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EXHIBIT 4.2
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STOCKHOLDER RIGHTS AGREEMENT
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LAI WORLDWIDE, INC.
AND
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
AS RIGHTS AGENT
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DATED AS OF DECEMBER 30, 1998
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TABLE OF CONTENTS
Page
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SECTION 1 CERTAIN DEFINITIONS................................................................... 1
SECTION 2 APPOINTMENT OF RIGHTS AGENT........................................................... 4
SECTION 3 ISSUE OF RIGHT CERTIFICATES........................................................... 5
SECTION 4 FORM OF RIGHT CERTIFICATES............................................................ 6
SECTION 5 COUNTERSIGNATURE AND REGISTRATION..................................................... 7
SECTION 6 TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE
OF RIGHT CERTIFICATES; MUTILATED, DESTROYED, LOST OR
STOLEN RIGHT CERTIFICATES................................................................... 7
SECTION 7 EXERCISE OF RIGHTS, PURCHASE PRICE; EXPIRATION DATE
OF RIGHTS................................................................................... 8
SECTION 8 CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.................................... 9
SECTION 9 AVAILABILITY OF SHARES OF PREFERRED STOCK............................................. 9
SECTION 10 PREFERRED STOCK RECORD DATE......................................................... 11
SECTION 11 ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES
AND NUMBER OF RIGHTS....................................................................... 11
SECTION 12 CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER
OF SHARES.................................................................................. 18
SECTION 13 CONSOLIDATION, MERGER, SHARE EXCHANGE OR SALE
OR TRANSFER OF ASSETS OR EARNINGS POWER.................................................... 18
SECTION 14 FRACTIONAL RIGHTS AND FRACTIONAL SHARES............................................. 22
SECTION 15 RIGHTS OF ACTION.................................................................... 23
SECTION 16 AGREEMENT OF RIGHT HOLDERS.......................................................... 23
SECTION 17 RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER................................... 24
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SECTION 18 CONCERNING THE RIGHTS AGENT......................................................... 24
SECTION 19 MERGER OR CONSOLIDATION OR CHANGE OF NAME OF
RIGHTS AGENT............................................................................... 25
SECTION 20 DUTIES OF RIGHTS AGENT.............................................................. 25
SECTION 21 CHANGE OF RIGHTS AGENT.............................................................. 28
SECTION 22 ISSUANCE OF NEW RIGHT CERTIFICATES.................................................. 28
SECTION 23 REDEMPTION.......................................................................... 29
SECTION 24 EXCHANGE............................................................................ 29
SECTION 25 NOTICE OF CERTAIN EVENTS............................................................ 30
SECTION 26 NOTICES............................................................................. 31
SECTION 27 SUPPLEMENTS AND AMENDMENTS; CERTAIN BOARD ACTIONS................................... 32
SECTION 28 SUCCESSORS.......................................................................... 33
SECTION 29 BENEFITS OF THIS AGREEMENT.......................................................... 33
SECTION 30 DETERMINATIONS AND ACTIONS BY THE BOARD
OF DIRECTORS............................................................................... 33
SECTION 31 SEVERABILITY........................................................................ 34
SECTION 32 GOVERNING LAW....................................................................... 34
SECTION 33 COUNTERPARTS........................................................................ 34
SECTION 34 DESCRIPTIVE HEADINGS................................................................ 34
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STOCKHOLDER RIGHTS AGREEMENT
THIS STOCKHOLDER RIGHTS AGREEMENT (this "Agreement") is made and
entered into on and effective as of the 30th day of December, 1998 by and
between LAI WORLDWIDE, INC., a Florida corporation (the "Company" or "LAI"), and
CHASEMELLON SHAREHOLDER SERVICES, L.L.C., a New Jersey limited liability company
(the "Rights Agent").
The Board of Directors of the Company (the "Board of Directors") has
authorized and declared a dividend of one preferred stock purchase right (a
"Right") for each share of Common Stock (as defined below) of the Company
outstanding as of the close of business (as defined below) on December 30, 1998
(the "Record Date") each Right representing the right to purchase one-hundredth
(subject to adjustment) of a share of Preferred Stock (as defined below), upon
the terms and subject to the conditions herein set forth, and the Board of
Directors has further authorized and directed the issuance of one Right (subject
to adjustment as provided herein) with respect to each share of Common Stock
that shall become outstanding between the Record Date and the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date (as such
terms are defined below); provided, however, that Rights may be issued with
respect to shares of Common Stock that shall become outstanding after the
Distribution Date and prior to the Redemption Date and the Final Expiration Date
in accordance with Section 22 hereof.
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS.
For purposes of this Agreement, the following terms have the meaning
indicated:
(a) "Acquiring Person" shall mean any Person who or which shall at any
time be the Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding, but shall not include a Person who is at such time an Exempt
Person; provided, however, that if the Board of Directors determines in good
faith that a Person who would otherwise be an Acquiring Person has become such
inadvertently (including, without limitation, because (i) such Person was
unaware that it Beneficially Owned a percentage of the shares of Common Stock
then outstanding that would otherwise cause such Person to be a Acquiring Person
or (ii) such Person was aware of the extent of its Beneficial Ownership of
Common Stock but had no actual knowledge of the consequences of such Beneficial
Ownership under this Stockholder Rights Agreement) and without any intention of
changing or influencing control of the Company, and such Person, as promptly as
practicable after being advised of such determination divested or divests
himself or itself of Beneficial Ownership of a sufficient number of shares of
Common Stock so that such Person would no longer be an Acquiring Person, then
such Person shall not be deemed to be or to have become an Acquiring Person for
any purposes of this Agreement. Notwithstanding the foregoing, no Person shall
become an Acquiring Person as the result of an acquisition of shares of Common
Stock by the Company which, by reducing the number of shares outstanding,
increases the proportionate number of shares Beneficially Owned by such Person
to 20% or more of the shares of Common Stock then outstanding, provided,
however, that if a Person shall become the Beneficial Owner of 20% or more of
the shares of Common Stock then outstanding by reason of such share acquisitions
by the Company and thereafter become the Beneficial Owner of any additional
shares of Common Stock (other than pursuant to a dividend or
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Stockholder Rights Agreement Page 2
distribution paid or made by the Company on the outstanding Common Stock in
shares of Common Stock or pursuant to a split or subdivision of the outstanding
Common Stock), then such Person shall be deemed to be an Acquiring Person unless
upon the consummation of the acquisition of such additional shares of Common
Stock such Person does not own 20% or more of the shares of Common Stock then
outstanding. For all purposes of this Agreement, any calculation of the number
of shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules
and Regulations under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as in effect on the date hereof.
(b) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), as in
effect on the date of this Agreement.
(c) A Person shall be deemed the "Beneficial Owner" of, shall be deemed
to have "Beneficial Ownership" of and shall be deemed to "Beneficially Own" any
securities:
(i) which such Person or any of such Person's Affiliates or
Associates is deemed to Beneficially Own, directly or indirectly within the
meaning of Rule 13d-3 of the General Rules and Regulations under the Exchange
Act as in effect on the date of this Agreement;
(ii) which such Person or any of such Person's Affiliates or
Associates has (A) the right to acquire (whether such right is exercisable
immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), or upon the exercise of conversion rights, exchange
rights, rights, warrants or options, or otherwise; provided, however, that a
Person shall not be deemed the Beneficial Owner of, or to Beneficially Own, (x)
securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase, (y) securities which such Person
has a right to acquire on the exercise of Rights at any time prior to the time a
Person becomes an Acquiring Person or (z) securities issuable upon exercise of
Rights from and after the time a Person becomes an Acquiring Person if such
Rights were acquired by such Person or any of such Person's Affiliates or
Associates prior to the Distribution Date or pursuant to Section 3(a) or Section
22 hereof ("Original Rights") or pursuant to Section 11(i) or Section 11(n)
hereof with respect to an adjustment to Original Rights; or (B) the right to
vote pursuant to any agreement, arrangement or understanding; provided, however,
that a Person shall not be deemed the Beneficial Owner of, or to Beneficially
Own, any security by reason of such agreement, arrangement or understanding if
the agreement, arrangement or understanding to vote such security (1) arises
solely from a revocable proxy or consent given to such Person in response to a
public proxy or consent solicitation made pursuant to, and in accordance with,
the applicable rules and regulations promulgated under the Exchange Act and (2)
is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report); or
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(iii) which are Beneficially Owned, directly or indirectly, by
any other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement, arrangement or understanding (other than customary
agreements with and between underwriters and selling group members with respect
to a bona fide public offering of securities) for the purpose of acquiring,
holding, voting (except to the extent contemplated by the proviso to Section
1(c)(ii)(B) hereof) or disposing of any securities of the Company.
(d) "Business Day" shall mean any day other than a Saturday, a Sunday,
or a day on which banking institutions in the State of Florida or the State in
which the principal office of the Rights Agent is located, are authorized or
obligated by law or executive order to close.
(e) "Close of Business" on any given date shall mean 5:00 P.M., Tampa,
Florida time on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., Tampa, Florida time on the next succeeding
Business Day.
(f) "Common Stock" when used with reference to the Company shall mean
the common stock, par value $.01 per share, of the Company. "Common Stock" when
used with reference to any Person other than the Company shall mean the capital
stock (or, in the case of an unincorporated entity, the equivalent equity
interest) with the greatest voting power of such other Person or, if such other
Person is a Subsidiary of another Person, the Person or Persons which ultimately
control such first-mentioned Person.
(g) "Current Per Share Market Price" shall have the meaning set forth
in Section 11(d) hereof.
(h) "Distribution Date" shall have the meaning set forth in Section 3
hereof.
(i) "Equivalent Preferred Shares" shall have the meaning set forth in
Section 11(b) hereof.
(j) "Exempt Person" shall mean (1) the Company, (2) any Subsidiary of
the Company, in each case including, without limitation, in its fiduciary
capacity, (3) any employee benefit plan of the Company or of any Subsidiary of
the Company, or any entity or trustee holding Common Stock for or pursuant to
the terms of any such plan or for the purpose of funding any such plan or
funding other employee benefits for employees of the Company or of any
Subsidiary of the Company, (4) any "holding company" within the meaning of
Florida Statutes Section 607.1145 that, in a merger pursuant to such section,
becomes the owner of all shares of Common Stock issued and outstanding as of
immediately prior to the consummation of such merger, or (5) until January 1,
1999, Lamalie Associates, Inc., a Florida corporation.
(k) "Final Expiration Date" shall have the meaning set forth in
Section 7 hereof.
(l) "Nasdaq" shall mean The Nasdaq Stock Market, Inc. ("Nasdaq") or any
successor organization.
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(m) "New York Stock Exchange" shall mean the New York Stock Exchange,
Inc.
(n) "Person" shall mean any individual, firm, limited liability
company, corporation or other entity, and shall include any successor (by merger
or otherwise) of such entity.
(o) "Preferred Stock" shall mean the Series A Junior Participating
Preferred Stock, par value $.01 per share, of the Company.
(p) "Record Date" shall have the meaning set forth in the preamble to
this Agreement.
(q) "Redemption Date" shall have the meaning set forth in Section 7
hereof.
(r) "Securities Act" shall mean the Securities Act of 1933, as amended.
(s) "Stock Acquisition Date" shall mean the first date of public
announcement (which for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) of the Exchange Act) by the
Company or an Acquiring Person that an Acquiring Person has become such or such
earlier date as a majority of the Board of Directors shall become aware of the
existence of an Acquiring Person.
(t) "Subsidiary" of any Person shall mean any corporation or other
entity of which securities or other ownership interests having ordinary voting
power sufficient to elect a majority of the board of directors or other persons
performing similar functions are Beneficially Owned, directly or indirectly, by
such Person, and any corporation or other entity that is otherwise controlled by
such Person.
(u) "Trading Day" shall mean, as to any security, (i) if the security
is listed or admitted to trading on any national securities exchange, any day on
which the principal national securities exchange on which such security is
listed or admitted to trading is open for the transaction of business, or (ii)
if the security is not listed or admitted to trading on any national securities
exchange but is listed or admitted to trading or has prices for such security
quoted on any market or quotation system operated by Nasdaq, any day on which
such market or quotation system is open for the transaction of business, or
(iii) otherwise, a Business Day.
SECTION 2. APPOINTMENT OF RIGHTS AGENT.
The Company hereby appoints the Rights Agent to act as agent for the
Company in accordance with the terms and conditions hereof, and the Rights Agent
hereby accepts such appointment. The Company may from time to time appoint such
co-Rights Agents as it may deem necessary or desirable upon ten (10) days' prior
written notice to the Rights Agent. No co-Rights Agent shall have any duty to
supervise, nor shall any co-Rights Agent have any liability for or with respect
to any act or omission of, any other co-Rights Agent.
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SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the tenth day after the Stock Acquisition
Date or (ii) the tenth business day (or such later date as may be determined by
action of the Board of Directors prior to such time as any Person becomes an
Acquiring Person) after the date of the commencement by any Person (other than
an Exempt Person) of, or of the first public announcement of the intention of
such Person (other than an Exempt Person) to commence, a tender or exchange
offer the consummation of which would result in any Person (other than an Exempt
Person) becoming the Beneficial Owner of shares of Common Stock aggregating 20%
or more of the Common Stock then outstanding (including any such date which is
after the date of this Agreement and prior to the issuance of the Rights), the
earlier of such dates being herein referred to as the "Distribution Date"), (x)
the Rights will be evidenced (subject to the provisions of Section 3(b) hereof)
by the certificates for Common Stock registered in the names of the holders
thereof and not by separate Right Certificates, and (y) the Rights will be
transferable only in connection with the transfer of Common Stock. As soon as
practicable after the Distribution Date, the Company will prepare and execute,
the Rights Agent will countersign, and the Company will send or cause to be sent
(and the Rights Agent will, if requested and provided with all necessary
information, send) by first-class, insured, postage-prepaid mail, to each record
holder of Common Stock as of the close of business on the Distribution Date
(other than any Acquiring Person or any Associate or Affiliate of an Acquiring
Person), at the address of such holder shown on the records of the Company, a
Right Certificate, in substantially the form of Exhibit A hereto (a "Right
Certificate"), evidencing one Right (subject to adjustment as provided herein)
for each share of Common Stock so held. As of the Distribution Date, the Rights
will be evidenced solely by such Right Certificates.
(b) On the Record Date, or as soon as practicable thereafter, the
Company will send a copy of a Summary of Stockholder Rights Agreement, in
substantially the form of Exhibit B hereto (the "Summary of Stockholder Rights
Agreement"), by first-class, postage-prepaid mail, to each record holder of
Common Stock as of the close of business on the Record Date (other than any
Acquiring Person or any Associate or Affiliate of any Acquiring Person), at the
address of such holder shown on the records of the Company. With respect to
certificates for Common Stock outstanding as of the Record Date, until the
Distribution Date, the Rights will be evidenced by such certificates registered
in the names of the holders thereof together with the Summary of Stockholder
Rights Agreement. Until the Distribution Date (or the earlier of the Redemption
Date or the Final Expiration Date), the surrender for transfer of any
certificate for Common Stock outstanding on the Record Date, with or without a
copy of the Summary of Stockholder Rights Agreement, shall also constitute the
transfer of the Rights associated with the Common Stock represented thereby.
(c) Certificates issued for Common Stock (including, without
limitation, upon transfer of outstanding Common Stock, disposition of Common
Stock out of treasury stock or issuance or reissuance of Common Stock out of
authorized but unissued shares) after the Record Date but prior to the earliest
of the Distribution Date, the Redemption Date or the Final Expiration Date shall
have impressed on, printed on, written on or otherwise affixed to them the
following legend:
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This certificate also evidences and entitles the holder hereof to
certain rights as set forth in a Stockholder Rights Agreement between
LAI Worldwide, Inc. (the "Company") and ChaseMellon Shareholder
Services, L.L.C. dated as of December 30, 1998 as the same may be
amended from time to time (the "Rights Agreement"), the terms of which
are hereby incorporated herein by reference and a copy of which is on
file at the principal executive offices of the Company. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will
be evidenced by separate certificates and will no longer be evidenced
by this certifi cate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement without charge after
receipt of a written request therefor. Under certain circumstances, as
set forth in the Rights Agreement, Rights owned by or transferred to
any Person who becomes an Acquiring Person (as defined in the Rights
Agreement) and certain transferees thereof will become null and void
and will no longer be transferable.
With respect to such certificates containing the foregoing legend, until the
Distribution Date, the Rights associated with the Common Stock represented by
such certificates shall be evidenced by such certificates alone, and the
surrender for transfer of any such certificate, except as otherwise provided
herein, shall also constitute the transfer of the Rights associated with the
Common Stock represented thereby. In the event that the Company purchases or
otherwise acquires any Common Stock after the Record Date but prior to the
Distribution Date, any Rights associated with such Common Stock shall be deemed
cancelled and retired so that the Company shall not be entitled to exercise any
Rights associated with the Common Stock which are no longer outstanding.
Notwithstanding this Section 3(c), the omission of a legend shall not
affect the enforceability of any part of this Agreement or the rights of any
holder of the Rights.
SECTION 4. FORM OF RIGHT CERTIFICATES.
The Right Certificates (and the forms of election to purchase shares
and of assignment to be printed on the reverse thereof) shall be substantially
in the form set forth in Exhibit A hereto and may have such marks of
identification or designation and such legends, summaries or endorsements
printed thereon as the Company may deem appropriate (which do not affect the
duties and 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, market or quotation system on which
the Rights may from time to time be listed or admitted to trading or on which
prices therefor may be quoted, or to conform to usage. Subject to the provisions
of Sections 11, 13 and 22 hereof, the Right Certificates shall entitle the
holders thereof to purchase such number of one one-hundredths of a share of
Preferred Stock as shall be set forth therein at the price per one one-hundredth
of a share of Preferred Stock set forth therein (the "Purchase Price"), but the
number of such one one-hundredths of a share of Preferred Stock and the Purchase
Price shall be subject to adjustment as provided herein.
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SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on behalf of the Company
by the Chairman of the Board of Directors, the President, any of the Vice
Presidents, the Treasurer or the Controller of the Company, either manually or
by facsimile signature, shall have affixed thereto the Company's seal or a
facsimile thereof, and shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be manually countersigned by the Rights Agent and shall not
be valid for any purpose unless countersigned. In case any officer of the
Company who shall have signed any of the Right Certificates shall cease to be
such officer of the Company before countersignature by the Rights Agent and
issuance and delivery by the Company, such Right Certificates, nevertheless, may
be countersigned by the Rights Agent and issued and delivered by the Company
with the same force and effect as though the Person who signed such Right
Certificates had not ceased to be such officer of the Company; and any Right
Certificate may be signed on behalf of the Company by any Person who, at the
actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Agreement any such Person was not such an officer.
(b) Following the Distribution Date and receipt by the Rights Agent of
any relevant information, the Rights Agent will keep or cause to be kept, at an
office or agency designated for such purpose, books for registration and
transfer of the Right Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates and
the date of each of the Right Certificates.
SECTION 6. TRANSFER, SPLIT UP, COMBINATION AND EXCHANGE OF RIGHT CERTIFICATES;
MUTILATED, DESTROYED, LOST OR STOLEN RIGHT CERTIFICATES.
(a) Subject to the provisions of Sections 7(e), 11(a)(ii) and 14
hereof, at any time after the Close of Business on the Distribution Date, and
prior to the close of business on the earlier of the Redemption Date or the
Final Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
one one-hundredths of a share of Preferred Stock as the Right Certificate or
Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the office or
agency of the Rights Agent designated for such purpose. Thereupon the Rights
Agent shall countersign and deliver to the Person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental
charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates. The Rights Agent shall have no
duty or obligation under this Section unless and until it is satisfied that all
such taxes and/or charges have been paid.
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(b) Subject to the provisions of Section 11(a)(ii) hereof, at any time
after the Distribution Date and prior to the close of business on the earlier of
the Redemption Date or the Final Expiration Date, upon receipt by the Company
and the Rights Agent of evidence satisfactory to them of the loss, theft,
destruction or mutilation of a Right Certificate, and, in case of loss, theft or
destruction, of indemnity or security reasonably satisfactory to them, and, at
the Company's request, reimbursement to the Company and the Rights Agent of all
reasonable expenses incidental thereto, and upon surrender to the Rights Agent
and cancellation of the Right Certificate if mutilated, the Company will make
and deliver a new Right Certificate of like tenor to the Rights Agent for
delivery to the registered holder in lieu of the Right Certificate so lost,
stolen, destroyed or mutilated.
SECTION 7. EXERCISE OF RIGHTS, PURCHASE PRICE; EXPIRATION DATE OF RIGHTS.
(a) Except as otherwise provided herein, the Rights shall become
exercisable on the Distribution Date, and thereafter the registered holder of
any Right Certificate may, subject to Section 11(a)(ii) hereof and except as
otherwise provided herein, exercise the Rights evidenced thereby in whole or in
part upon surrender of the Right Certificate, with the form of election to
purchase on the reverse side thereof duly and properly executed, to the Rights
Agent at the office or agency of the Rights Agent designated for such purpose,
together with payment of the Purchase Price for each one one-hundredth of a
share of Preferred Stock as to which the Rights are exercised, at any time which
is both after the Distribution Date and prior to the earliest of (i) the close
of business on November 15, 2008 (the "Final Expiration Date"), (ii) the time at
which the Rights are redeemed as provided in Section 23 hereof (the "Redemption
Date") or (iii) the time at which such Rights are exchanged as provided in
Section 24 hereof.
(b) The Purchase Price shall be initially $50 for each one
one-hundredth of a share of Preferred Stock purchasable upon the exercise of a
Right. The Purchase Price and the number of one one-hundredths of a share of
Preferred Stock or other securities or property to be acquired upon exercise of
a Right shall be subject to adjustment from time to time as provided in Sections
11 and 13 hereof and shall be payable in lawful money of the United States of
America in accordance with Section 7(c) hereof.
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase duly executed, accompanied by payment of the aggregate Purchase Price
for the shares of Preferred Stock to be purchased and an amount equal to any
applicable tax or charge required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof, in cash or by certified check,
cashier's check or money order payable to the order of the Company, the Rights
Agent shall thereupon promptly (i) (A) requisition from any transfer agent of
the Preferred Stock certificates for the number of shares of Preferred Stock to
be purchased and the Company hereby irrevocably authorizes its transfer agent to
comply with all such requests, or (B) requisition from the depositary agent
depositary receipts representing interests in such number of one one-hundredths
of a share of Preferred Stock as are to be purchased (in which case certificates
for the Preferred Stock represented by such receipts shall be deposited by the
transfer agent with the depositary agent) and the Company hereby directs the
depositary agent to comply with
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such request, (ii) when appropriate, requisition from the Company the amount of
cash to be paid in lieu of issuance of fractional shares in accordance with
Section 14 hereof, (iii) promptly after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder and (iv) when appropriate, after receipt,
promptly deliver such cash to or upon the order of the registered holder of such
Right Certificate.
(d) Except as otherwise provided herein, in case the registered holder
of any Right Certificate shall exercise less than all the Rights evidenced
thereby, a new Right Certificate evidencing Rights equivalent to the exercisable
Rights remaining unexercised shall be issued by the Rights Agent to the
registered holder of such Right Certificate or to his duly authorized assigns,
subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary, neither
the Rights Agent nor the Company shall be obligated to undertake any action with
respect to a registered holder of Rights upon the occurrence of any purported
transfer or exercise of Rights pursuant to Section 6 hereof or this Section 7
unless such registered holder shall have (i) properly completed and signed the
certificate contained in the form of assignment or election to purchase set
forth on the reverse side of the Rights Certificate surrendered for such
transfer or exercise and (ii) provided such additional evidence of the identity
of the Beneficial Owner (or former Beneficial Owner) thereof as the Company or
the Rights Agent shall reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF RIGHT CERTIFICATES.
All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or to any of its agents, be delivered to the Rights Agent for cancellation or in
cancelled form, or, if surrendered to the Rights Agent, shall be cancelled by
it, and no Right Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement. The Company
shall deliver to the Rights Agent for cancellation and retirement, and the
Rights Agent shall so cancel and retire, any other Right Certificate purchased
or acquired by the Company otherwise than upon the exercise thereof. The Rights
Agent shall deliver all cancelled Right Certificates to the Company, or shall,
at the written request of the Company, destroy such cancelled Right
Certificates, and in such case shall deliver a certificate of destruction
thereof to the Company.
SECTION 9. AVAILABILITY OF SHARES OF PREFERRED STOCK.
(a) The Company covenants and agrees that it will cause to be reserved
and kept available out of its authorized and unissued shares of Preferred Stock
or any shares of Preferred Stock held in its treasury, the number of shares of
Preferred Stock that will be sufficient to permit the exercise in full of all
outstanding Rights.
(b) If at any time, and for so long as, the shares of Preferred Stock
(and, following the time that a Person becomes an Acquiring Person, shares of
Common Stock and other securities) issuable upon
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the exercise of Rights may be listed or admitted to trading or may have prices
therefor quoted on any national securities exchange or any market or quotation
system, the Company shall use its best efforts to cause, from and after such
time as the Rights become exercisable, all shares reserved for such issuance to
be listed or admitted to trading or have prices therefor quoted on such
exchange, market or quotation system upon official notice of issuance upon such
exercise.
(c) From and after such time as the Rights become exercisable, the
Company shall use its best efforts, if then necessary to permit the issuance of
shares of Preferred Stock (and following the time that a Person first becomes an
Acquiring Person, shares of Common Stock and other securities) upon the exercise
of Rights, to register and qualify such shares of Preferred Stock (and following
the time that a Person first becomes an Acquiring Person, shares of Common Stock
and other securities) under the Securities Act and any applicable state
securities or "Blue Sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as possible after such filing and keep such registration and
qualifications effective until the earlier of the date as of which the Rights
are no longer exercisable for such securities and the Final Expiration Date. The
Company may temporarily suspend, for a period of time not to exceed 90 days, the
exercisability of the Rights in order to prepare and file a registration
statement under the Securities Act and permit it to become effective. Upon any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect (with prompt
written notice to the Rights Agent of such announcement). Notwithstanding any
provision of this Agreement to the contrary, the Rights shall not be exercisable
in any jurisdiction unless the requisite qualification in such jurisdiction
shall have been obtained and until a registration statement under the Securities
Act (if required) shall have been declared effective.
(d) The Company covenants and agrees that it will take all such action
as may be necessary to ensure that all shares of Preferred Stock (and, following
the time that a Person becomes an Acquiring Person, shares of Common Stock and
other securities) delivered upon exercise of Rights shall, at the time of
delivery of the certificates therefor (subject to payment of the Purchase
Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(e) The Company further covenants and agrees that it will pay when due
and payable any and all federal and state taxes and charges which may be payable
in respect of the issuance or delivery of the Right Certificates or of any
shares of Preferred Stock (or shares of Common Stock or other securities) upon
the exercise of Rights. The Company shall not, however, be required to pay any
tax or charge which may be payable in respect of any transfer or delivery of
Right Certificates to a Person other than, or the issuance or delivery of
certificates or depositary receipts for the Preferred Stock (or shares of Common
Stock or other securities) in a name other than that of, the registered holder
of the Right Certificate evidencing Rights surrendered for exercise or to issue
or deliver any certificates or depositary receipts for Preferred Stock (or
shares of Common Stock or other securities) upon the exercise of any Rights
until any such tax or charge shall have been paid (any such tax or charge being
payable by that holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's reasonable satisfaction that no
such tax or charge is due.
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Stockholder Rights Agreement Page 11
SECTION 10. PREFERRED STOCK RECORD DATE.
Each Person in whose name any certificate for Preferred Stock is issued
upon the exercise of Rights shall for all purposes be deemed to have become the
holder of record of the shares of Preferred Stock represented thereby on, and
such certificate shall be dated, the date upon which the Right Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and any applicable taxes or charges) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock
transfer books of the Company are closed, such Person shall be deemed to have
become the record holder of such shares on, and such certificate shall be dated,
the next succeeding Business Day on which the Preferred Stock transfer books of
the Company are open. Prior to the exercise of the Rights evidenced thereby, the
holder of a Right Certificate shall not be entitled to any rights of a holder of
Preferred Stock for which the Rights shall be exercisable, including, without
limitation, the right to vote or to receive dividends or other distributions,
and shall not be entitled to receive any notice of any proceedings of the
Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER OF SHARES AND NUMBER OF RIGHTS.
The Purchase Price, the number of shares of Preferred Stock or other
securities or property purchasable upon exercise of each Right and the number of
Rights outstanding are subject to adjustment from time to time as provided in
this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare a dividend on the Preferred Stock payable in shares
of Preferred Stock, (B) subdivide the outstanding Preferred Stock, (C) combine
the outstanding Preferred Stock into a smaller number of Preferred Stock or (D)
issue any shares of its capital stock in a reclassification of the Preferred
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a), the Purchase Price in effect at the
time of the Record Date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of shares
of capital stock issuable on such date, shall be proportionately adjusted so
that the holder of any Right exercised after such time shall be entitled to
receive the aggregate number and kind of shares of capital stock which, if such
Right had been exercised immediately prior to such date and at a time when the
Preferred Stock transfer books of the Company were open, the holder would have
owned upon such exercise and been entitled to receive by virtue of such
dividend, subdivision, combination or reclassification.
(ii) Subject to Section 24 hereof, in the event that any Person
becomes an Acquiring Person, then (A) the Purchase Price shall be adjusted to be
the Purchase Price in effect immediately prior to such Person becoming an
Acquiring Person multiplied by the number of one one-hundredths of a share of
Preferred Stock for which a Right was exercisable immediately prior to such
Person becoming an Acquiring Person, whether or not such Right was then
exercisable, and (B) each holder of a Right, except as otherwise provided in
this Section 11(a)(ii) and Section 11(a)(iii) hereof, shall thereafter have the
right to receive, upon exercise at a price equal to the Purchase Price (as so
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Stockholder Rights Agreement Page 12
adjusted), in accordance with the terms of this Agreement and in lieu of shares
of Preferred Stock, such number of shares of Common Stock (or at the option of
the Company, such number of one one-hundredths of shares of Preferred Stock) as
shall equal the result obtained by (x) multiplying the then current Purchase
Price by the number of one one-hundredths of a share of Preferred Stock for
which a Right is then exercisable and dividing that product by (y) 50% of the
then Current Per Share Market Price of the Company's Common Stock (determined
pursuant to Section 11(d) hereof) on the date such Person became an Acquiring
Person; provided, however, that the Purchase Price and the number of shares of
Common Stock so receivable upon exercise of a Right shall thereafter be subject
to further adjustment as appropriate in accordance with Section 11(f) hereof.
Notwithstanding anything in this Agreement to the contrary, however, from and
after the time (the "Invalidation Time") when any Person first becomes an
Acquiring Person, any Rights that are Beneficially Owned by (x) any Acquiring
Person (or any Affiliate or Associate of any Acquiring Person), (y) a transferee
of any Acquiring Person (or any such Affiliate or Associate) who becomes a
transferee after the Invalidation Time or (z) a transferee of any Acquiring
Person (or any such Affiliate or Associate) who became a transferee prior to or
concurrently with the Invalidation Time pursuant to either (I) a transfer from
the Acquiring Person to holders of its equity securities or to any Person with
whom it has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (II) a transfer which the Board of Directors has
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 such Persons, shall be null and void without any further action
and any holder of such Rights shall thereafter have no rights whatsoever with
respect to such Rights under any provision of this Agreement. The Company shall
use all reasonable efforts to ensure that the provisions of this Section
11(a)(ii) are complied with, but shall have no liability to any holder of Right
Certificates or other Person as a result of its failure to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder. From and after the Invalidation Time, no Right
Certificate shall be issued pursuant to Section 3 or Section 6 hereof that
represents Rights that are or have become null and void pursuant to the
provisions of this Section 11(a)(ii), and any Right Certificate delivered to the
Rights Agent that represents Rights that are or have become null and void
pursuant to the provisions of this Section 11(a)(ii) shall be canceled. From and
after the occurrence of an event specified in Section 13(a) hereof, any Rights
that theretofore have not been exercised pursuant to this Section 11(a)(ii)
shall thereafter be exercisable only in accordance with Section 13 and not
pursuant to this Section 11(a)(ii).
(iii) The Company may at its option substitute for a share of
Common Stock issuable upon the exercise of Rights in accordance with Section
11(a)(ii) hereof such number or fractions of shares of Preferred Stock having an
aggregate current market value equal to the Current Per Share Market Price of a
share of Common Stock. In the event that there shall not be sufficient shares of
Common Stock issued but not outstanding or authorized but unissued to permit the
exercise in full of the Rights in accordance with Section 11(a)(ii) hereof, the
Board of Directors shall, to the extent permitted by applicable law and any
material agreements then in effect to which the Company is a party (A) determine
the excess of (1) the value of the shares of Common Stock issuable upon the
exercise of a Right in accordance with Section 11(a)(ii) hereof (the "Current
Value") over (2) the then current Purchase Price multiplied by the number of one
one-hundredths of shares of Preferred Stock for which a Right was exercisable
immediately prior to the time that the Acquiring Person
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Stockholder Rights Agreement Page 13
became such (such excess, the "Spread"), and (B) with respect to each Right
(other than Rights which have become void pursuant to Section 11(a)(ii) hereof),
make adequate provision to substitute for the shares of Common Stock issuable in
accordance with Section 11(a)(ii) hereof upon exercise of the Right and payment
of the applicable Purchase Price, (1) cash, (2) a reduction in the Purchase
Price, (3) shares of Preferred Stock or other equity securities of the Company
(including, without limitation, shares or fractions of shares of preferred stock
which, by virtue of having dividend, voting and liquidation rights substantially
comparable to those of the shares of Common Stock, are deemed in good faith by
the Board of Directors to have substantially the same value as the shares of
Common Stock (such shares of preferred stock and shares or fractions of shares
of preferred stock are hereinafter referred to as "Common Stock Equivalents"),
(4) debt securities of the Company, (5) other assets, or (6) any combination of
the foregoing, having a value which, when added to the value of the shares of
Common Stock actually issued upon exercise of such Right, shall have an
aggregate value equal to the Current Value (less the amount of any reduction in
the Purchase Price), where such aggregate value has been determined by the Board
of Directors upon the advice of a nationally recognized investment banking firm
selected in good faith by the Board of Directors; provided, however, if the
Company shall not make adequate provision to deliver value pursuant to clause
(B) above within thirty (30) days following the date that the Acquiring Person
became such (the "Section 11(a)(ii) Trigger Date"), then the Company shall be
obligated to deliver, to the extent permitted by applicable law and any material
agreements then in effect to which the Company is a party, upon the surrender
for exercise of a Right and without requiring payment of the Purchase Price,
shares of Common Stock (to the extent available), and then, if necessary, such
number or fractions of shares of Preferred Stock (to the extent available) and
then, if necessary, cash, which shares and/or cash have an aggregate value equal
to the Spread. If, upon the date any Person becomes an Acquiring Person, the
Board of Directors shall determine in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized for issuance
upon exercise in full of the Rights, then, if the Board of Directors so elects,
the thirty (30) day period set forth above may be extended to the extent
necessary, but not more than ninety (90) days after the Section 11(a)(ii)
Trigger Date, in order that the Company may seek stockholder approval for the
authorization of such additional shares (such thirty (30) day period, as it may
be extended, is herein called the "Substitution Period"). To the extent that the
Company determines that some action need be taken pursuant to the second and/or
third sentence of this Section 11(a)(iii), the Company (x) shall provide,
subject to Section 11(a)(ii) hereof and the last sentence of this Section
11(a)(iii) hereof, that such action shall apply uniformly to all outstanding
Rights and (y) may suspend the exercisability of the Rights until the expiration
of the Substitution Period in order to seek any authorization of additional
shares and/or to decide the appropriate form of distribution to be made pursuant
to such second sentence and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect (with prompt
written notice of such announcements to the Rights Agent). For purposes of this
Section 11(a)(iii), the value of the shares of Common Stock shall be the Current
Per Share Market Price (as determined pursuant to Section 11(d)(i) hereof) on
the Section 11(a)(ii) Trigger Date and the per share or fractional value of any
"Common Stock Equivalent" shall be deemed to equal the Current Per Share Market
Price of the Common Stock. The Board of Directors may, but shall not be required
to, establish procedures
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Stockholder Rights Agreement Page 14
to allocate the right to receive shares of Common Stock upon the exercise of the
Rights among holders of Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a Record Date for the issuance of
rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within 45 calendar days after such Record Date) to
subscribe for or purchase Preferred Stock (or shares having the same rights,
privileges and preferences as the Preferred Stock ("Equivalent Preferred
Shares")) or securities convertible into Preferred Stock or Equivalent
Preferred Shares at a price per share of Preferred Stock or Equivalent Preferred
Shares (or having a conversion price per share, if a security convertible into
shares of Preferred Stock or Equivalent Preferred Shares) less than the then
Current Per Share Market Price of the Preferred Stock (determined pursuant to
Section 11(d) hereof) on such Record Date, the Purchase Price to be in effect
after such Record Date shall be determined by multiplying the Purchase Price in
effect immediately prior to such Record Date by a fraction, the numerator of
which shall be the number of shares of Preferred Stock and Equivalent Preferred
Shares outstanding on such Record Date plus the number of shares of Preferred
Stock and Equivalent Preferred Shares which the aggregate offering price of the
total number of shares of Preferred Stock and/or Equivalent Preferred Shares so
to be offered (and/or the aggregate initial conversion price of the convertible
securities so to be offered) would purchase at such current market price, and
the denominator of which shall be the number of shares of Preferred Stock and
Equivalent Preferred Shares outstanding on such Record Date plus the number of
additional shares of Preferred Stock and/or Equivalent Preferred Shares to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such subscription price may
be paid in a consideration part or all of which shall be in a form other than
cash, the value of such consideration shall be as determined in good faith by
the Board of Directors, whose determination shall be described in a statement
filed with the Rights Agent. Shares of Preferred Stock and Equivalent Preferred
Shares owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be
made successively whenever such a Record Date is fixed; and in the event that
such rights, options or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such Record
Date had not been fixed.
(c) In case the Company shall fix a Record Date for the making of a
distribution to all holders of the Preferred Stock (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of indebtedness
or assets (other than a regular quarterly cash dividend or a dividend payable in
Preferred Stock) or subscription rights or warrants (excluding those referred to
in Section 11(b) hereof), the Purchase Price to be in effect after such Record
Date shall be determined by multiplying the Purchase Price in effect immediately
prior to such Record Date by a fraction, the numerator of which shall be the
then Current Per Share Market Price of the Preferred Stock (determined pursuant
to Section 11(d) hereof) on such Record Date, less the fair market value (as
determined in good faith by the Board of Directors whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one share of Preferred Stock, and the
denominator of which shall be such Current Per Share Market Price (determined
pursuant to Section 11(d) hereof) of the Preferred
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Stockholder Rights Agreement Page 15
Stock. Such adjustments shall be made successively whenever such a Record Date
is fixed; and in the event that such distribution is not so made, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be in
effect if such Record Date had not been fixed.
(d) (i) Except as otherwise provided herein, for the purpose of any
computation hereunder, the "Current Per Share Market Price" of any security on
any date shall be deemed to be the average of the daily closing prices per share
of such security for the 30 consecutive Trading Days (as such term is defined
below) immediately prior to but not including such date; provided, however, that
in the event that the Current Per Share Market Price of the security is
determined during a period following the announcement by the issuer of such
security of (A) a dividend or distribution on such security payable in shares of
such security or securities convertible into such shares, or (B) any
subdivision, combination or reclassification of such security, and prior to the
expiration of 30 Trading Days after but not including the ex-dividend date for
such dividend or distribution, or the Record Date for such subdivision,
combination or reclassification, then, and in each such case, the Current Per
Share Market Price shall be appropriately adjusted to reflect the current market
price per share equivalent of such security. The closing price for any day shall
be (X) the last sale price, regular way, or, in case no such sale takes place on
such day, the average of the closing bid and asked prices, regular way, in
either case as reported by (1) the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange, or (2) if the security is not listed or admitted to trading on
the New York Stock Exchange, the principal consolidated transaction reporting
system with respect to securities listed on the principal national securities
exchange on which the security is listed or admitted to trading, or (Y) if the
security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices, as reported by any market or quotation system operated
by Nasdaq, or (Z) if prices for the security are not reported by any such market
or quotation system, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the security and
selected by the Board of Directors.
(ii) For the purpose of any computation hereunder, if the
Preferred Stock is publicly traded, the Current Per Share Market Price of the
Preferred Stock shall be determined in accordance with the method set forth in
Section 11(d)(i) hereof. If the Preferred Stock is not publicly traded but the
Common Stock is publicly traded, the Current Per Share Market Price of the
Preferred Stock shall be conclusively deemed to be the Current Per Share Market
Price of the Common Stock as determined pursuant to Section 11(d)(i) hereof
multiplied by one hundred (appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof). If
neither the Common Stock nor the Preferred Stock is publicly traded, Current Per
Share Market Price shall mean the fair value per share as determined in good
faith by the Board of Directors, whose determination shall be described in a
statement filed with the Rights Agent.
(e) No adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least 1% in the Purchase
Price; provided, however, that any adjustments which by reason of this Section
11(e) are not required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under this Section 11
shall be made to the nearest cent or to the nearest one ten-thousandth of a
share of Preferred Stock or share of
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Stockholder Rights Agreement Page 16
Common Stock or other share or security as the case may be. Notwithstanding the
first sentence of this Section 11(e), any adjustment required by this Section 11
shall be made no later than the earlier of (i) three years from the date of the
transaction which requires such adjustment or (ii) the date of the expiration of
the right to exercise any Rights.
(f) If as a result of an adjustment made pursuant to Section 11(a)
hereof, the holder of any Right thereafter exercised shall become entitled to
receive any shares of capital stock of the Company other than the Preferred
Stock, thereafter the Purchase Price and the number of such other shares so
receivable upon exercise of a Right shall be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the Preferred Stock contained in Sections 11(a),
11(b), 11(c), 11(e), 11(h), 11(i) and 11(m) hereof and the provisions of
Sections 7, 9, 10, 13 and 14 hereof with respect to the Preferred Stock shall
apply on like terms to any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
share of Preferred Stock purchasable from time to time hereunder upon exercise
of the Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its election as provided in
Section 11(i) hereof, upon each adjustment of the Purchase Price as a result of
the calculations made in Sections 11(b) and (c) hereof, each Right outstanding
immediately prior to the making of such adjustment shall thereafter evidence the
right to purchase, at the adjusted Purchase Price, that number of one
one-hundredths of a share of Preferred Stock (calculated to the nearest one ten-
thousandth of a share of Preferred Stock) obtained by (i) multiplying (x) the
number of one one-hundredths of a share covered by a Right immediately prior to
such adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment of the
Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a share of Preferred Stock
purchasable upon the exercise of a Right. Each of the Rights outstanding after
such adjustment of the number of Rights shall be exercisable for the number of
one one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to such adjustment. Each Right held of record
prior to such adjustment of the number of Rights shall become that number of
Rights (calculated to the nearest one ten-thousandth) obtained by dividing the
Purchase Price in effect immediately prior to adjustment of the Purchase Price
by the Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement (with prompt written notice
thereof to the Rights Agent) of its election to adjust the number of Rights,
indicating the Record Date for the adjustment, and, if known at the time, the
amount of the adjustment to be made. This Record Date may be the date on which
the Purchase Price is adjusted or any day thereafter, but, if the Right
Certificates have been issued, shall be at least 10 days later than the date of
the public announcement. If Right Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the Company
may, as
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Stockholder Rights Agreement Page 17
promptly as practicable, cause to be distributed to holders of record of Right
Certificates on such Record Date Right Certificates evidencing, subject to
Section 14 hereof, the additional Rights to which such holders shall be entitled
as a result of such adjustment, or, at the option of the Company, shall cause to
be distributed to such holders of record in substitution and replacement for the
Right Certificates held by such holders prior to the date of adjustment, and
upon surrender thereof, if required by the Company, new Right Certificates
evidencing all the Rights to which such holders shall be entitled after such
adjustment. Right Certificates so to be distributed shall be issued, executed
and countersigned in the manner provided for herein and shall be registered in
the names of the holders of record of Right Certificates on the Record Date
specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price or
the number of one one-hundredths of a share of Preferred Stock issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price and the number of one one-hundredths
of a share of Preferred Stock which were expressed in the initial Right
Certificates issued hereunder.
(k) The Company may take any corporate action which may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable shares of Preferred Stock or other such
shares at the Purchase Price (including as adjusted from time to time in
accordance with the terms of this Agreement).
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a Record Date for a
specified event, the Company may elect to defer until the occurrence of such
event the issuing to the holder of any Right exercised after such Record Date of
the Preferred Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Stock and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments expressly required by this Section 11, as and to
the extent that it in its sole discretion shall determine to be advisable in
order that any consolidation or subdivision of the Preferred Stock, issuance
wholly for cash of any shares of Preferred Stock at less than the current market
price, issuance wholly for cash or Preferred Stock or securities which by their
terms are convertible into or exchangeable for Preferred Stock, dividends on
Preferred Stock payable in shares of Preferred Stock or issuance of rights,
options or warrants referred to in Section 11(b) hereof, hereafter made by the
Company to holders of its Preferred Stock shall not be taxable to such
stockholders.
(n) Anything in this Agreement to the contrary notwithstanding, in the
event that at any time after the date of this Agreement and prior to the
Distribution Date, the Company shall (i) declare or pay any dividend on the
Common Stock payable in Common Stock or (ii) effect a subdivision,
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Stockholder Rights Agreement Page 18
combination or consolidation of the Common Stock (by reclassification or
otherwise than by payment of a dividend payable in Common Stock) into a greater
or lesser number of Common Stock, then in any such case, the number of Rights
associated with each share of Common Stock then outstanding, or issued or
delivered thereafter, shall be proportionately adjusted so that the number of
Rights thereafter associated with each share of Common Stock following any such
event shall equal the result obtained by multiplying the number of Rights
associated with each share of Common Stock immediately prior to such event by a
fraction the numerator of which shall be the total number of shares of Common
Stock outstanding immediately prior to the occurrence of the event and the
denominator of which shall be the total number of shares of Common Stock
outstanding immediately following the occurrence of such event.
(o) The Company agrees that, after the earlier of the Distribution Date
or the Stock Acquisition Date, it will not, except as permitted by Sections 23,
24 or 27 hereof, take (or permit any Subsidiary to take) any action if at the
time such action is taken it is reasonably foreseeable that such action will
diminish substantially or eliminate the benefits intended to be afforded by the
Rights.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made as provided in Section 11 or 13 hereof,
the Company shall promptly (a) prepare a certificate setting forth such
adjustment, and a brief reasonably detailed statement of the facts and
computations accounting for such adjustment, (b) promptly file with the Rights
Agent and with each transfer agent for the Common Stock or the Preferred Stock a
copy of such certificate and (c) mail a brief summary thereof to each holder of
a Right Certificate in accordance with Section 25 hereof (if so required under
Section 25 hereof). The Rights Agent shall be fully protected in relying on any
such certificate and on any adjustment therein contained and shall have no duty
with respect to and shall not be deemed to have knowledge of any such adjustment
unless and until it shall have received such certificate.
SECTION 13. CONSOLIDATION, MERGER, SHARE EXCHANGE OR SALE OR TRANSFER OF ASSETS
OR EARNINGS POWER.
(a) In the event, directly or indirectly, at any time after any Person
has become an Acquiring Person, (i) the Company shall merge with and into any
other Person, (ii) any Person shall consolidate with the Company, or any Person
shall merge with and into the Company and the Company shall be the continuing or
surviving corporation of such merger and, in connection with such merger, all or
part of the Common Stock shall be changed into or exchanged for stock or other
securities of any other Person (or of the Company) or cash or any other
property, (iii) the Company shall effect a statutory share exchange with the
outstanding Common Stock of the Company being exchanged for stock or other
securities of any other Person, or for money or other property, or (iv) the
Company shall sell or otherwise transfer (or one or more of its Subsidiaries
shall sell or otherwise transfer), in one or more transactions, assets or
earning power aggregating 50% or more of the assets or earning power of the
Company and its Subsidiaries (taken as a whole) to any other Person (other than
the Company or one or more of its wholly-owned Subsidiaries), then upon the
first occurrence of such
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Stockholder Rights Agreement Page 19
event, proper provision shall be made so that: (A) each holder of record of a
Right (other than Rights which have become null and void pursuant to Section
11(a)(ii) hereof) shall thereafter have the right to receive, upon the exercise
thereof at a price equal to the then current Purchase Price multiplied by the
number of one one-hundredths of a share of Preferred Stock for which a Right was
exercisable (whether or not such Right was then exercisable) immediately prior
to the time that any Person first became an Acquiring Person (each as
subsequently adjusted thereafter pursuant to Sections 11(a)(i), 11(b), 11(c),
11(h), 11(i) and 11(m) hereof), in accordance with the terms of this Agreement
and in lieu of Preferred Stock, such number of validly issued, fully paid and
non-assessable and freely tradeable shares of Common Stock of the Principal
Party (as defined herein) not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of one
one-hundredths of a share of Preferred Stock for which a Right was exercisable
immediately prior to the time that any Person first became an Acquiring Person
(as subsequently adjusted thereafter pursuant to Sections 11(a)(i), 11(b),
11(c), 11(h), 11(i) and 11(m) hereof) and (2) dividing that product by 50% of
the then Current Per Share Market Price of the Common Stock of such Principal
Party (determined pursuant to Section 11(d)(i) hereof) on the date of
consummation of such consolidation, merger, sale or transfer; provided that the
Purchase Price and the number of shares of Common Stock of such Principal Party
issuable upon exercise of each Right shall be further adjusted as provided in
Section 11(f) hereof to reflect any events occurring in respect of such
Principal Party after the date of the such consolidation, merger, sale or
transfer; (B) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement; (C) the term
"Company" shall thereafter be deemed to refer to such Principal Party; and (D)
such Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its shares of Common Stock in accordance
with Section 9 hereof) in connection with such consummation of any such
transaction as may be necessary to assure that the provisions hereof shall
thereafter be applicable, as nearly as reasonably may be, in relation to the
shares of its Common Stock thereafter deliverable upon the exercise of the
Rights; provided that, upon the subsequent occurrence of any consolidation,
merger, sale or transfer of assets or other extraordinary transaction in respect
of such Principal Party, each holder of a Right shall thereupon be entitled to
receive, upon exercise of a Right and payment of the Purchase Price as provided
in this Section 13(a), such cash, shares, rights, warrants and other property
which such holder would have been entitled to receive had such holder, at the
time of such transaction, owned the Common Stock of the Principal Party
receivable upon the exercise of a Right pursuant to this Section 13(a), and such
Principal Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the subsequent
exercise of the Rights in accordance with the terms hereof for such cash,
shares, rights, warrants and other property.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in (i) or (ii) of
the first sentence of Section 13(a) hereof: (A) the Person that is the issuer of
the securities into which the shares of Common Stock are converted in such
merger or consolidation, or, if there is more than one such issuer, the issuer
the shares of Common Stock of which have the greatest aggregate market value of
shares outstanding, or (B) if no securities are so issued, (x) the Person that
is the other party to the merger, if such Person
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Stockholder Rights Agreement Page 20
survives said merger, or, if there is more than one such Person, the Person the
shares of Common Stock of which have the greatest aggregate market value of
shares outstanding or (y) if the Person that is the other party to the merger
does not survive the merger, the Person that does survive the merger (including
the Company if it survives) or (z) the Person resulting from the consolidation;
and
(ii) in the case of any transaction described in (iii) of the
first sentence in Section 13(a) hereof, the Person that is the issuer of any
securities for which shares of Common Stock of the Company are exchanged, and if
no securities are so exchanged, the Person that is the other party to such share
exchange; and
(iii) in the case of any transaction described in (iv) of the
first sentence in Section 13(a) hereof, the Person that is the party receiving
the greatest portion of the assets or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such
transaction or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion of the
assets or earning power cannot be determined, whichever of such Persons as is
the issuer of Common Stock having the greatest aggregate market value of shares
outstanding; provided, however, that in any such case described in the foregoing
clause (b)(i), (b)(ii) or b(iii), if the Common Stock of such Person is not at
such time or has not been continuously over the preceding 12-month period
registered under Section 12 of the Exchange Act, then (1) if such Person is a
direct or indirect Subsidiary of another Person the Common Stock of which is and
has been so registered, the term "Principal Party" shall refer to such other
Person, or (2) if such Person is a Subsidiary, directly or indirectly, of more
than one Person, and the Common Stocks of all of such persons have been so
registered, the term "Principal Party" shall refer to whichever of such Persons
is the issuer of Common Stock having the greatest aggregate market value of
shares outstanding, or (3) if such Person is owned, directly or indirectly, by a
joint venture formed by two or more Persons that are not owned, directly or
indirectly, by the same Person, the rules set forth in clauses (1) and (2) above
shall apply to each of the owners having an interest in the venture as if the
Person owned by the joint venture was a Subsidiary of both or all of such joint
venturers, and the Principal Party in each such case shall bear the obligations
set forth in this Section 13 in the same ratio as its interest in such Person
bears to the total of such interests.
(c) The Company shall not consummate any consolidation, merger, sale or
transfer referred to in Section 13(a) hereof unless prior thereto the Company
and the Principal Party involved therein shall have executed and delivered to
the Rights Agent an agreement confirming that the requirements of Sections 13(a)
and (b) hereof shall promptly be performed in accordance with their terms and
that such consolidation, merger, sale or transfer of assets shall not result in
a default by the Principal Party under this Agreement as the same shall have
been assumed by the Principal Party pursuant to Sections 13(a) and (b) hereof
and providing that, as soon as practicable after executing such agreement
pursuant to this Section 13, the Principal Party will:
(i) prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form, use its best
efforts to cause such registration statement to become effective as soon as
practicable after such filing and use its best efforts to cause such
registration statement to remain
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Stockholder Rights Agreement Page 21
effective (with a prospectus at all times meeting the requirements of the
Securities Act) until the Final Expiration Date, and similarly comply with
applicable state securities laws;
(ii) use its best efforts, if the Common Stock of the Principal
Party shall be listed or admitted to trading on the New York Stock Exchange or
on another national securities exchange, to list or admit to trading (or
continue the listing of) the Rights and the securities purchasable upon exercise
of the Rights on the New York Stock Exchange or such other securities exchange,
or, if the Common Stock of the Principal Party shall not be listed or admitted
to trading on the New York Stock Exchange or a national securities exchange, to
cause the Rights and the securities receivable upon exercise of the Rights to be
reported by such other system then in use;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 (or any successor form) under the
Exchange Act; and
(iv) obtain waivers of any rights of first refusal or preemptive
rights in respect of the Common Stock of the Principal Party subject to purchase
upon exercise of outstanding Rights.
(d) In case the Principal Party has provision in any of its authorized
securities or in its articles or certificate of incorporation or by-laws or
other instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue (other than to holders of
Rights pursuant to this Section 13), in connection with, or as a consequence of,
the consummation of a transaction referred to in this Section 13, shares of
Common Stock of such Principal Party at less than the then current market price
per share thereof (determined pursuant to Section 11(d) hereof) or securities
exercisable for, or convertible into, Common Stock of such Principal Party at
less than such then current market price, or (ii) providing for any special
payment, tax or similar provision in connection with the issuance of the Common
Stock of such Principal Party pursuant to the provisions of Section 13 hereof,
then, in such event, the Company hereby agrees with each holder of Rights that
it shall not consummate any such transaction unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been cancelled, waived or amended, or that the
authorized securities shall be redeemed, so that the applicable provision will
have no effect in connection with, or as a consequence of, the consummation of
the proposed transaction.
(e) The Company covenants and agrees that it shall not, at any time
after a Person first becomes an Acquiring Person enter into any transaction of
the type contemplated by (i) - (iv) of Section 13(a) hereof if (x) at the time
of or immediately after such consolidation, merger, sale, transfer or other
transaction there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights, (y)
prior to, simultaneously with or immediately after such consolidation, merger,
sale, transfer of other transaction, the stockholders of the Person who
constitutes, or would constitute, the Principal Party for purposes of Section
13(a) hereof shall have received a distribution of Rights previously owned by
such Person or any of its Affiliates or Associates or (z) the form or nature of
organization of the Principal Party would preclude or limit the exercisability
of the Rights.
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Stockholder Rights Agreement Page 22
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights (except prior
to the Distribution Date in accordance with Section 11(n) hereof). In lieu of
such fractional Rights, there shall be paid to the registered holders of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the current market
value of a whole Right. For the purposes of this Section 14(a), the current
market value of a whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such fractional Rights would
have been otherwise issuable. The closing price for any day shall be (W) the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported by (1) the principal consolidated transaction reporting system with
respect to securities listed or admitted to trading on the New York Stock
Exchange, or (2) if the Rights are not listed or admitted to trading on the New
York Stock Exchange, 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 (X) 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, as reported by any market or quotation system operated by Nasdaq, or (Y)
if prices for the Rights are not reported by any such market or quotation
system, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights and selected by the
Board of Directors, or (Z) if no such market maker is making a market in the
Rights, the fair value of the Rights on such date as deter mined in good faith
by the Board of Directors.
(b) The Company shall not be required to issue fractions of Preferred
Stock (other than fractions which are integral multiples of one one-hundredth of
a share of Preferred Stock) upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-hundredth of a share of
Preferred Stock). Interests in fractions of Preferred Stock in integral
multiples of one one-hundredth of a share of Preferred Stock may, at the
election of the Company, be evidenced by depositary receipts, pursuant to an
appropriate agreement between the Company and a depositary selected by it;
provided, that such agreement shall provide that the holders of such depositary
receipts shall have all the rights, privileges and preferences to which they are
entitled as beneficial owners of the Preferred Stock represented by such
depositary receipts. In lieu of fractional shares of Preferred Stock that are
not integral multiples of one one-hundredth of a share of Preferred Stock, the
Company shall pay to the registered holders of Right Certificates at the time
such Rights are exercised as herein provided an amount in cash equal to the same
fraction of the current market value of one share of Preferred Stock. For the
purposes of this Section 14(b), the current market value of a share of Preferred
Stock shall be the closing price of a share of Preferred Stock (as determined
pursuant to Section 11(d) hereof) for the Trading Day immediately prior to the
date of such exercise.
(c) The Company shall not be required to issue fractions of shares of
Common Stock or to distribute certificates which evidence fractional shares of
Common Stock upon the exercise or exchange of Rights. In lieu of such fractional
shares of Common Stock, the Company shall pay to
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Stockholder Rights Agreement Page 23
the registered holders of the Right Certificates with regard to which such
fractional shares of Common Stock would otherwise be issuable an amount in cash
equal to the same fraction of the current market value of a whole share of
Common Stock (as determined in accordance with Section 14(a) hereof) for the
Trading Day immediately prior to the date of such exercise or exchange.
(d) The holder of a Right by the acceptance of the Right expressly
waives his right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
SECTION 15. RIGHTS OF ACTION.
All rights of action in respect of this Agreement, excepting the rights
of action given to the Rights Agent under Section 18 hereof, are vested in the
respective registered holders of the Right Certificates (and, prior to the
Distribution Date, the registered holders of the Common Stock); and any
registered holder of any Right Certificate (or, prior to the Distribution Date,
of the Common Stock), without the consent of the Rights Agent or of the holder
of any other Right Certificate (or, prior to the Distribution Date, of the
Common Stock), on his own behalf and for his own benefit, may enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such Right Certificate (or, prior to the Distribution Date, such
Common Stock) in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and
will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of, the obligations of
any Person subject to this Agreement.
SECTION 16. AGREEMENT OF RIGHT HOLDERS.
Every holder of a Right, by accepting the same, consents and agrees
with the Company and the Rights Agent and with every other holder of a Right
that:
(a) prior to the Distribution Date, the Rights will be transferable
only in connection with the transfer of the Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the office or agency of the Rights Agent designated for such purpose, duly
endorsed or accompanied by a proper instrument of transfer; and
(c) the Company and the Rights Agent may deem and treat the Person in
whose name the Right Certificate (or, prior to the Distribution Date, the Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the Common Stock certificate made by anyone other than the
Company or the Rights Agent) for all purposes whatsoever, and neither the
Company nor the Rights Agent shall be affected by any notice to the contrary.
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Stockholder Rights Agreement Page 24
SECTION 17. RIGHT CERTIFICATE HOLDER NOT DEEMED A STOCKHOLDER.
No holder, as such, of any Right Certificate shall be entitled to vote,
receive dividends or be deemed for any purpose the holder of the Preferred Stock
or any other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any 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 this Agreement), or to receive dividends or
subscription rights, or otherwise, until the Rights evidenced by such Right
Certificate shall have been exercised in accordance with the provisions hereof.
SECTION 18. CONCERNING THE RIGHTS AGENT.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the preparation, execution, delivery, amendment
and administration of this Agreement and the exercise and performance of its
duties hereunder. The Company also agrees to indemnify the Rights Agent for, and
to hold it harmless against, any loss, liability damage, judgment, fine,
penalty, claim, demand, settlement, cost or expense, incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent, for
any action taken, suffered or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability arising therefrom, directly
or indirectly. The indemnity provided for herein shall survive the expiration of
the Rights and the termination of this Agreement.
(b) The Rights Agent shall be authorized and protected and shall incur
no liability for, or in respect of any action taken, suffered or omitted by it
in connection with, its acceptance and administration of this Agreement in
reliance upon any Right Certificate or certificate for the Preferred Stock or
Common Stock or for other securities of the Company, instrument of assignment or
transfer, power of attorney, endorsement, affidavit, letter, notice, direction,
consent, certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.
(c) Anything to the contrary notwithstanding, in no event shall the
Rights Agent be liable for special, indirect, consequential or incidental loss
or damage of any kind whatsoever (including but not limited to lost profits),
even if the Rights Agent has been advised of the likelihood of such loss or
damage.
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Stockholder Rights Agreement Page 25
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
shareholder services of the Rights Agent or any successor Rights Agent, shall be
the successor to the Rights Agent under this Agreement without the execution or
filing of any paper or any further act on the part of any of the parties hereto;
provided, that such Person would be eligible for appointment as a successor
Rights Agent under the provisions of Section 21 hereof. In case at the time such
successor Rights Agent shall succeed to the agency created by this Agreement,
any of the Right Certificates shall have been countersigned but not delivered,
any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and in case at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may countersign such Right
Certificates either in the name of the predecessor Rights Agent or in the name
of the successor Rights Agent; and in all such cases such Right Certificates
shall have the full force provided in the Right Certificates and in this
Agreement.
(b) In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
SECTION 20. DUTIES OF RIGHTS AGENT.
The Rights Agent undertakes only the duties and obligations expressly
imposed by this Agreement (and no implied duties or obligations) upon the
following terms and conditions, by all of which the Company and the holders of
Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be legal
counsel for the Company), and the advice or opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent and the
Rights Agent shall incur no liability for or in respect of, any action taken,
suffered or omitted by it in good faith and in accordance with such advice or
opinion.
(b) Whenever in the performance of its duties under this Agreement the
Rights Agent shall deem it necessary or desirable that any fact or matter 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 of
Directors, the President, any Vice President, the Treasurer, the Controller or
the Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization and protection to the
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Stockholder Rights Agreement Page 26
Rights Agent and the Rights Agent shall incur no liability in respect of any
action taken, suffered or omitted in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the Company and any
other Person only for its own gross negligence, bad faith or wilful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the
statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof) or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not have any liability for or be under any
responsibility in respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Right Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the
Company of any covenant or condition contained in this Agreement or in any Right
Certificate; nor shall it be responsible for any change in the exercisability of
the Rights (including the Rights becoming null and void pursuant to Section
11(a)(ii) hereof) or any adjustment in the terms of the Rights (including the
manner, method or amount thereof) provided for in Sections 3, 11, 13, 23 and 24
hereof, or the ascertaining of the existence of facts that would require any
such change or adjustment (except with respect to the exercise of Rights
evidenced by Right Certificates after receipt of a certificate furnished
pursuant to Section 12 hereof, describing such change or adjustment); nor shall
it by any act hereunder be deemed to make any representation or warranty as to
the authorization or reservation of any shares of Preferred Stock or other
securities to be issued pursuant to this Agreement or any Right Certificate or
as to whether any shares of Preferred Stock or other securities will, when
issued, be validly authorized and issued, fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from any
person reasonably believed by the Rights Agent to be one of the Chairman of the
Board of Directors, the President, the Chief Financial Officer or the Secretary
of the Company, and to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any action taken,
suffered or omitted by it in good faith in accordance with instructions of any
such officer or for any delay in acting while waiting for those instructions.
Any application by the Rights Agent for written instructions from the Company
may, at the option of the Rights Agent, set forth in writing any action proposed
to be taken, suffered or omitted by the Rights Agent under this Agreement and
the date on and/or after which such action shall be taken or suffered or such
omission shall be effective. The Rights Agent shall not be liable or responsible
for any action taken or suffered by, or omission of, the Rights Agent in
accordance with a proposal included in any such application on or after the date
specified in such application (which
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Stockholder Rights Agreement Page 27
date shall not be less than five Business Days after the date any officer of the
Company actually receives such application, unless any such officer shall have
consented in writing to an earlier date) unless, prior to taking any such action
(or the effective date in the case of an omission), the Rights Agent shall have
received written instructions in response to such application specifying the
action to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, affiliate, director, officer
or employee of the Rights Agent may buy, sell or deal in any of the Rights or
other securities of the Company or become pecuniarily interested in any
transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
Rights Agent under this Agreement. Nothing herein shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other Person
or legal entity.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company or any other Person resulting from any
such act, default, neglect or misconduct, absent gross negligence, bad faith or
willful misconduct in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not reasonably
assured to it.
(k) If, with respect to any Rights Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has not been completed to certify the holder is not an
Acquiring Person (or an Affiliate or Associate thereof), the Rights Agent shall
not take any further action with respect to such requested exercise or transfer
without first consulting with the Company.
SECTION 21. CHANGE OF RIGHTS AGENT.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon 30 days' notice in writing
mailed to the Company and to each transfer agent of the Common Stock or
Preferred Stock by registered or certified mail, and, following the Distribution
Date, to the holders of the Right Certificates by first-class mail. The Company
may remove the Rights Agent or any successor Rights Agent upon 30 days' notice
in writing, mailed to the Rights Agent or successor Rights Agent, as the case
may be, and to each transfer agent of the Common Stock or Preferred Stock by
registered or certified mail, and, following the Distribution Date, to the
holders of the Right Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of 30 days after giving notice of such removal
or after it has been notified in writing of such resignation or
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Stockholder Rights Agreement Page 28
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be a Person organized and doing business under the laws of
the United States or any State thereof, which is 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 shall be vested with the
same powers, rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the predecessor Rights
Agent shall deliver and transfer to the successor Rights Agent any property at
the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Stock or
Preferred Stock, and, following the Distribution Date, mail a notice thereof in
writing to the registered holders of the Right Certificates. Failure to give any
notice provided for in this Section 21, however, or any defect therein, shall
not affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
SECTION 22. ISSUANCE OF NEW RIGHT CERTIFICATES.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Company may, at its option, issue new Right
Certificates evidencing Rights in such forms as may be approved by its Board of
Directors to reflect any adjustment or change in the Purchase Price and the
number or kind or class of shares or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Agreement. In addition, in connection with the issuance or sale of Common Stock
following the Distribution Date and prior to the earlier of the Redemption Date
and the Final Expiration Date, the Company may with respect to shares of Common
Stock so issued or sold pursuant to (i) the exercise of stock options, (ii)
under any employee plan or arrangement, (iii) upon the exercise, conversion or
exchange of securities, notes or debentures issued by the Company or (iv) a
contractual obligation of the Company in each case existing prior to the
Distribution Date, issue Rights Certificates representing the appropriate number
of Rights in connection with such issuance or sale.
SECTION 23. REDEMPTION.
(a) The Board of Directors may, at any time prior to such time as any
Person first becomes an Acquiring Person, redeem all but not less than all the
then outstanding Rights at a redemption price of $.01 per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (the redemption price being hereinafter referred
to as the "Redemption Price"). The redemption of the Rights may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish. The Company may, at its option,
pay the Redemption Price in cash, shares of Common Stock (based on
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the current market price of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by the Board of Directors.
(b) Immediately upon the action of the Board of Directors ordering the
redemption of the Rights pursuant to Section 23(a) hereof (or at such later time
as the Board of Directors may establish for the effectiveness of such
redemption), and without any further action and without any notice (with prompt
written notice thereof to the Rights Agent), the right to exercise the Rights
will terminate and the only right thereafter of the holders of Rights shall be
to receive the Redemption Price. The Company shall promptly give public notice
of any such redemption; provided, however, that the failure to give, or any
defect in, any such notice shall not affect the validity of such redemption.
Within 10 days after such action of the Board of Directors ordering the
redemption of the Rights (or such later time as the Board of Directors may
establish for the effectiveness of such redemption), the Company shall mail a
notice of redemption to all the holders of the then outstanding Rights at their
last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for
the Common Stock. Any notice which is mailed in the manner herein provided shall
be deemed given, whether or not the holder receives the notice. Each such notice
of redemption shall state the method by which the payment of the Redemption
Price will be made.
SECTION 24. EXCHANGE.
(a) The Board of Directors may, at its option, at any time after any
Person first becomes an Acquiring Person, exchange all or part of the then
outstanding and exercisable Rights (which shall not include Rights that have not
become effective or that have become null and void pursuant to the provisions of
Section 11(a)(ii) hereof) for shares of Common Stock at an exchange ratio of one
share of Common Stock per Right, appropriately adjusted to reflect any stock
split, stock dividend or similar transaction occurring after the date hereof
(such amount per Right being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than an Exempt Person),
together with all Affiliates and Associates of such Person, becomes the
Beneficial Owner of shares of Common Stock aggregating 50% or more of the shares
of Common Stock then outstanding. From and after the occurrence of an event
specified in Section 13(a) hereof, any Rights that theretofore have not been
exchanged pursuant to this Section 24(a) shall thereafter be exercisable only in
accordance with Section 13 hereof and may not be exchanged pursuant to this
Section 24(a). The exchange of the Rights by the Board of Directors may be made
effective at such time, on such basis and with such conditions as the Board of
Directors in its sole discretion may establish.
(b) Immediately upon the effectiveness of the action of the Board of
Directors ordering the exchange of any Rights pursuant to Section 24(a) hereof
and without any further action and without any notice, the right to exercise
such Rights shall terminate and the only right thereafter of a holder of such
Rights shall be to receive that number of shares of Common Stock equal to the
number of such Rights held by such holder multiplied by the Exchange Ratio. The
Company shall promptly give public notice (with prompt written notice thereof to
the Rights Agent) of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity
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Stockholder Rights Agreement Page 30
of such exchange. The Company shall promptly mail a notice of any such exchange
to all of the holders of the Rights so exchanged at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is mailed
in the manner herein provided shall be deemed given, whether or not the holder
receives the notice. Each such notice of exchange will state the method by which
the exchange of the shares of Common Stock for Rights will be effected and, in
the event of any partial exchange, the number of Rights which will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights
(other than Rights which have become null and void pursuant to the provisions of
Section 11(a)(ii) hereof) held by each holder of Rights.
(c) The Company may at its option and, in the event that there shall
not be sufficient shares of Common Stock issued but not outstanding or
authorized but unissued to permit an exchange of Rights as contemplated in
accordance with this Section 24, the Company shall substitute to the extent of
such insufficiency, for each share of Common Stock that would otherwise be
issuable upon exchange of a Right, a number of shares of Preferred Stock or
fraction thereof (or Equivalent Preferred Shares as such term is defined in
Section 11(b) hereof) such that the Current Per Share Market Price (determined
pursuant to Section 11(d) hereof) of one share of Preferred Stock (or Equivalent
Preferred Share) multiplied by such number or fraction is equal to the Current
Per Share Market Price of one share of Common Stock (determined pursuant to
Section 11(d) hereof) as of the date of such exchange).
SECTION 25. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall at any time after the earlier of the
Distribution Date or the Stock Acquisition Date propose (i) to pay any dividend
payable in stock of any class to the holders of its Preferred Stock or to make
any other distribution to the holders of its Preferred Stock (other than a
regular quarterly cash dividend), (ii) to offer to the holders of its Preferred
Stock rights or warrants to subscribe for or to purchase any additional shares
of Preferred Stock or shares of stock of any class or any other securities,
rights or options, (iii) to effect any reclassification of its Preferred Stock
(other than a reclassification involving only the subdivision or combination of
outstanding Preferred Stock), (iv) to effect the liquidation, dissolution or
winding up of the Company, or (v) to declare or pay any dividend on the Common
Stock payable in Common Stock or to effect a subdivision, combination or
consolidation of the Common Stock (by reclassification or otherwise than by
payment of dividends in Common Stock), then, in each such case, the Company
shall give to each holder of a Right Certificate and to the Rights Agent, in
accordance with Section 26 hereof, a notice of such proposed action, which shall
specify the Record Date for the purposes of such stock dividend, or distribution
of rights or warrants, or the date on which such liquidation, dissolution or
winding up is to take place and the date of participation therein by the holders
of the Common Stock and/or Preferred Stock, if any such date is to be fixed, and
such notice shall be so given in the case of any action covered by clause (i) or
(ii) above at least 10 days prior to the Record Date for determining holders of
the Preferred Stock for purposes of such action, and in the case of any such
other action, at least 10 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the Common Stock
and/or Preferred Stock, whichever shall be the earlier.
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Stockholder Rights Agreement Page 31
(b) In case any event described in Section 11(a)(ii) or Section 13
hereof shall occur then the Company shall as soon as practicable thereafter give
to each holder of a Right Certificate (or if occurring prior to the Distribution
Date, the holders of the Common Stock) in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such event
and the consequences of such event to holders of Rights under Section 11(a)(ii)
and Section 13 hereof.
SECTION 26. NOTICES.
Any notice, request, demand or other communication which is required or
may be given under this Agreement by the Rights Agent or by the holder of any
Right Certificate to or on the Company shall be in writing and shall be deemed
to have been duly given (1) if transmitted by telecopy, electronic telephone
line facsimile transmission or other similar electronic or digital transmission
method, when transmitted; (2) if sent by a nationally recognized next day
delivery service that obtains a receipt on delivery, the day after it is sent;
(3) if mailed, first class registered or certified United States mail, postage
prepaid, five days after it is sent; and (4) in any other case, when actually
received. In each case, such notice, request, demand or other communication
shall be sent to:
LAI Worldwide, Inc.
0000 Xxxxxxxxx Xxxx.
Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
or to such other address as the Company may have specified in writing to the
Rights Agent using the procedures specified above in this Section.
Subject to the provisions of Section 21 hereof, any notice, request,
demand or other communication which is required or may be given under this
Agreement by the Company or by the holder of any Right Certificate to or on the
Rights Agent shall be in writing and shall be deemed to have been duly given (1)
if transmitted by telecopy, electronic telephone line facsimile transmission or
other similar electronic or digital transmission method, when transmitted; (2)
if sent by a nationally recognized next day delivery service that obtains a
receipt on delivery, the day after it is sent; (3) if mailed, first class
registered or certified United States mail, postage prepaid, five days after it
is sent; and (4) in any other case, when actually received. In each case, such
notice, request, demand or other communication shall be sent to:
ChaseMellon Shareholder Services, L.L.C.
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Attention: General Counsel
or to such other address as the Rights Agent may have specified in writing to
the Company using the procedures specified above in this Section.
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Stockholder Rights Agreement Page 32
Any notice, request, demand or other communication which is required or
may be given under this Agreement by the Company or the Rights Agent to or on
the holder of any Right Certificate shall be in writing and shall be deemed to
have been duly given (1) if transmitted by telecopy, electronic telephone line
facsimile transmission or other similar electronic or digital transmission
method, when transmitted; (2) if sent by a nationally recognized next day
delivery service that obtains a receipt on delivery, the day after it is sent;
(3) if mailed, first class registered or certified United States mail, postage
prepaid, five days after it is sent; and (4) in any other case, when actually
received. In each case, such notice, request, demand or other communication
shall be sent to such holder at the address of such holder as shown on the
registry books of the Company.
SECTION 27. SUPPLEMENTS AND AMENDMENTS; CERTAIN BOARD ACTIONS.
(a) Except as otherwise provided in this Section 27, for so long as the
Rights are then redeemable, the Company may in its sole and absolute discretion,
and the Rights Agent shall if the Company so directs, supplement or amend any
provision of this Agreement in any respect without the approval of any holders
of the Rights. At any time when the Rights are no longer redeemable, except as
otherwise provided in this Section 27, the Company may, and the Rights Agent
shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights Certificates in order to (i) cure any
ambiguity, (ii) correct or supplement any provision contained herein which may
be defective or inconsistent with any other provisions herein, (iii) shorten or
lengthen any time period hereunder, or (iv) change or supplement the provisions
hereunder in any manner which the Company may deem necessary or desirable;
provided that no such supplement or amendment shall adversely affect the
interests of the holders of Rights as such (other than an Acquiring Person or an
Affiliate or Associate of an Acquiring Person), and no such amendment may cause
the rights again to become redeemable or cause the Agreement again to become
amendable other than in accordance with this sentence. Notwithstanding anything
contained in this Agreement to the contrary, no supplement or amendment shall be
made which decreases the Redemption Price. Upon the delivery of a certificate
from an appropriate officer of the Company which states that the proposed
supplement or amendment is in compliance with the terms of this Section 27 and,
if requested by the Rights Agent, an opinion of counsel, the Rights Agent shall
execute such supplement or amendment; provided, however, that, anything to the
contrary notwithstanding, the Rights Agent shall not be obligated to enter into
any amendment or supplement that change or increases the Rights Agent's duties,
liabilities or obligations.
(b) Notwithstanding anything to the contrary, no action by the Board of
Directors consenting to, approving, authorizing or directing any (1) supplement,
amendment or change to this Agreement, (2) redemption, cancellation, purchase or
acquisition of, or payment, exchange, grant, issuance or delivery of any
consideration for, any Rights, (3) suspension, cancellation, termination,
rescission, revocation or waiver of this Agreement or any provision of this
Agreement or (4) any similar action shall be effective unless (a) there are
"Disinterested Directors" (as that term is defined below) then in office and (b)
such action receives the approval by affirmative vote of a majority of such
Disinterested Directors. For the purposes of this paragraph, "Disinterested
Director" shall mean a member of the Board of Directors of the Company who is
not an Acquiring Person or Section
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Stockholder Rights Agreement Page 33
"3(a)(ii) Person" (as that term is defined below), not an Affiliate or Associate
of an Acquiring Person or Section 3(a)(ii) Person, and not a representative of
an Acquiring Person, of a Section 3(a)(ii) Person or of any such Affiliate or
Associate. For the purposes of this paragraph, "Section 3(a)(ii) Person" shall
mean a Person who has commenced or participated in the commencement of, or with
respect to whom there has been a public announcement of an intention to
commence, a tender or exchange offer the consummation of which would result in
any Person becoming an Acquiring Person.
SECTION 28. SUCCESSORS.
All the covenants and provisions of this Agreement by or for the
benefit of the Company or the Rights Agent shall bind and inure to the benefit
of their respective successors and assigns hereunder.
SECTION 29. BENEFITS OF THIS AGREEMENT.
Nothing in this Agreement shall be construed to give to any Person
other than the Company, the Rights Agent and the registered holders of the Right
Certificates (and, prior to the Distribution Date, the Common Stock) any legal
or equitable right, remedy or claim under this Agreement; but this Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent and
the registered holders of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
SECTION 30. DETERMINATIONS AND ACTIONS BY THE BOARD OF DIRECTORS.
The Board of Directors shall have the exclusive power and authority to
administer this Agreement and to exercise the rights and powers specifically
granted to the Board of Directors or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including, without limitation, a determination
to redeem or not redeem the Rights or to amend this Agreement). All such
actions, calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the foregoing) that
are done or made by the Board of Directors in good faith, shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights, as such, and all other parties, and (y) not subject the Board of
Directors to any liability to the holders of the Rights. The Rights Agent is
entitled to always assume that the Company's Board of Directors acted in good
faith and in compliance with applicable law, the Company's Articles of
Incorporation and Bylaws as then in effect and this Agreement, and shall be
fully protected and incur no liability in reliance thereon.
SECTION 31. SEVERABILITY.
If any term, provision, covenant or restriction of this Agreement or
applicable to this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated.
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Stockholder Rights Agreement Page 34
SECTION 32. GOVERNING LAW.
This Agreement and each Right Certificate issued hereunder shall be
deemed to be a contract made under the laws of the State of Florida and for all
purposes shall be governed by and construed in accordance with the laws of such
State applicable to contracts to be made and performed entirely within such
State; 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
preformed entirely within such state.
SECTION 33. COUNTERPARTS.
This Agreement may be executed in any number of counterparts and each
of such counterparts shall for all purposes be deemed to be an original, and all
such counterparts shall together constitute but one and the same instrument.
SECTION 34. DESCRIPTIVE HEADINGS.
Descriptive headings of the several Sections of this Agreement are
inserted for convenience only and shall not control or affect the meaning or
construction of any of the provisions hereof.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and attested, all as of the day and year first above written.
LAI WORLDWIDE, INC.
By: /s/: Xxxxxx X. Xxxxxxxx
-------------------------------------------
Xxxxxx X. Xxxxxxxx, Chief Financial Officer
CHASEMELLON SHAREHOLDER
SERVICES, L.L.C.
By: /s/: Xxxxx Xxxxxxxxx
-------------------------------------------
Authorized Officer
