Arkona, Inc. and Atlas Stock Transfer Corporation Amended and Restated Rights Agreement Dated as of April 26, 2007
Arkona, Inc.
and
Atlas Stock Transfer Corporation
Amended and Restated Rights Agreement
Dated as of April 26, 2007
TABLE OF CONTENTS
| Page | ||||||
1.
|
Certain Definitions | 1 | ||||
2.
|
Appointment of Rights Agent | 6 | ||||
3.
|
Issue of Rights Certificates | 6 | ||||
4.
|
Form of Rights Certificates | 7 | ||||
5.
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Countersignature and Registration | 8 | ||||
6.
|
Transfer, Split-Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen Certificates | 9 | ||||
7.
|
Exercise of Rights; Purchase Price; Expiration Date of Rights | 10 | ||||
8.
|
Cancellation and Destruction of Rights Certificates | 11 | ||||
9.
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Reservation and Availability of Capital Stock | 11 | ||||
10.
|
Preferred Stock Record Date | 13 | ||||
11.
|
Adjustment of Purchase Price, Number of Shares or Number of Rights | 13 | ||||
12.
|
Certificate of Adjusted Purchase Price or Number of Shares | 20 | ||||
13.
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Consolidation, Merger or Sale or Transfer of Assets or Earning Power | 21 | ||||
14.
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Fractional Rights and Fractional Shares. | 23 | ||||
15.
|
Rights of Action | 24 | ||||
16.
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Agreement of Rights Holders | 25 | ||||
17.
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Rights Certificate Holder Not Deemed a Xxxxxxxxxxx | 00 | ||||
00.
|
Concerning the Rights Agent | 26 | ||||
19.
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Merger or Consolidation or Change of Name of Rights Agent | 26 | ||||
20.
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Duties of Rights Agent | 27 | ||||
21.
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Change of Rights Agent | 29 | ||||
22.
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Issuance of New Rights Certificates | 29 | ||||
23.
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Redemption and Waiver | 30 | ||||
i
| Page | ||||||
24.
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Exchange | 31 | ||||
25.
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Notices | 32 | ||||
26.
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Supplements and Amendments | 32 | ||||
27.
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Successors | 33 | ||||
28.
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Benefits of this Agreement | 33 | ||||
29.
|
Severability | 33 | ||||
30.
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Determinations and Actions by the Board of Directors, Etc | 33 | ||||
31.
|
Governing Law | 34 | ||||
32.
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Counterparts | 34 | ||||
33.
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Descriptive Headings | 34 | ||||
34.
|
Termination. | 34 | ||||
ii
This AMENDED AND RESTATED RIGHTS AGREEMENT, dated as of April 26, 2007 (the “Agreement”),
amends and restates that certain Rights Agreement (the “Previous Agreement”) dated December 22,
2000 between Arkona, Inc., a Delaware corporation, then known as Sundog Technologies, Inc. (the
“Company”), and Atlas Stock Transfer Corporation (the “Rights Agent”).
WHEREAS, (i) Section 26 of the Previous Agreement provides that, prior to the Distribution
Date (as defined below), the Company and the Rights Agent shall, if so directed by the Company,
supplement or amend any provision of the Previous Agreement without the approval of any holders of
the Rights; (ii) pursuant to Section 26 of the Previous Agreement, an appropriate officer of the
Company has delivered a certificate to the Rights Agent stating that the proposed amendments to the
Previous Agreement set forth in this Agreement are in compliance with Section 26 of the Previous
Agreement; and (iii) pursuant to the terms of the Previous Agreement and in accordance with
Section 26 thereof, the Company has directed that the Rights Agreement should be amended as set
forth in this Agreement.
(a) “Acquiring Person” shall mean (i) any Person (as such term is hereinafter defined) who or
which, together with all Affiliates and Associates (as such terms are hereinafter, defined) of such
Person, shall become the Beneficial Owner (as such term is hereinafter defined) of 15% or more of
the shares of Common Stock then outstanding or (ii) any Person who is an Adverse Person (as such
term is hereinafter defined); provided,
however, that an Acquiring Person shall not include the Company, any Subsidiary (as
such term is hereinafter defined) of the Company or any employee benefit plan of the Company or of
any Subsidiary of the Company or any entity holding shares of Common Stock for or pursuant to the
terms of any such plan. Notwithstanding the foregoing, no Person shall be deemed to be an
“Acquiring Person” (i) as the result of an acquisition of Common Stock by the Company which, by
reducing the number of shares outstanding, increases the proportionate number of shares
Beneficially Owned by such Person to 15% or more of the Common Stock of the Company then
outstanding; provided, however, that if a Person shall become the Beneficial Owner
of 15% or more of the Common Stock then outstanding by reason of share purchases by the Company and
shall, after such share purchases by the Company, become the Beneficial Owner of any additional
shares of Common Stock, then such Person shall be deemed to be an “Acquiring Person,” (ii) if the
Board determines in good faith that a Person who would otherwise be an “Acquiring Person,” as
defined pursuant to the foregoing provisions of this paragraph (a), has become such inadvertently,
and such Person divests as promptly as practicable a sufficient number of shares of Common Stock so
that such Person would no longer be an “Acquiring Person,” as defined pursuant to the foregoing
provisions of this paragraph (a), (iii) if the transaction in which a Person, together with all
Affiliates and associates of such Person, would become the Beneficial Owner of 15% or more of the
shares of Common Stock then outstanding involves the purchase of Common Stock or Preferred Stock
(or securities convertible into or exercisable for Common Stock of Preferred Stock) directly from
the Company and the Board of Directors expressly determines, in the resolution approving such
transaction, that such Person shall not become an “Acquiring Person” as a result of the shares of
Common Stock or Preferred Stock (or securities convertible into or exercisable for Common Stock of
Preferred Stock) acquired in such transaction, provided, however, if, after said
transaction, said Person, together with all Affiliates or Associates of said Person, shall acquire
additional shares of Preferred Stock or Common Stock (other than pursuant to rights or securities
acquired in such transaction) that cause such Person, together with the Affiliates and Associates
of such Person, to become the beneficial owners of 15% or more of the shares of Common Stock then
outstanding, then such Person shall be deemed to be an “Acquiring Person”; (iv) if such Person or
its Affiliates acquires securities of the Company in an Approved Transaction; or (v) if the Board
determines in good faith that a Person shall not be deemed an Acquiring Person.
(b) “Act” shall mean the Securities Act of 1933, as amended.
(c) “Adverse Person” shall mean any Person declared to be an Adverse Person by the Board upon
a determination that such Person, alone or together with its Affiliates and Associates, has, at any
time after the date of this Agreement, become the Beneficial Owner of an amount of Common Stock
which the Board of Directors determines to be substantial (which amount shall be more than 10% of
the shares of Common Stock then outstanding) and a determination by at least a majority of the
Board of Directors who are not officers of the Company, after reasonable inquiry and investigation,
including consultation with such persons as such directors shall deem appropriate, that (1) such
beneficial ownership by such Person is intended to cause the Company to repurchase the Common Stock
beneficially owned by such Person or to cause pressure on the Company to take action or enter into
a transaction or series of transactions intended to provide such Person with short-term financial
gain under circumstances where the Board of Directors determines that the best long-term
interests of the Company and its shareholders would not be served by taking such action or entering
into such transactions at that time, or (2) such beneficial ownership is causing or reasonably
likely to cause a material adverse impact (including, but not limited to, impairment of
relationships with customers or impairment of the Company’s ability to maintain its competitive
position) on the business or prospects of the
Company. An Adverse Person shall not include any
Person acquiring securities of the Company in an Approved Transaction.
(d) “Affiliate” and “Associate” shall have the respective meanings ascribed to such terms in
Rule 12b-2 of the General Rules and Regulations under the Exchange Act (as such term is hereinafter
defined), as in effect on the date of this Agreement.
(e) “Agreement” shall mean this Rights Agreement.
(f) “Approved Transaction” shall mean any transaction, or series of transactions of any kind
(including without limitation, any stock sale, merger or tender or exchange offer or any
combination of the foregoing), pursuant to which a Person or its Affiliates may otherwise become an
Acquiring Person hereunder, and which the Board expressly determines, in the resolution approving
such transaction or transactions, that such Person shall not become an “Acquiring Person” as a
result such transaction or transactions.
(g) A Person shall be deemed the “Beneficial Owner” of and shall be deemed to beneficially own
any, securities:
(i) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the power to vote or dispose of, including pursuant to any agreement,
arrangement or understanding, whether or not in writing;
(ii) which such Person or any of such Person’s Affiliates or Associates, directly or
indirectly, has the right to acquire voting or dispositive power over (whether such right is
exercisable immediately or only after the passage of time) pursuant to any agreement,
arrangement or understanding (whether or not in writing), or upon the exercise of conversion
rights, exchange rights, rights, warrants or options, or otherwise; or
(iii) which are beneficially owned, directly or indirectly, by any other Person (or any
Affiliate or Associate thereof) with which such Person (or any of such Person’s Affiliates
or Associates) has any agreement arrangement or understanding, whether or not in writing,
for the purpose of acquiring, holding, voting or disposing of any securities of the Company;
provided, however, that nothing in this paragraph (g) shall cause a person to be
the “Beneficial Owner” of, or to “beneficially own,” (A) any securities that may be issued on the
exercise of Rights, (B) any security if the agreement, arrangement or understanding to vote such
security 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 of the Exchange Act, (C) securities tendered pursuant to a tender or exchange offer
made by or on behalf of such Person or any of such Person’s Affiliates or Associates until such
tendered securities are accepted for purchase or exchange, or (D) any securities acquired by a
Person engaged in business as an underwriter of securities through such Person’s participation in
good faith in a firm commitment underwriting until the expiration of 40 days after the date of such
acquisition. For all purposes of this Agreement, any calculation of the number of shares of Common
Stock outstanding at any particular time 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 Exchange Act.
(h) “Business Day” shall mean any day other than a Saturday, a Sunday, or a day on which
banking institutions in the State of Utah are authorized or obligated by law or executive order to
close.
(i) “Close of business” on any given date shall mean 5:00 p.m., State of Utah time, on such
date; provided, however, that if such date is not a Business Day, it shall mean
5:00 p.m., State of Utah time, on the next succeeding Business Day.
(j) “Common Stock” shall mean the Common Stock, $.001 par value, of the Company. The term
“common stock” when used with reference to any Person other than the Company shall mean the capital
stock (or equity interest) with the greatest voting power of such other Person together with all
rights and benefits (however denominated or constituted) relating to such common stock (including,
without limitation any rights or warrants to acquire additional shares of such common stock or
other securities or assets, or to participate in any trust for the benefit of holders of such
shares, or to share in the benefits of any agreements or other arrangements for the benefit of such
holders), whether or not such rights are yet exercisable, and together with any other securities
which are represented by the certificates for such common stock or are transferred in connection
with transfers of such common stock.
(k) “Common Stock Equivalents” shall have the meaning set forth in Section 11(a)(iii).
(l) “Current Per Share Market Price” shall have the meaning set forth in Section 11(d).
(m) “Current Value” shall have the meaning set forth in Section 11(a)(iii).
(n) “Distribution Date” shall have the meaning set forth in Section 3(a).
(o) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.
(p) “Final Expiration Date” shall have the meaning set forth in Section 7(a).
(q) “Person” shall mean any individual, firm, corporation, partnership or other entity and
shall include any successor (by merger or otherwise) of such entity.
(r) “Preferred Stock” means Series A Preferred Shares of the Company and, to the extent that
there is not a sufficient number of Series A Preferred Shares authorized to permit the full
exercise of the Rights, any other series of Preferred Shares of the Company designated for such
purpose containing terms substantially similar to the terms of the Series A Preferred Shares.
(s) “Preferred Stock Equivalents” shall have the meaning set forth in Section 11(b).
(t) “Principal Party” shall have the meaning set forth in Section 13(b).
(u) “Proposed Acquiror” shall mean any Person who has proposed or publicly announced an
intention to propose a transaction that, if consummated, would cause a Stock Acquisition Date
(other than a Stock Acquisition Date occurring as the result of a declaration by the Company’s
Board of Directors of the existence of an Adverse Person) or any Section 13 Event to occur.
Proposed Acquiror shall not include any Person or its Affiliates acquiring securities of the
Company pursuant to an Approved Transaction.
(v) “Purchase Price” shall mean the dollar amount payable upon exercise of one Right to
acquire the number of one one-hundredths of a share of Preferred Stock or other securities or
assets for which the Right is then exercisable and shall initially be the price set forth in
Section 7(b).
(w) “Record Date” shall have the meaning set forth in the WHEREAS clause at the beginning of
this Agreement.
(x) “Redemption Date” shall have the meaning set forth in Section 7(a).
(y) “Redemption Price” shall have the meaning set forth in Section 23(a).
(z) “Rights” shall have the meaning set forth in the WHEREAS clause at the beginning of this
Agreement.
(aa) “Rights Certificate” shall have the meaning set forth in Section 3(a).
(ab) “Section 11(i) Event” shall have the meaning set forth in Section 11(i).
(ac) “Section 13 Event” shall mean any event described in Section 13(a).
(ad) “Spread” shall have the meaning set forth in Section 11(a)(iii).
(ae) “Stock Acquisition Date” shall mean the first date of public announcement (including,
without limitation, the date a report is filed pursuant to Section 13(d)
of the Exchange Act) by the Company or an Acquiring Person that an Acquiring Person has become
an Acquiring Person. Notwithstanding anything in this Agreement to the contrary, a Stock
Acquisition Date shall not be deemed to have occurred by virtue or as a result of the public
announcement of any Approved Transaction or the filing of a report pursuant to Section 13(d) in
connection with Approved Transaction.
(af) “Subsidiary” of any Person shall mean any corporation or other entity of which a majority
of the voting power of the voting equity securities or equity interest is owned, directly or
indirectly, by such Person.
(ag) “Substitution Period” shall have the meaning set forth in Section 11(a)(iii).
(ah) “Trading Day” shall have the meaning set forth in Section 11(d).
(a) Until the earlier of (i) the close of business on the tenth day after the Stock
Acquisition Date (or, if the tenth day after the Stock Acquisition Date is prior to the Record
Date, the Record Date) or (ii) the close of business on the tenth day after the date that a tender
or exchange offer by any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or of any Subsidiary of the Company, any entity holding shares
of Common Stock for or pursuant to the terms of any such plan or any Person or its Affiliates
offering to acquire securities of the Company pursuant to an Approved Transaction) is first
published or sent or given within the meaning of Rule 14d-2(a) of the General Rules and Regulations
under the Exchange Act, if upon consummation thereof, such Person would be the Beneficial Owner of
15 percent or more of the shares of Common Stock then outstanding (the earliest of (i) and (ii)
being herein referred to as the “Distribution Date”), (w) the Rights will be evidenced by the
certificates for the Common Stock registered in the names of the holders of the Common Stock (which
certificates shall also be deemed to be certificates for Rights) and not by separate Rights
Certificates, (x) the Rights and the right to receive Rights Certificates will be transferable only
in connection with the transfer of the underlying Common Stock and any transfer of Common Stock
shall also constitute the transfer of the associated Rights represented by the same certificate,
(y) in the event the Company purchases or acquires any Common Stock after the Record Date but prior
to the Distribution Date, any Rights associated with such acquired Common Stock shall be deemed
canceled and retired so that the Company shall not be entitled to exercise any Rights associated
with shares of Common Stock that are no longer outstanding, and (z) in the event the Company issues
any
Common Stock after the Record Date but prior to the earliest of the Distribution Date, the
Redemption Date or the Final Expiration Date, the Company shall issue one Right for each such newly
issued share of Common stock (subject to adjustment as provided in Section 11(h)) which Right shall
be evidenced by the certificate for the associated share 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, postage-prepaid mail, to each
record holder of shares of Common Stock as of the close of business on the Distribution Date, at
the address of such holder shown on the records of the Company, a Rights Certificate, in
substantially the form of Exhibit A hereto (a “Rights Certificate”), evidencing one Right for each
share of Common Stock so held, subject to adjustment as provided herein. In the event that an
adjustment in the number of Rights per share of Common Stock has been made pursuant to Section
11(h), at the time the Rights Certificates are distributed the Company shall make the necessary and
appropriate rounding adjustments pursuant to Section 14(a) so that Rights Certificates are
distributed representing only whole numbers of Rights and cash is paid in lieu of fractional
Rights. As of and after the Distribution Date, the Rights will be evidenced solely by such Rights
Certificates. Notwithstanding anything
in this Agreement to the contrary, a Distribution Date
shall not be deemed to have occurred as the result of any Approved Transaction.
(b) [intentionally omitted]
(c) All Common Stock certificates which are issued, either upon an original issuance by the
Company or upon a transfer by a holder, after the date hereof 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:
Effective January 31, 2001, this certificate also evidences and
entitles the holder hereof to certain rights set forth in a Rights
Agreement between Sundog Technologies, Inc. (the “Company”) and
Atlas Stock Transfer Corporation dated as of December 22, 2000 (the
“Rights Agreement”), the terms of which are incorporated herein by
reference and a copy of which is on file at the principal executive
offices of the Company. Under certain circumstances, as set forth
in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate.
The Company will mail to the holder of this certificate a copy of
the Rights Agreement without charge after receipt of a written
request therefor. Under certain circumstances, Rights beneficially
owned by Acquiring Persons or their Affiliates or Associates (as
such terms are defined in the Rights Agreement), and Rights
previously owned by such Persons, may become null and void.
(a) The Rights Certificates (and the form of election to purchase and form of assignment to be
printed on the reverse thereof) shall be substantially the same as 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 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 on which the Rights may
from time to time be listed, or to conform to usage. Subject to the provisions of Section 11 and
Section 22, the Rights Certificates, whenever distributed, shall entitle the holders thereof to
purchase for the Purchase Price such number of one one-hundredths of a share of Preferred Stock as
shall be set forth therein, but the amount and type of securities purchasable upon exercise and the
Purchase Price shall be subject to adjustment as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3 hereof that represents Rights
beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an Acquiring Person,
(ii) any other Person if such Rights formerly were beneficially owned by an Acquiring Person (or by
an Associate or Affiliate of such Acquiring Person) at a time after the Acquiring Person became an
Acquiring Person, or (iii) a transferee of Rights from an Acquiring Person (or from any Associate
or Affiliate thereof) who became a transferee prior to or
concurrently with the Acquiring Person
becoming an Acquiring Person and receives such Rights pursuant to either (A) a transfer (whether or
not for consideration) from the Acquiring Person (or its Affiliate or Associate) to holders of
equity interests in such Acquiring Person (or its Affiliate or Associate) or to any Person with
whom such Acquiring Person (or its Affiliate or Associate) has any continuing agreement,
arrangement or understanding regarding the transferred Rights, or (B) a transfer which the Board of
Directors has determined is part of a plan, arrangement or understanding that has as a primary
purpose or effect the avoidance of Section 7(e), and any Rights Certificate issued pursuant to
Section 6, 7(d) or 22 upon transfer, exchange, replacement or adjustment of any other Rights
Certificate referred to in this sentence, shall contain the following legend:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was an Acquiring Person or an
Affiliate or Associate of an Acquiring Person (as such terms are
defined in the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may become null and
void in the circumstances specified in Section 7(e) of the Rights
Agreement;
provided, however, that the Rights Agent shall not have any responsibility to
ascertain the existence of facts that would require the imposition of such legend and shall be
required to impose such legend only if instructed to do so by the Company or if a holder fails to
certify
upon transfer or exchange in the space provided on the Rights Certificate that such holder is not
an Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Following the Distribution Date and receipt by the Rights Agent of all relevant information,
the Rights Agent will keep or cause to be kept, at its offices designated for such purposes, books
for registration and transfer of the Rights Certificates issued hereunder. Such books shall show
the names and addresses of the respective holders of the Rights Certificates, the number of Rights
evidenced on its face by each of the Rights Certificates and the date of each of the Rights
Certificates.
(a) Subject to the provisions of Sections 4(b), 7(e) and 14, at any time after the Close of
Business on the Distribution Date, and at or prior to the Close of Business on the earlier of the
Redemption Date or the Final Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights Certificate or Certificates,
entitling the registered holder to purchase a like number of shares of Preferred Stock or other
securities or property as the Rights Certificate or Certificates surrendered then entitled such
holder to purchase. Any registered holder desiring to transfer, split up, combine or exchange any
Rights Certificate or Certificates shall make such request in writing delivered to the Rights Agent
and shall surrender the Rights Certificate or Certificates to be transferred, split up, combined or
exchanged at the office of the Rights Agent designated for such purpose. Neither the Rights Agent
nor the Company shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Rights Certificate until the registered holder shall have completed and signed
the certificate contained in the form of assignment on the reverse side of such Rights Certificate
and shall have provided such additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates
thereof as the Company or the Rights Agent shall reasonably request. Thereupon the Rights
Agent shall, subject to Sections 4(b), 7(e) and 14, countersign and deliver to the person entitled
thereto a Rights Certificate or Rights Certificates, as the case may be, as so requested. The
Company may require payment of a sum sufficient to cover any tax or governmental charge that may be
imposed in connection with any transfer, split-up, combination or exchange of Rights Certificates.
The Rights Agent shall have no duty or obligation to take any action under any section of this
Agreement which requires the payment by a Rights holder of applicable taxes and governmental
charges unless and until the Rights Agent is satisfied that all such taxes and/or charges have been
paid.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to
them of the loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss,
theft or destruction, of indemnity or security 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 Rights
Certificate if mutilated, the Company will make and deliver a new Rights Certificate of like tenor
to the Rights Agent for delivery to the registered holder in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
(a) The Rights shall become exercisable on the Distribution Date, and thereafter the
registered holder of any Rights Certificate, subject to Section 7(e) hereof, may exercise the
Rights evidenced thereby (except as otherwise provided herein including, without limitation, the
restrictions on exercisability set forth in Sections 9(c), 11(a)(iii) and 23), in whole or in part
upon surrender of the Rights Certificate, with the form of election to purchase and certificate on
the reverse side thereof duly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the Purchase Price for each Right that is
exercised, at any time which is both after the Distribution Date and prior to the earliest of (i)
the time immediately prior to the acceptance for payment and payment for any securities of the
Company tendered pursuant to an Approved Transaction (“Acceptance Date”), but only if the
Acceptance Date shall occur, (ii) the Close of Business on December 1, 2010 (the “Final
Expiration Date”) or (iii) the time at which the Rights are redeemed as provided in Section 23
hereof (the “Redemption Date”). The Company will provide the Rights Agent with notice of
the Acceptance Date; provided, however, that failure to notify the Rights Agent of the Acceptance
Date shall not in any way effect the time at which the Rights cease to be exercisable pursuant to
the foregoing sentence.
(b) The Purchase Price to be paid on exercise of each Right shall initially be $60.00 and
shall be payable in lawful money of the United States of America in accordance with paragraph (c)
below. Each Right shall initially entitle the holder to acquire one one-hundredth of a share of
Preferred Stock upon exercise of the Right. The Purchase Price and the number of shares of
Preferred Stock or other securities or assets for which a Right is exercisable shall be subject to
adjustment as provided in Sections 11 and 13.
(c) Upon receipt of a Rights Certificate representing exercisable Rights, with the form of
election to purchase duly executed, accompanied by payment of the Purchase Price for the shares to
be purchased and an amount equal to any applicable tax or governmental charge in cash, or by
certified check or cashier’s check payable to the order of the Company, the Rights Agent shall,
subject to Section 20(k), thereupon promptly (i) requisition from any transfer agent of the
Preferred Stock (or make available, if the Rights Agent is the transfer agent) certificates for the
number of shares of Preferred Stock to be purchased and the Company hereby authorizes its transfer
agent to comply with all such requests, (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,
(iii) after receipt of the certificates for Preferred Stock cause the same to be delivered to or
upon the order of the registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder and (iv) when appropriate, after receipt, deliver such
cash to or upon the order of the registered holder of such Rights Certificate. In the event that
the Company is obligated to issue other securities (including, but not limited to, debt securities)
of the Company, and/or distribute other property pursuant to Section 11, the Company covenants that
it will make all arrangements necessary so that such other securities and/or property are available
for distribution by the Rights Agent, if and when necessary to comply with this Agreement.
(d) In case the registered holder of any Rights Certificate shall exercise less than all the
Rights evidenced thereby, a new Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent to the registered holder of
such Rights
Certificate or to his duly authorized assigns, subject to the provisions of Section 6 and Section
14.
(e) Notwithstanding any other provision of this Agreement, from and after the occurrence of a
Stock Acquisition Date, any Rights beneficially owned by (i) an Acquiring Person, or any Associate
or Affiliate of an Acquiring Person, (ii) any other Person if such Rights formerly were
beneficially owned by an Acquiring Person (or by an Associate or Affiliate of such Acquiring
Person) at a time after such Acquiring Person became an Acquiring Person, or (iii) a transferee of
Rights from an Acquiring Person (or from any Associate or Affiliate thereof) who became a
transferee prior to or concurrently with the Acquiring Person becoming an Acquiring Person and
receives such Rights pursuant to either (A) a transfer (whether or not for consideration) from the
Acquiring Person (or its Affiliate or Associate) to holders of equity interests in such Acquiring
Person (or its Affiliate or Associate) or to any Person with whom the Acquiring Person (or its
Affiliate or Associate) has any continuing agreement, arrangement or understanding regarding the
transferred Rights, or (B) a transfer which the Board of Directors has determined is part of a
plan, arrangement or understanding that has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void and any holder of such Rights shall thereafter have no
right to exercise such Rights under any provision of this Agreement. The Company shall promptly
notify the Rights Agent of the applicability of this Section 7(e) and shall use all reasonable
efforts to ensure that the provisions of this Section 7(e) and of Section 4(b) are complied with,
but neither the Company nor the Rights Agent shall have any liability to any holder of Rights
Certificates or any other Person as a result of the Company’s failure to make any determinations
with respect to an Acquiring Person, or any of its Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7 unless such registered holder
shall have (i) properly completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the surrendered Right Certificate and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company or the Rights Agent shall reasonably request.
(a) The Company covenants and agrees that it will cause to be reserved and kept available out
of its authorized and unissued Preferred Stock (and, following the occurrence of a Stock
Acquisition Date or a Section 13 Event, out of its authorized and unissued shares of Common Stock
and/or other securities), the number of shares of Preferred Stock (and, following the occurrence of
a Stock Acquisition Date or a Section 13 Event, Common Stock and/or other securities) that, as
provided in this Agreement, will be sufficient to permit the exercise in full of all outstanding
Rights; provided, however, that shares issuable pursuant to Section 11(a)(ii) shall be reserved
only following the occurrence of an event described in that section.
(b) If any shares of Preferred Stock are listed on a national securities exchange, and so long
as the shares of Preferred Stock (and, following the occurrence of a Stock Acquisition Date or a
Section 13 Event, Common Stock and/or other securities) issuable and deliverable upon the exercise
of the Rights may be listed on that exchange, 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 on the exchange upon official notice of issuance upon exercise.
(c) The Company shall use its best efforts (i) to file, as soon as practicable following a
Stock Acquisition Date and the determination by the Company in accordance with
Section 11(a)(iii) of the consideration to be delivered by the Company upon exercise of the
Rights, or as soon as is required by law following the Distribution Date, as the case may be, a
registration statement under the Act with respect to the securities purchasable upon exercise of
the Rights on an appropriate form, (ii) to cause such registration statement to become effective as
soon as practicable after such filing, and (iii) to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the Act) until the earlier of
(A) the date as of which the Rights are no longer exercisable for such securities, and (B) the date
of the expiration of the Rights. The Company will also take such action as may be appropriate
under or to ensure compliance with, the securities or “blue sky” laws of the various states in
connection with the exercisability of the Rights. The Company may temporarily suspend the
exercisability of the Rights, for a period of time not to exceed 120 days after the date the
Company first becomes obligated to use its best efforts to file a registration statement as set
forth in clause (i) of the first sentence of this Section 9(c), in order to prepare and file such
registration statement and permit it to become effective. Upon any such suspension, the Company
shall issue a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the suspension is no longer
in effect. The Company will notify the Rights Agent whenever it makes a public announcement
pursuant to Section 9(c) and will provide the Rights Agent with a copy of such announcement.
Notwithstanding any provision of this Agreement to the contrary, the Rights shall not be
exercisable in any jurisdiction, unless the requisite qualification in such jurisdiction shall have
been obtained and until a registration statement has 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 occurrence of a Stock Acquisition
Date or Section 13 Event, Common Stock and/or other securities) delivered upon exercise of Rights
shall, at the time of delivery of the certificates for such shares of such shares (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
taxes and governmental charges which may be payable in respect of the issuance or delivery of the
Rights Certificates or of any shares of Preferred Stock or other securities upon the exercise of
Rights. The Company shall not, however, be required to pay any tax or governmental charge which
may be payable in respect of any transfer, split-up, combination or exchange of Rights
Certificates, or any issuance or delivery of certificates for shares in a name other than that of
the registered holder of the Rights Certificate evidencing Rights surrendered for exercise, and
shall not be required to issue or deliver any certificates for shares upon the exercise of any
Rights until any such tax or governmental charge shall have been paid (any such tax or governmental
charge being payable by the holder of such Rights Certificate at the time of surrender) or until it
has been established to the Company’s satisfaction that no such tax is due.
(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 Preferred Stock, (B) subdivide the
outstanding Preferred Stock, (C) combine the outstanding Preferred Stock into a smaller
number of shares of Preferred Stock or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including 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 number and kind of shares of capital stock issuable at the time of the record date for such dividend or of the
effective date of such subdivision, combination or reclassification, 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, he or she would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision, combination or
reclassification. The adjustments provided for in this Section 11(a)(i) shall be made
successively whenever such a dividend is declared or paid or such a subdivision, combination
or reclassification is effected. If an event occurs which would require an adjustment under
both this Section 11(a)(i) and Section 11(a)(ii), the adjustment provided for in this
Section 11(a)(i) shall be in addition to, and shall be made prior to, any adjustment
required pursuant to Section 11(a)(ii).
(ii) In the event that a Stock Acquisition Date occurs, subject to Section 23, proper
provision shall be made so that each holder of a Right, except as provided below and in
Section 7(e), shall thereafter have a right to receive, upon
exercise thereof and payment of the Purchase Price in accordance with the terms of this
Agreement, in lieu of a number of one one-hundredths of a share of Preferred Stock, such
number of shares of Common Stock as shall equal the result obtained by dividing the then
current Purchase Price by 50 percent of the Current Per Share Market Price of the Common
Stock (determined pursuant to Section 11(d)) on the Stock Acquisition Date (such number of shares being the “Adjustment Shares”).
(iii) In the event the number of shares of Common Stock which are authorized by the
Company’s Certificate of Incorporation but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to permit the exercise in
full of the Rights in accordance with the foregoing subparagraph (ii) of this Section 11(a),
the Company shall (A) determine the excess of (1) the value of the Adjustment Shares
issuable upon the exercise of a Right (the “Current Value”) over (2) the then current
Purchase Price (such excess, the “Spread”), and (B) with respect to each Right, make
adequate provision to substitute for the Adjustment Shares, upon payment of the applicable
Purchase Price, (1) cash, (2) a reduction in the applicable Purchase Price, (3) shares of
Common Stock or other equity securities of the Company (including, without limitation, shares, or units of shares, of preferred stock that the Board has deemed to have the same
value as shares of Common Stock (“Common Stock Equivalents”)), (4) debt securities of the
Company, (5) other assets, or (6) any combination of the foregoing, having an aggregate
value equal to the Current Value, where such aggregate value has been determined by the
Board based upon the advice of a nationally recognized investment banking firm selected by
the Board; provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within 30 days following the Stock
Acquisition Date, then the Company shall be obligated to deliver, upon the surrender for
exercise of a Right and without requiring payment of the Purchase Price, shares of Common
Stock (to the extent available) and then, if necessary, cash, which shares and/or cash have
an aggregate value equal to the Spread. If the Board 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, the 30-day period set forth above may be extended to
the extent necessary, but not more than 90 days after the Stock Acquisition Date, in order
that the Company may seek shareholders approval for the authorization of such additional shares (such period, as it may be extended as so permitted, the “Substitution Period”). To
the extent the Company determines that some action must be taken pursuant to the first or
second sentences of this Section 11(a)(iii), the Company (x) shall provide that such action
shall apply uniformly to all outstanding Rights other than those that are null and void as
provided in Section 7(e), 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
first 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 notice by the Company of such announcements to the
Rights Agent). For purposes of this Section 11(a)(iii), the value of the Common Stock shall
be
the Current Per Share Market Price (as determined pursuant to Section 11(d) hereof) of
the Common Stock on the date of the Stock Acquisition Date and the value of any Common Stock
Equivalent shall be deemed to have the same value as the Common Stock on such date.
(b) In case the Company shall at any time after the date of this Agreement fix a record date
for the issuance of rights, options or warrants to all holders of Preferred Stock entitling them
(for a period expiring within 45 calendar days after such record date) to subscribe for or purchase
Preferred Stock (or shares having the same rights, privileges and preferences as the Preferred
Stock (“Preferred Stock Equivalents”)) or securities convertible into Preferred Stock or Preferred
Stock Equivalents at a price per share of Preferred Stock or Preferred Stock Equivalent (or having
a conversion price per share, if a security convertible into Preferred Stock or Preferred Stock
Equivalents) less than the then Current Per Share Market Price of the Preferred Stock (as defined
in Section 11(d)) on such record date, the number of shares of Preferred Stock for which each Right
shall be exercisable after such record date shall determined by multiplying the number of shares of
Preferred Stock for which each Right was exercisable immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of Preferred Stock outstanding on
such record date plus the number of additional shares of Preferred Stock and/or Preferred Stock
Equivalents to be offered for subscription or purchase (or into which the convertible securities so
to be offered are initially convertible) and the denominator of which shall be the number of shares
of Preferred Stock outstanding on such record date plus the number of shares of Preferred Stock
which the aggregate offering price of the total number of shares of Preferred Stock and/or
Preferred Stock Equivalents so to be offered (and/or the aggregate initial conversion price of
convertible securities so to be offered) would purchase at such Current Per Share Market Price. 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 and
shall be binding on the Rights Agent and the holders of the Rights. Preferred Stock owned by or
held for the account of the Company shall not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever such a record date is fixed; and
in the event that such rights, options or warrants are not so issued, the number of shares of
Preferred Stock for which each Right shall be exercisable shall be readjusted to be the number of
shares of Preferred Stock for which each Right would then be exercisable if such record date had
not been fixed; and to the extent such rights, options or warrants are issued but not exercised
prior to their expiration, the number of shares for which each Right shall be exercisable shall be
readjusted to be the number which would have resulted from the adjustment provided for in this
Section 11(b) if only the rights or warrants that were exercised had been issued.
(c) (i) In case the Company shall at any time after the date of this Agreement fix a
record date for the making of a distribution to all holders of 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 shares of Preferred Stock
but including any dividend payable in stock other
than Preferred Stock) or subscription rights or warrants (excluding those referred to
in Section 11(b)), the number of shares of Preferred Stock for which each Right shall be
exercisable after such record date shall be determined by multiplying the number of shares
of Preferred Stock for which each Right was exercisable 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 (as defined in Section 11(d)) on such record date, and the
denominator of which shall be such Current Per Share Market Price of the Preferred Stock,
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 and shall be
binding on the Rights Agent and the holders of the Rights) 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. 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 number of shares of Preferred Stock for which each Right shall be exercisable
shall be readjusted to be the number of shares of Preferred Stock for which each Right would
then be exercisable if such record date had not been fixed.
(ii) In case the Company shall at any time after the date of this Agreement fix a
record date for the making of a distribution to all holders of Common 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 shares of Common Stock) or
subscription rights or warrants (excluding those referred to in Section 11(h)(ii)), the
number of shares of Preferred Stock for which each Right shall be exercisable after such
record date shall be determined by multiplying the number of shares of Preferred Stock for
which each Right was exercisable immediately prior to such record date by a fraction, the
numerator of which shall be the then Current Per Share Market Price of the Common Stock (as
defined in Section 11(d)) on such record date, and the denominator of which shall be such
Current Per Share Market Price of the Common Stock, 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 and shall be binding on the Rights Agent and the
holders of the Rights) 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 Common
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 number of shares of Preferred
Stock for which each Right shall be exercisable shall be readjusted to be the number of shares of Preferred Stock for which each Right would then be exercisable if such record date
had not been fixed.
(d) (i) For the purpose of any computation hereunder, the “Current Per Share Market
Price” of common stock (including Common Stock) on any date shall be deemed to be the
average of the daily closing sale prices per share of the common stock
for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately prior to but not
including such date; provided, however, that in the event the Current
Per Share Market Price of common stock is determined during a period following the
announcement by the issuer of such common stock of (A) a dividend or distribution on such
common stock payable in such common stock or securities convertible into such common stock,
or (B) any subdivision, combination or reclassification of such common stock, 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 take into account such event. The closing sale price for each day
shall be the last sale price as reported by (W) the principal stock exchange on the which
respective security is traded, if the security is traded on a stock exchange, (X) if the
security is not trade on a stock exchange, the Nasdaq National Market or Nasdaq SmallCap
Market, if the security is quoted on either such market, or (Y) if the security is not
quoted on either such market, the Nasdaq OTC Bulletin Board, if the security is quoted on
such system. If the security is not quoted on such system, the closing sale price for each
day shall be the closing bid and asked prices as furnished by a professional market maker
making a market in the common stock selected by a majority of the Board of Directors. The
term “Trading Day” shall mean a day on which the principal national securities exchange on
which the common stock is listed or admitted to trading is open for the transaction of
business or, if the common stock is not listed or admitted to trading on any national
securities exchange, a Business Day. If the common stock is not publicly held or so listed
or traded for the 30-day period, “Current Per Share Market Price” shall mean the fair value
per share as determined in good faith by the Board, whose determination shall be described
in a statement filed with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the “Current Per Share Market Price”
of Preferred Stock shall be determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(d) (other than the last sentence thereof). If the
Current Per Share Market Price of Preferred Stock cannot be determined in the manner
provided above or if the Preferred Stock is not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), the “Current Per Share Market Price”
of Preferred Stock shall be conclusively deemed to be an amount equal to the Current Per
Share Market Price of the Common Stock multiplied by the Adjustment Number as that term is
defined in Section 2 of the Amendment to the Company’s Certificate of Incorporation, as
amended, designating the Preferred Stock (initially 100). If neither the Common Stock nor
the Preferred Stock is publicly held or so listed or traded, “Current Per Share Market
Price” of Preferred Stock shall mean the fair value per share as determined in good faith by
the Board, whose determination shall be described in a statement filed with the Rights Agent
and shall be conclusive for all purposes. For all purposes of this Agreement, the current
market price of one one-hundredth of a share of Preferred Stock shall be equal to the
Current Per Share Market Price of one share of Preferred Stock divided by 100.
(e) No adjustment in the Purchase Price or the number of shares for which a Right is
exercisable shall be required unless such adjustment would require an increase or
decrease of at least one percent in the Purchase Price or the number of shares for which a
Right
is exercisable; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and taken into account in
any subsequent adjustment. All calculations under this Section 11 shall be made to the nearest
cent or to the nearest ten-thousandth of a share of Common Stock or one-millionth of a share of
Preferred Stock, as the case may be. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier of (i) three 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), the holder of any Right
thereafter exercised shall become entitled to receive any shares of capital stock of the Company
other than Preferred Stock, thereafter the number of such other shares so receivable upon exercise
of any 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
Section 11 and the provisions of Sections 7, 9, 10, 13 and 14 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 or the number of shares of Preferred Stock for which a Right is exercisable
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) (i) In the event the Company shall, after the date of this Agreement and prior to
the Distribution Date, (A) declare a dividend on the Common Stock payable in Common Stock,
(B) subdivide the outstanding Common Stock, (C) combine the outstanding Common Stock into a
smaller number of shares of Common Stock, or (D) issue any shares of Common Stock in a
reclassification of the Common Stock (including any such reclassification in connection with
a consolidation or merger in which the Company is the continuing or surviving corporation),
the number of Rights associated with each share of Common Stock then outstanding, and the
number of Rights to be associated with each share of Common Stock which may thereafter
become outstanding prior to the Distribution Date, shall be proportionately adjusted so that
the number of Rights 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 number of shares of Common Stock outstanding immediately prior to such event
and the denominator of which shall be the number of shares of Common Stock outstanding
immediately after such event.
(ii) In the event the Company shall, after the date of this Agreement and prior to the
Distribution Date, fix a record date for the issuance of rights, options or warrants to all
holders of Common Stock entitling them (for a period expiring within 45 calendar days after
such record date) to subscribe for or purchase Common Stock or
securities convertible into Common Stock at a price per share of Common Stock (or
having a conversion price per share, if a security convertible into Common Stock) less than
the then Current Per Share Market Price of the Common Stock (as defined in Section 11(d)) on
such record date, the number of Rights associated with each share of
Common Stock then
outstanding, and the number of Rights to be associated with each share of Common Stock which
may thereafter become outstanding prior to the Distribution Date, shall be proportionately
adjusted so that the number of Rights associated with each share of Common Stock after such
record date shall be determined by multiplying the number of Rights associated with each
share of Common Stock immediately prior to such record date by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding on such record date plus the
number of shares of Common Stock which the aggregate offering price of the total number of shares of Common Stock so to be offered (and/or the aggregate initial conversion price of
the convertible securities so to be offered) would purchase at such Current Per Share Market
Price and the denominator of which shall be the number of shares of Common Stock outstanding
on such record date plus the number of additional shares of Common Stock to be offered for
subscription or purchase (or into which the convertible securities so to be offered are
initially convertible). In case such subscription price may be paid 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 and conclusive and binding for all
purposes. Common Stock owned by or held for the account of the Company shall not be deemed
outstanding for the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed. In the event that such rights, options
or warrants are not so issued, the number of Rights associated with each share of Common
Stock shall be readjusted to be the number of Rights that would have been associated with
each share of Common Stock if such record date had not been fixed; and to the extent such
rights, options or warrants are issued but not exercised prior to their expiration, the
number of Rights associated with each share shall be readjusted to be the number which would
have resulted from the adjustment provided for in this Section 11(h)(ii) if only the rights,
options or warrants that were exercised had been issued.
(iii) Notwithstanding the foregoing, the adjustments provided for in this Section 11(h)
shall not be made if the Company exercises its election provided for in Section 11(i).
(i) The Company may elect on or after the date of any event described in clauses (A) through
(D) of Section 11(h)(i) or described in Section 11(h)(ii), if such event occurs before the
Distribution Date (a “Section 11(h) Event”), to adjust the Purchase Price and the number of shares
of Preferred Stock purchasable upon the exercise of a Right in substitution for any adjustment
under Section 11(h) in the number of Rights associated with each share of Common Stock. If such
election is made, (i) the number of Rights associated with each share of Common Stock prior to the
Section 11(h) Event shall be maintained after the Section 11(h) Event, (ii) any new shares of
Common Stock issued in the Section 11(h) Event shall, as provided in Section 3(a), have issued with
it the number of Rights associated
with each share of Common Stock outstanding, and (iii) any combination of shares of Common
Stock into a smaller number of shares in the Section 11(h) Event shall result in a similar
combination of the associated Rights. The Purchase Price and the number
(j) Irrespective of any adjustment or change in the Purchase Price or the number of one
one-hundredths of a share of Preferred Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the Purchase Price per one
one-hundredth of a share and the number of one one-hundredths of a share of Preferred Stock which
were expressed in the initial Rights Certificates issued hereunder.
(k) In any case in which this Section 11 shall require that an adjustment in the Purchase
Price or the number of one one-hundredths of a share of Preferred Stock for which a Right is
exercisable be made effective as of a record date for a specified event, the Company may elect to
defer (with prompt notice of such deferral to the Rights Agent) until the occurrence of such event
the issuance to the holder of any Right exercised after such record date the number of one
one-hundredths of a share of Preferred Stock and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the number of one one-hundredths of a share of
Preferred Stock and other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price and the number of one one-hundredths of a share of
Preferred Stock for which a Right is exercisable 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.
(l) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled
to make such reductions in the Purchase Price, in addition to those adjustments expressly required
by this Section 11, as and to the extent that in their good faith judgment the Board of Directors
shall determine to be advisable in order that any consolidation or subdivision of the Preferred
Stock, issuance wholly for cash of any Preferred Stock at less than the current market price,
issuance wholly for cash of Preferred Stock or securities which by their terms are convertible into
or exchangeable for shares of Preferred Stock, dividends on Preferred Stock payable in Preferred
Stock or issuance of rights, options or warrants referred
to in Section 11(b), hereafter made by the Company to holders of its Preferred Stock shall not
be taxable to such shareholders or shall reduce the taxes payable by such shareholders.
(m) The Company covenants and agrees that, after the Distribution Date, it will not, except as
permitted by Section 23 or Section 26, take (or permit any Subsidiary to take) any action,
including any merger, consolidation or sale of assets if at the time such action is taken or
immediately thereafter it is reasonably foreseeable that such action will diminish substantially or
otherwise eliminate the benefits intended to be afforded by the Rights.
certificate setting forth such adjustment and a brief statement of the facts and computations
accounting for such adjustment, (b) file with the Rights Agent and with each transfer agent for the
Preferred Stock and the Common Stock a copy of such certificate and (c) mail a brief summary
thereof to each holder of Rights in accordance with Section 25. 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 adjustment unless and
until it shall have received such a certificate.
(a) In the event that, following the Distribution Date, directly or indirectly,
(i) the Company shall consolidate with, or merge with and into, any other Person (other
than a Subsidiary of the Company in a transaction that complies with Section 11(m)) and the
Company shall not be the continuing or surviving corporation of such consolidation or
merger,
(ii) any Person shall acquire shares of Common Stock of the Company in a share
exchange,
(iii) any Person (other than a Subsidiary of the Company in a transaction that complies
with Section 11(m)) shall consolidate with the Company, or merge with and into the Company
and the Company shall be the continuing or surviving corporation of such consolidation or
merger and, in connection with such consolidation or merger, all or part of the outstanding
Common Stock shall be changed into or exchanged for stock or other securities of any other
Person or cash or any 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 percent or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any Person other than the Company
or one or more of its wholly owned Subsidiaries in a transaction that complies with
Section 11(m),
then, and in each such case, proper provision shall be made so that (A) each holder of a
Right (except as otherwise provided in Section 7(e)) shall thereafter have the right to receive,
upon the exercise thereof and payment of the Purchase Price in accordance with the terms of this
Agreement, such number of validly authorized and issued, fully paid, nonassessable and freely
tradeable shares of common stock of the Principal Party (as hereinafter defined) not subject to any
liens, encumbrances, rights of first refusal or other adverse claims, as shall be equal to the
result obtained by dividing the then current Purchase Price by 50 percent of the Current Per Share
Market Price of the common stock of the Principal Party (determined pursuant to Section 11(d)) on
the date of consummation of the Section 13 Event, (B) the Principal Party shall thereafter be
liable for, and shall assume, by virtue of such Section 13 Event, all the obligations and duties of
the Company pursuant to this Agreement, (C) the term “Company” shall thereafter be deemed to refer
to the Principal Party, it being specifically intended that the provisions of Section 11 shall
apply to the Principal Party only following the first occurrence of a Section 13
Event, and (D) the
Principal Party shall take such steps (including, but not limited to, the reservation of a
sufficient number of shares of its common stock in accordance with Section 9) in connection with
such consummation as may be necessary to ensure that the provisions of this Agreement shall
thereafter be applicable, as nearly as reasonably may be, in relation to the common stock
thereafter deliverable upon the exercise of the Rights. The provisions of Section 11(a)(ii) shall
be of no effect following the first occurrence of an event described in Section 13.
(b) The term “Principal Party” shall mean
(i) in the case of any transaction described in clause (i), (ii) or (iii) of Section
13(a), the Person that is the issuer of any securities into which shares of Common Stock of
the Company are converted in such merger or consolidation, or for which shares of Common
Stock are exchanged in such share exchange, and if no securities are so issued, the Person
that is the other party to such merger, consolidation or share exchange or, if there is more
than one such Person, the Person the common stock of which has the highest aggregate Current
Per Share Market Price (determined pursuant to Section 11(d)); and
(ii) in the case of any transaction described in clause (iv) of Section 13(a), 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
transferred pursuant to such transaction or transactions or if the Person receiving the
largest portion of the assets or earning power cannot be determined, whichever Person the
common stock of which has the highest aggregate current market price (determined pursuant to
Section 11(d));
provided, however, that, if the common stock of such Person is not at such time and
has not been continuously over the preceding 12-month period registered under Section 12 of the
Exchange Act or such Person is not a corporation, then (A) if such Person is a direct or indirect
Subsidiary of one other Person which has common stock so registered, “Principal Party” shall refer
to such other Person, (B) if such Person is a direct or indirect Subsidiary of another Person but
is not a direct or indirect Subsidiary of another Person which has common stock so registered,
“Principal Party” shall refer to the ultimate parent entity of such first-mentioned Person, (C) if
such Person is directly or indirectly controlled by more than one Person, and one or more of such
other persons has common stock so registered, “Principal Party” shall refer to whichever of such
Persons that is the issuer of common stock so registered having the highest aggregate current
market price (determined pursuant to Section 11(d)), and (D) if such Person is directly or
indirectly controlled by more than one Person, and none of such other Persons have common stock so
registered, “Principal Party” shall refer to whichever ultimate parent entity is the corporation
having the greatest shareholders’ equity or, if no such ultimate parent entity is a corporation,
shall refer to whichever ultimate parent entity is the entity having the greatest net assets.
(c) The Company shall not enter into any transaction described in this Section 13 if at the
time of such transaction there are any rights, warrants, instruments or securities outstanding or
any agreements or arrangements which, as a result of the consummation
of such transaction, would
eliminate or substantially diminish the benefits intended to be afforded by the Rights. In
addition, the Company shall not consummate any such transaction unless the Principal Party shall
have a sufficient number of authorized shares of common stock which have not been issued or
reserved for issuance to permit the exercise in full of the Rights in accordance with this Section
13 and unless prior thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing for the terms set forth in this Section 13
and further providing that, as soon as practicable after execution of such agreement, the Principal
Party will
(i) prepare and file a registration statement under the Act with respect to the
securities purchasable upon exercise of the Rights on an appropriate form, and will use its
best efforts to cause such registration statement to (A) become effective as soon as
practicable after such filing, (B) remain effective (with a prospectus at all times meeting
the requirements of the Act) until the Final Expiration Date and, as soon as practicable
following the execution of such agreement, take such action as may be required to ensure
that any acquisition of such shares of common stock upon the exercise of the Rights complies
with any applicable state security or “blue sky” laws; and
(ii) deliver to holders of the Rights historical financial statements for the Principal
Party and each of its Affiliates which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
(d) In case the Principal Party which is to be a party to a transaction referred to in this
Section 13 has a provision in any of its authorized securities or in its Articles or Certificate of
Incorporation or Bylaws or other instrument governing its corporate affairs, which provision would
have the effect of (i) causing such Principal Party to issue, 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 Per
Share Market Price (determined pursuant to Section 11(d)) or securities exercisable for, or
convertible into, shares of common stock of such Principal Party at less than the then Current Per
Share Market Price (other than to holders of Rights pursuant to this Section 13) or (ii) providing
for any special payment, tax or similar provisions in connection with the issuance of the shares of
common stock of such Principal Party pursuant to the provisions of Section 13; then, in such event,
the Company 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 canceled, 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 provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event shall occur at
any time after the Stock Acquisition Date, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13. The provisions of
Section 11(a)(ii) shall be of no effect following the first occurrence of a Section 13 Event.
(a) The Company shall not be required to issue fractions of Rights or to distribute Rights
Certificates which evidence fractional Rights. In lieu of such fractional Rights, there shall be
paid to the registered holders of the Rights Certificates with regard to which such fractional
Right would otherwise be issuable, an amount in cash equal to the same fraction of the current
market value of a whole Right. For the purposes of this Section 14(a), the current market value of
a whole Right shall be the closing price of the Rights for the Trading Day immediately prior to the
date on which such fractional Rights would have been otherwise issuable. The closing price for any
day shall be the last sale price, or, in case no such sale takes place on such day, the average of
the high bid and low asked prices in the over-the-counter market, as reported by Nasdaq or such
other system then in use or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a professional market
maker making a market in the Rights selected by the Board. If on any such date no such market
maker is making a market in the Rights, the fair value of the Rights on such date as determined in
good faith by the Board shall be used.
(b) The Company shall not be required to issue fractions of shares of Preferred Stock (other
than fractions which are integral multiples of one one-hundredth of a share of Preferred Stock)
upon exercise of the Rights or to distribute certificates which evidence fractional shares of
Preferred Stock (other than fractions which are integral multiples of one one-hundredth of a share
of Preferred Stock). In lieu of fractional shares of Preferred Stock that are not integral
multiples of one one-hundredths of a share of Preferred Stock the Company shall pay to the
registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction of the current
market value of one one-hundredth of a share of Preferred Stock. For purposes of this Section
14(b), the current market value of one one-hundredth of a share of Preferred Stock shall be one
one-hundredth of the closing price of a share of Preferred Stock (as determined pursuant to Section
11(d)(ii) hereof) for the Trading Day immediately prior to the date of such exercise.
(c) Following the occurrence of a Stock Acquisition Date or Section 13 Event, the Company
shall not be required to issue fractions of shares of Common Stock upon exercise of the Rights or
to distribute certificates which evidence fractional shares of Common Stock. In lieu of fractional
shares of Common Stock, the Company may pay to the registered holders of Rights Certificates at the
time such Rights are exercised as herein provided an amount in cash equal to the same fraction of
current market value of one share of Common Stock. For purposes of this Section 14(c), the current
market value of one share of Common Stock shall be the closing price of one share of Common Stock
(as determined pursuant to Section 11(d)(i) hereof) for the Trading Day immediately prior to the
date of such exercise.
(d) The holder of a Right by the acceptance of the Right expressly waives his right to receive
any fractional Rights or any fractional shares upon exercise of a Right (except as provided above).
in his own
behalf and for his own benefit, enforce, and may institute and maintain any suit, action or
proceeding against the Company to enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Rights Certificate in the manner provided in such Rights Certificate
and in this Agreement. Without limiting the foregoing or any remedies available to the holders of
Rights, it is specifically acknowledged that the holders of Rights would not have an adequate
remedy at law for any breach of this Agreement and will be entitled to specific performance of the
obligations hereunder and injunctive relief against actual or threatened violations of the
obligations of any Person subject to this Agreement.
(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 Rights Certificates are transferable only on the registry
books of the Rights Agent if surrendered at the office of the Rights Agent
designated for such purpose, duly endorsed or accompanied by a proper instrument of transfer
and with the appropriate forms and certificates fully executed;
(c) subject to Sections 6 and 7(f), the Company and the Rights Agent may deem and treat the
Person in whose name the Rights Certificate (or, prior to the Distribution Date, the associated
Common Stock certificate) is registered as the absolute owner thereof and of the Rights evidenced
thereby (notwithstanding any notations of ownership or writing on the Right Certificates or the
associated Common Stock certificate made by anyone other than the Company or the Rights Agent) for
all purposes whatsoever, and neither the Company nor the Rights Agent, subject to the last sentence
of Section 7(e), shall be affected by any notice to the contrary; and
(d) Notwithstanding anything in this Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree, judgment or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative agency or commission, or any
statute, rule, regulation or executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided,
however, the Company must use its best efforts to have any such order, decree, judgment or
ruling lifted or otherwise overturned as soon as possible.
receive notice of
meetings or other actions affecting shareholders (except as provided in Section 23(c)), or to
receive dividends or subscription rights, or otherwise, until the Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the provisions hereof.
(a) The Company agrees to pay to the Rights Agent reasonable compensation for all services
rendered by it hereunder and, from time to time, on demand of the Rights Agent, its reasonable
expenses and counsel fees and other disbursements incurred in the preparation, delivery,
administration, execution and any amendment 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
costs or expense incurred without negligence, bad faith or willful misconduct on the part of the
Rights Agent, as determined by a court of
competent jurisdiction, for any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance and administration of this Agreement, including without limitation
the costs and expenses of defending against any claim of liability.
(b) The Rights Agent shall be protected and shall incur no liability for, or in respect of any
action taken, suffered or omitted by it in connection with its acceptance and administration of
this Agreement in reliance upon any Rights Certificate or certificate for shares of 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.
(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 stock
transfer business of the Rights Agent or any successor rights agent, shall be the successor to the
Rights Agent under this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties hereto, provided that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21. In case at the time
such successor Rights Agent shall succeed to the agency created by this Agreement, any of the
Rights Certificates shall have been countersigned but not delivered, any such successor Rights
Agent may adopt the countersignature of the predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights Certificates shall not
have been countersigned, any successor Rights Agent may countersign such Rights Certificates either
in the name of the predecessor Rights Agent or in the name of the successor Rights Agent; and in
all such cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and at such time any of
the Rights Certificates shall have been countersigned but not delivered, the
Rights Agent may adopt
the countersignature under its prior name and deliver Rights Certificates so countersigned; and in
case at that time any of the Rights Certificates shall not have been countersigned, the Rights
Agent may countersign such Rights Certificates either in its prior name or in its changed name; and
in all such cases such Rights Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(a) The Rights Agent may consult with legal counsel (who may be legal counsel for the
Company), and the written advice or opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent as to any action taken, suffered or omitted by it
in good faith and in accordance with such written advice or opinion.
(b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter be proved or established by the Company prior to
taking, omitting to take or suffering any action hereunder (including, without limitation, the
identity of any Acquiring Person and the determination of Current Per Share Market Price), such
fact or matter (unless other evidence in respect thereof be herein specifically prescribed) may be
deemed to be conclusively provided and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the
Treasurer or the Secretary of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization and protection to the Rights Agent for any action taken, omitted to be
taken or suffered 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 negligence, bad faith or willful 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 Rights 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 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 Rights Certificate (except its
countersignature thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Rights Certificate; nor shall it be
responsible for any change in the exercisability of the Rights (including the Rights becoming null
and void pursuant to Section 7(e) hereof) or any adjustment in the terms of the Rights (including
the manner, method or amount thereof) provided for in this Agreement 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 Rights Certificates after actual notice that such change or
adjustment is required); 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 Common Stock to
be issued pursuant to
this Agreement or any Right Certificate or as to whether any shares of
Preferred Stock or Common Stock 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 one of the Chairman of the Board, the Chief
Executive Officer, the President, any Vice President, the Secretary or the Treasurer of the
Company, and to apply to such officers for advice or instructions in connection with its duties,
and it shall not be liable for any action taken, omitted to be taken or suffered 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 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 or
omitted to be taken by the Rights Agent under this Agreement and the date on or after which such
action shall be taken or such omission shall be effective. The Rights Agent shall not be liable
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 date
shall not be less than five Business Days after the date any such officer of the Company actually
receives such application, unless any such officer shall have consented in writing to an earlier
date) unless, prior to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response to such application
specifying the action to be taken, suffered or omitted.
(h) The Rights Agent and any shareholder, affiliate, director, officer, or employee of the
Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or
become pecuniarily interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely as though 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.
(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 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 its believes that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate attached to the form of assignment or form of election to purchase, as
the case may be, has either not been completed or indicates an affirmative response to clause 1
and/or 2
thereof, the Rights Agent shall not take any further action with respect to such requested
exercise or transfer without first consulting with the Company.
Certificate shall
be issued if, and to the extent that, appropriate adjustment shall otherwise have been made in
lieu of the issuance thereof.
(a) The Board may at its option, at any time prior to the earliest of (i) the Close of
Business on the tenth day following a Stock Acquisition Date (or, if the Stock Acquisition Date
shall have occurred prior to the Record Date, the close of business on the tenth day following the
Record Date), (ii) a determination by the Board of Directors that any Person is an Adverse Person,
or (iii) the Close of Business on the Final Expiration Date, (A) redeem all but not less than all
the then outstanding Rights at a redemption price of $.001 per Right, appropriately adjusted to
reflect any stock split, stock dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the “Redemption Price”), or (B) waive
application of Section 11(a)(ii) with respect to the respective event(s) described in (i), (ii) or
(iii) above. Notwithstanding anything contained in this Agreement to the contrary, the Rights
shall not be exercisable as provided in Section 11(a)(ii) until such time as the Company’s right of
redemption hereunder has expired.
(b) Immediately upon the action of the Board ordering the redemption of the Rights (or at such
later time as shall be specified in the resolution taking such action), and without any further
action and without any notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price. Promptly after the
action of the Board of Directors ordering the redemption of the Rights, the Company shall give
notice of such redemption to the holders of the then outstanding Rights and the Rights Agent by
mailing such notice to all such holders 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 shares of 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 will state the method by which the payment of the Redemption Price will be made. The
Company may, at its option, pay the Redemption Price in cash, shares of Common Stock (based on the
Current Per Share Market Price, as defined in Section 11(d), of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by the Board of Directors.
(c) In case the Company shall propose (a) to pay any dividend payable in stock of any class to
the holders of its Preferred Stock or Common Stock or to make any other distribution to the holders
of its Preferred Stock or Common Stock (other than a regular quarterly cash dividend), (b) to offer
to the holders of its Preferred Stock or Common Stock rights or warrants to subscribe for or to
purchase any additional shares of Preferred Stock or Common Stock or shares of stock of any class
or any other securities, (c) to effect any reclassification of its Preferred Stock or Common Stock
(other than a reclassification involving only the subdivision of outstanding shares of Preferred
Stock or Common Stock), (d) to effect any consolidation, merger or share exchange into or with any
other Person (other than a Subsidiary of the Company in a transaction which complies with Section
11(m)), (e) to effect any sale or other transfer or to permit one or more of its Subsidiaries to
effect any sale or other transfer, in one or more related transactions, of 50 percent 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 and/or any of its
Subsidiaries in one or more transactions each of which complies with Section 11(m)), or (f) to
effect the liquidation, dissolution or winding up of the Company, then, in each such case, the
Company shall give to each holder of a Rights Certificate, to the extent feasible and in accordance
with Section 25, a notice of such proposed action, which shall
specify the record date for the
purposes of such stock dividend or distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, exchange, sale, transfer, liquidation, dissolution, or
winding up is to take place and the date of participation therein by the holders of the Preferred
Stock or Common 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 (a) or (b) above at least 20 days prior to the record date for
determining holders of the Preferred Stock or Common Stock for purposes of such action, and in the
case of any such other action, at least 20 days prior to the date of the taking of such proposed
action or the date of participation therein by the holders of the Preferred Stock or Common Stock
whichever shall be the earlier.
In case a Stock Acquisition Date shall occur, the Company shall as soon as practicable
thereafter give to the Rights Agent and to each holder of a Rights Certificate, in accordance with
Section 25, a notice of the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii).
(a) The Board may, at its option, at any time and from time to time after a Stock Acquisition
Date, exchange all or part of the then outstanding and exercisable Rights (which shall not include
Rights that have become null and void pursuant to the provisions of Section 7(e)) for shares of
Common Stock or Common Stock Equivalents, or any combination thereof, at an exchange ratio of one
share of Common Stock, or such number of Common Stock Equivalents or units representing fractions
thereof as would be deemed to have the same value as one share of Common Stock, per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter referred to as the “Exchange Ratio”).
(b) Immediately upon the action of the Board ordering the exchange of any Rights pursuant to
subsection (a) of this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock and/or Common Stock Equivalents equal to
the number of such Rights held by such holder multiplied by the Exchange Ratio. The Company shall
promptly give public notice of any such exchange (with prompt notice thereof to the Rights Agent);
provided, however, that the failure to give, or any defect in, such notice shall
not affect the validity of such exchange. The Company promptly shall mail a notice of any such
exchange to the Rights Agent and to all of the holders of such Rights 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 and/or
Common Stock Equivalents 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 7(e)) held by each holder of Rights.
(c) In the event that the number of shares of Common Stock which are authorized by the
Company’s Certificate of Incorporation as amended but not outstanding or reserved for issuance for
purposes other than upon exercise of the Rights are not sufficient to permit an exchange of Rights
as contemplated in accordance with this Section 24, the Company may, at its
option, take all such
action as may be necessary to authorize additional shares of Common Stock for issuance upon
exchange of the Rights.
(d) The Company shall not be required to issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares of Common Stock. In lieu of such
fractional shares of Common Stock, the company shall pay to the registered holders of Rights 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 value of a whole share of Common Stock. For purposes of
this Section 24, the value of a whole share of Common Stock shall be the closing price (as
determined pursuant to the second sentence of Section 11(d)(i) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24, and the value of any Common Stock
Equivalent shall be deemed to have the same value as the Common Stock on such date.
| Arkona, Inc. | ||
| 00000 Xxxxx Xxxxx Xxxxx Xxxxxxx, Xxxxx 000 | ||
| Xxxxx Xxxxxx, XX 00000 | ||
| Attention: Corporate Secretary | ||
| Facsimile: (000) 000-0000 | ||
Copy to:
|
Xxxxx X. Xxxxx | |
| Xxxx Xxxxxxxx Xxxxx Xxx and Xxxxxxxx | ||
| 000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000 | ||
| Xxxx Xxxx Xxxx, Xxxx 00000 | ||
| Facsimile: (000) 000-0000 |
Subject to the provisions of Section 21, any notice or demand authorized by this Agreement to be
given or made by the Company or by the holder of any Rights Certificate to or on the Rights Agent
shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed (until
another address is filed in writing with the Company) as follows:
| Atlas Stock Transfer Corporation | ||
| 0000 Xxxxx Xxxxx Xxxxxx | ||
| Xxxx Xxxx Xxxx, Xxxx 00000 | ||
| Facsimile: (000) 000-0000 |
Notices or demands authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Rights Certificate shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of such holder as shown
on the registry books of the Company.
after the Distribution Date, the Company and the Rights Agent shall, if the Board so directs,
supplement or amend this Agreement without the approval of any holders of Right Certificates in
order (i) to cure any ambiguity, (ii) to correct or supplement any provision contained herein which
may be defective or inconsistent with any other provisions herein, (iii) to shorten or lengthen any
time period hereunder, or (iv) to change or supplement the provisions hereunder in any manner which
the Company may deem necessary or desirable and which shall not adversely affect the interest of
the holders of Rights Certificates (other than an Acquiring Person or an Affiliate or Associate of
any such Person); provided, however, this Agreement may not be supplemented or
amended to lengthen, pursuant to clause (iii) of this sentence, (A) a time period relating to when
the Rights may be redeemed at such time as the Rights are not then redeemable, or (b) any other
time period unless such lengthening is for the purpose of protecting, enhancing or clarifying the
rights of or the benefits to, the holders of Rights. 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 26 and provided that such amendment or supplement does
not change or increase the Rights Agent’s duties, liabilities or obligations without the consent of
the Rights Agent (which consent will not be unreasonably withheld), the Rights Agent shall execute
such supplement or amendment. Prior to Distribution Date, the interests of the holders of Rights
shall be deemed coincident with the interests of the holders of shares of Common Stock.
foregoing) which are done or made by the Board in good faith, shall (a) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the Rights
and all other parties, and (b) not subject the Board to any liability to the holders of the Rights.
31. Governing Law. This Agreement and each Rights Certificate issued hereunder shall
be deemed to be a contract made under the laws of the State of Delaware and for all purposes shall
be governed by and construed in accordance with the laws of such State applicable to contracts to
be made and performed entirely within such State.
| Arkona, Inc. | ||||||
| By: | /s/ Xxxx Xxxx | |||||
| Xxxx Xxxx, its Chief Executive Officer | ||||||
| Atlas Stock Transfer Corporation | ||||||
| By | /s/ Xxx Xxxx | |||||
| Its | ||||||
EXHIBIT A
[Form of Rights Certificate]
Certificate No. R-
|
Rights |
| NOT EXERCISABLE AFTER DECEMBER 1, 2010 OR EARLIER IF REDEEMED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY ACQUIRING PERSONS OR THEIR RESPECTIVE AFFILIATES OR ASSOCIATES (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY RIGHTS PREVIOUSLY OWNED BY SUCH PERSONS MAY BECOME NULL AND VOID. [THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE RIGHTS AGREEMENT.]1 |
Rights Certificate
This certifies that , or registered assigns, is the registered owner of
the number of Rights set forth above, each of which entitles the owner thereof, subject to the
terms, provisions and conditions of the Amended and Restated Rights Agreement, dated as of
___, 2007 (the “Rights Agreement”) between Arkona, Inc., an Delaware corporation (the
“Company”), and Atlas Stock Transfer Corporation (the “Rights Agent”), to purchase from the Company
at any time prior to 5 p.m., New York time, on December 1, 2010 (the “Final Expiration Date”) at
the office or offices of the Rights Agent designated for such purpose, one one-hundredth of a fully
paid and nonassessable share of Series A Preferred Shares (the “Preferred Stock”) of the Company, at a purchase price of
$60.00 (the “Purchase Price”), upon presentation and surrender of this Rights Certificate with the
Form of Election to Purchase and
| 1 | The portion of the legend in brackets shall be inserted only if applicable and shall replace the preceding sentence. |
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related Certificate duly executed. The Purchase Price may be paid
in cash or by certified check or cashier’s check payable to the order of the Company. The number
of Rights evidenced by this Rights Certificate, the number of one one-hundredths of a share of
Preferred Stock which may be purchased upon exercise hereof, and the Purchase Price per Right set
forth above are the number of Rights, the number of one one-hundredths of a share and the Purchase
Price as of January 31, 2001, based on the Preferred Stock and Common Stock as constituted at such
date.
Upon the occurrence of a Stock Acquisition Date (as such term is defined in the Rights
Agreement), if the Rights evidenced by this Rights Certificate are beneficially owned by (i) an
Acquiring Person or any Affiliate or Associate of such Acquiring Person (as such terms are defined
in the Rights Agreement), (ii) any other person if such Rights formerly were beneficially owned by
such Acquiring Person (or by an Associate or Affiliate thereof) at a time after such Acquiring
Person, became an Acquiring Person, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of Rights from such Acquiring Person (or from any Associate or Affiliate
thereof) who became a transferee prior to or concurrently with such Acquiring Person becoming an
Acquiring Person, such Rights shall become null and void and no holder hereof shall have any right
with respect to such Rights from and after the occurrence of such an event.
As provided in the Rights Agreement, the Purchase Price and the number and kind of shares of
Preferred Stock or other securities or property which may be obtained upon the exercise of the
Rights evidenced by this Rights Certificate are subject to modification and adjustment upon the
happening of certain events, including a Stock Acquisition Date or a Section 13 Event (as such
terms are defined in the Rights Agreement).
This Rights Certificate is subject to all of the terms, provisions, and conditions of the
Rights Agreement, which terms, provisions, and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement reference is hereby made for a full
description of the Rights and the limitations on the rights, obligations, duties, and immunities
hereunder of the Rights Agent, the Company, and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of such Rights under
the specific circumstances set forth in the Rights Agreement. Copies of the Rights Agreement are
on file at the above-mentioned office of the Rights Agent and are also available upon written
request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon surrender at the
office or offices of the Rights Agent designated for such purpose, may be exchanged for another
Rights Certificate or Rights Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of one one-hundredths of a share of
Preferred Stock as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this Rights Certificate shall be
exercised in part, the holder shall be entitled to receive upon surrender hereof another Rights
certificate or Rights Certificates for the number of whole Rights not exercised.
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Subject to the provisions of the Rights Agreement, the Rights evidenced by this Certificate
may be redeemed by the Company at its option at a redemption price of $.001 per Right (and certain
rights evidenced hereby may be waived) at any time prior to the earlier of (i) the close of
business on the tenth day following the Stock Acquisition Date (as such period, may be extended
pursuant to the Rights Agreement) and (ii) the Final Expiration Date.
No fractional shares of Preferred Stock will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions which are integral multiples of one one-hundredths of
a share of Preferred Stock, which may, at the election of the Company be evidenced by depository
receipts), but in lieu thereof a cash payment will be made as provided in the Rights Agreement.
No holder of this Rights certificate, as such, shall be entitled to vote, receive dividends,
or be deemed for any purpose the holder of shares of Preferred Stock or of any other securities of
the Company which may at any time be issuable on the exercise hereof, nor shall anything contained
in the Rights Agreement or herein be construed to confer upon the holder hereof, as such, any of
the rights of a shareholder of the Company or any right to vote for the election of directors or
upon any matter submitted to shareholders at any meeting thereof, or to give or withhold consent to
any corporate action, or to receive notice of meetings or other actions affecting shareholders
(except as provided in the Rights Agreement), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by this Rights Certificate shall have been exercised
as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose until it shall have
been countersigned by the Rights Agent.
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WITNESS the facsimile signature of the proper officers of the Company and its corporate seal.
Dated as of , 2007.
| ATTEST: | Arkona, Inc. | |||||
Secretary
|
Title: | |||||
Countersigned:
|
||||||
By |
||||||
| Authorized Signature | ||||||
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[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights certificate.)
holder desires to transfer the Rights certificate.)
FOR VALUE RECEIVED |
||||
| hereby sells, assigns, and transfers unto | ||||
| (Please print name and address of transferee) | ||||
this Rights Certificate, together with all right, title, and interest therein, and does hereby
irrevocably constitute and appoint , Attorney, to transfer the within Rights
Certificate on the books of the within-named Company, with full power of substitution.
Dated , 2007.
| Signature |
Signature Guaranteed:
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate ___is ___is not being sold, assigned, and transferred by or on
behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as such terms are defined in the Rights Agreement);
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(2) after due inquiry and to the best knowledge of the undersigned, it ___did ___did not
acquire the Rights evidenced by this Rights Certificate from any Person who is, was, or
subsequently became an Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: , 2007.
Signature
Signature Guaranteed:
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The signatures to the foregoing Assignment and Certificate must correspond to the name as
written upon the face of this Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate.)
Rights represented by the Rights Certificate.)
TO:
The undersigned hereby irrevocably elects to exercise Rights represented by this
Rights Certificate to purchase the shares of Preferred Stock issuable upon the exercise of the
Rights (or such other securities of the Company or of any other person which may be issuable upon
the exercise of the Rights) and requests that certificates for such shares be issued in the name of
and delivered to:
(Please print name and address)
Please insert social security |
||
or other identifying number: |
||
If such number of Rights shall not be all the Rights evidenced by this Rights Certificate, a
new Rights Certificate for the balance of such Rights shall be registered in the name of and
delivered to:
(Please print name and address)
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Please insert social security |
||
or other identifying number: |
||
Dated , 2007.
| Signature |
Signature Guaranteed:
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Certificate
The undersigned hereby certifies by checking the, appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate ___are ___are not being exercised by or
on behalf of a Person is or was an Acquiring Person or an Affiliate or Associate of an Acquiring
Person (as such terms are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it ___did ___did not
acquire the Rights evidenced by this Rights Certificate from any Person who is, was, or became
Acquiring Person or an Affiliate or Associate of an Acquiring Person.
Dated: , 2007.
Signature
Signature Guaranteed
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