and is qualified in its entirety
by reference to the Rights Agreement, which is incorporated
herein by this reference.
C-4
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TABLE OF CONTENTS
Page
Certain Definitions 1
Appointment of Rights Agent 4
Issue of Right Certificates 5
Form of Right Certificates 6
Countersignature and Registration 6
Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen
Right Certificates 7
Exercise of Rights; Purchase Price; Expiration Date
of Rights 8
Cancellation and Destruction of Right Certificates 9
Company Covenants Concerning Securities and Rights 9
Record Date 11
Adjustment of Purchase Price, Number and Kind of
Securities or Number of Rights 11
Certificate of Adjusted Purchase Price or Number of
Securities 19
Consolidation, Merger or Sale or Transfer of Assets
or Earning Power 19
Fractional Rights and Fractional Securities 22
Rights of Action 23
Agreement of Rights Holders 23
Right Certificate Holder Not Deemed a Stockholder 24
Concerning the Rights Agent 24
Merger or Consolidation or Change of Name of
Rights Agent 25
Duties of Rights Agent 25
Change of Rights Agent 27
Issuance of New Right Certificates 28
Redemption 29
Exchange 29
Notice of Certain Events 30
57
Page
Notices 31
Supplements and Amendments 31
Successors; Certain Covenants 32
Benefits of This Agreement 32
Governing Law 32
Severability 32
Descriptive Headings, Etc 33
Determinations and Actions by the Board 33
Counterparts 33
EXHIBIT A A-1
EXHIBIT B B-1
EXHIBIT C C-1
58
