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EXHIBIT 4.5
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IMPSAT Fiber Networks, Inc.
and
The Bank of New York
Rights Agent
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Rights Agreement
Dated as of June [ ], 2000
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TABLE OF CONTENTS
Page
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Section 1. Certain Definitions.......................................................................................1
Section 2. Appointment of Rights Agent...............................................................................7
Section 3. Issue of Rights Certificates..............................................................................7
Section 4. Form of Rights Certificates..............................................................................10
Section 5. Countersignature and Registration........................................................................11
Section 6. Transfer, Splitup, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates...............................................................................12
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights............................................13
Section 8. Cancellation and Destruction of Rights Certificates......................................................15
Section 9. Reservation and Availability of Capital Stock............................................................15
Section 10. Preferred Stock Record Date..............................................................................17
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights..............................18
Section 12. Certificate of Adjusted Purchase Price or Number of Shares...............................................30
Section 13. Consolidation, Statutory Share Exchange, Merger or Sale or Transfer of Assets or Earning Power...........30
Section 14. Fractional Rights and Fractional Shares..................................................................33
Section 15. Rights of Action.........................................................................................34
Section 16. Agreement of Rights Holders..............................................................................35
Section 17. Rights Certificate Holder Not Deemed a Stockholder.......................................................36
Section 18. Concerning the Rights Agent..............................................................................36
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Section 19. Merger or Consolidation or Change of Name of Rights Agent................................................36
Section 20. Duties of Rights Agent...................................................................................37
Section 21. Change of Rights Agent...................................................................................40
Section 22. Issuance of New Rights Certificates......................................................................41
Section 23. Redemption and Termination...............................................................................42
Section 24. Notice of Certain Events.................................................................................43
Section 25. Notices..................................................................................................44
Section 26. Supplements and Amendments...............................................................................45
Section 27. Successors...............................................................................................45
Section 28. Determinations and Actions by the Board of Directors, etc................................................45
Section 29. Benefits of This Agreement...............................................................................46
Section 30. Severability.............................................................................................46
Section 31. Governing Law............................................................................................47
Section 32. Counterparts.............................................................................................47
Section 33. Descriptive Headings.....................................................................................47
Exhibit A -- Form of Rights Certificate
Exhibit B -- Form of Summary of Rights
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RIGHTS AGREEMENT
RIGHTS AGREEMENT, dated as of June [ ], 2000 (the "Agreement"), between
IMPSAT Fiber Networks, Inc., a Delaware corporation (the "Company"), and The
Bank of New York (the "Rights Agent").
W I T N E S S E T H
WHEREAS, on January 12, 2000 (the "Rights Dividend Declaration Date"),
the Board of Directors of the Company authorized and declared a dividend
distribution ("Distribution") of one Right for each share of Common Stock (as
hereinafter defined) of the Company outstanding at the close of business on
February 15, 2000 (the "Record Date"), and has authorized the issuance of one
Right (as such number may hereinafter be adjusted pursuant to the provisions of
Section 11(o) hereof) for each share of Common Stock of the Company issued
between the Record Date (whether originally issued or delivered from the
Company's treasury) and the Distribution Date (as hereinafter defined), each
Right initially representing the right to purchase one one-hundredth of a share
of Preferred Stock (as hereinafter defined) upon the terms and subject to the
conditions hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 20% or more of the shares of Common Stock then
outstanding, but shall not include the Exempt Investors, the Company, any
Subsidiary of the Company, any benefit plan of the Company or of any
Subsidiary of the Company, or any Person organized, appointed or
established by the Company for or pursuant to the terms of any such plan.
(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 of Directors upon determination that the
criteria set forth in Section 11(a)(ii)(B) apply to such Person.
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(d) "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act") and in effect on the date of this Agreement.
(e) 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 right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights, warrants or options,
or otherwise; provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "beneficially own," (A)
securities tendered pursuant to a tender or exchange offer made by
such Person or any of such Person's Affiliates or Associates until
such tendered securities are accepted for purchase or exchange, or
(B) securities issuable upon exercise of Rights at any time prior
to the occurrence of a Triggering Event, or (C) securities
issuable upon exercise of Rights from and after the occurrence of
a Triggering Event which Rights were acquired by such Person or
any of such Person's Affiliates or Associates prior to the
Distribution Date or pursuant to Section 3(a) or Section 22 hereof
(the "Original Rights") or pursuant to Section 11(i) hereof in
connection with an adjustment made with respect to any Original
Rights;
(ii) which such Person or any of such Person's Affiliates
or Associates, directly or indirectly, has the right to vote or
dispose of or has "beneficial ownership" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under
the Exchange Act as in effect on the date of this Agreement),
including pursuant to any agreement, arrangement or understanding,
whether or not in writing; provided, however, that a Person shall
not be deemed the "Beneficial Owner" of, or to "beneficially own,"
any security under this subparagraph (ii) as a result of an
agreement, arrangement or understanding to vote such security if
such agreement, arrangement or understanding: (A) arises solely
from a revocable proxy given in response to a public proxy or
consent solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under
the Exchange Act, and (B) is not also then reportable by such
Person on
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Schedule 13D under the Exchange Act (or any comparable or
successor report); or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliate or Associate thereof) with
which such Person (or any of such Person's Affiliates or
Associates) has any agreement, arrangement or understanding
(whether or not in writing), for the purpose of acquiring,
holding, voting (except pursuant to a revocable proxy as described
in the proviso to subparagraph (ii) of this paragraph (e)) or
disposing of any voting securities of the Company;
provided, however, that nothing in this paragraph (e) shall cause a
Person engaged in business as a broker dealer registered under Section 15
of the Exchange Act or an underwriter of securities to be the "Beneficial
Owner" of, or to "beneficially own," any securities acquired: (A) in the
ordinary course of its business and incident to the establishment or
maintenance by it of a primary or secondary market for such security, or
(B) through such Person's participation in good faith in a firm
commitment underwriting, in each case until the expiration of forty days
after the date of such acquisition; provided, further, that no Person
shall be deemed a "Beneficial Owner" of any security to the extent that
such Person would not be a "beneficial owner" of such security under Rule
16a-1(a)(1) under the Exchange Act.
(f) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the City of New York are
authorized or obligated by law or executive order to close.
(g) "close of business" on any given date shall mean 5:00 P.M.,
Eastern Standard time, on such date; provided, however, that if such date
is not a Business Day it shall mean 5:00 P.M., Eastern Standard Time, on
the next succeeding Business Day.
(h) "Common Stock" shall mean the common stock, $0.01 par value,
of the Company, except that "Common Stock" when used with reference to
any Person other than the Company shall mean the capital stock of such
Person with the greatest aggregate voting power, or the equity securities
or other equity interest having power to control or direct the
management, of such Person.
(i) "Common stock equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
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(j) "Current market price" shall have the meaning set forth in
Section 11(d)(i) hereof.
(k) "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
(l) "Distribution Date" shall have the meaning set forth in
Section 3(a) hereof.
(m) "Exchange Act" shall have the meaning set forth in Section
1(d) hereof.
(n) "Exempt Investor" shall mean (i) Nevasa Holdings Ltd.,
together with its Affiliates and Associates, irrespective of their
beneficial ownership of Common Stock, (ii) the Xxxxxx Xxxxxxx Investors
together with their Affiliates and Associates, provided that at the
relevant time of determination the beneficial ownership of shares of
Common Stock of such Persons shall be no more than 21% of the shares of
Common Stock then outstanding, and (iii) Nunsgate Limited, together with
its Affiliates and Associates, provided that at the relevant time of
determination the beneficial ownership of shares of Common Stock of such
Persons shall not exceed the lesser of (x) the Ownership Limitation or
(y) 25% of the number of shares of Common Stock then outstanding. No
Existing Stockholder that is an Exempt Investor shall cease to be an
Exempt Investor solely by virtue of a purchase from the Public Float
after the date hereof by the Company or by another Existing Stockholder
not an Affiliate of such Existing Stockholder.
(o) "Existing Stockholders" shall mean: (i) Xx. Xxxxxxx
Xxxxxxxxxx, Mr. Roberto Vivo and Xx. Xxxxxxx Xxxxxxxxx; (ii) the spouse
of any individual named in clause (i); (iii) the lineal descendants of
any person named in clauses (i) through (ii); (iv) the estate or any
guardian, custodian or other legal representative of any individual named
in clauses (i) through (iii); (v) any trust established solely for the
benefit of any one or more of the individuals named in clauses (i)
through (iv); (vi) any Person in which all of the equity interests are
owned, directly or indirectly, by any one or more of the Persons named in
clauses (i) through (v); (vii) Nevasa Holdings Ltd., (viii) Corporacion
IMPSA, S.A.; (ix) the Xxxxxx Xxxxxxx Investors and their Affiliates; (x)
Nunsgate Limited and its Affiliates; (xi) Credit Suisse First Boston;
(xii) Portafolio de Inversiones Suramericana; (xiii) Compania
Suramericana de Inversiones y Avaluos, (xiii) Compania Suramericana de
Inversiones; and (xiv) Compania Suramericana de Construcciones.
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(p) "Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
(q) "Final Expiration Date" shall mean the close of business on
December 31, 2010, unless extended by the Board of Directors of the
Company as provided in Section 7 hereof.
(r) "Xxxxxx Xxxxxxx Investors" shall mean the Persons collectively
defined as "Purchasers" in the Securityholders Agreement dated as of
March 19, 1998 among the Company and the other parties thereto, as
supplemented or amended, together with the permitted assignees of such
Persons.
(s) "Net Additions to the Public Float" shall mean the difference,
at any relevant time of determination, between sales and purchases of
shares of Common Stock to and from the Public Float by all Persons since
February 4, 2000, disregarding for the purpose of this calculation any
shares of Common Stock purchased by: (i) the Company or any Subsidiary of
the Company; or (ii) any Existing Stockholder (other than Nunsgate or any
of its Affiliates and Associates), to the extent that such purchases were
not at such relevant time of determination disclosed in a public filing
pursuant to the Exchange Act with the Securities and Exchange Commission;
provided, however, that if the preceding calculation produces a number
less than zero, Net Additions to the Public Float shall be equal to zero.
(t) "Ownership Limitation" shall equal (i) 17,171,199 shares of
Common Stock (i.e., the number of shares of Common Stock beneficially
owned by Nunsgate Limited as of February 4, 2000), plus (ii) 3,450,000
shares of Common Stock (i.e., 30% of the Public Float as of February 4,
2000), plus (iii) 30% of the Net Additions to the Public Float.
(u) "Person" shall mean any individual, firm, corporation,
partnership, company or other entity.
(v) "Preferred Stock" shall mean shares of the Company's Series B
Preferred Stock, and, to the extent that there is not a sufficient number
of shares of Preferred Stock authorized to permit the full exercise of
the Rights, any other series of such Preferred Stock of the Company
designated for such purpose containing terms substantially similar to the
terms of the Series B Preferred Stock.
(w) "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
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(x) "Public Float" shall mean the number of shares of Common Stock
that are held by the public, including pursuant to a public offering
registered under the Act (other than a registration relating solely to
stock option or other employee benefit plans), but shall in no event
include shares of Common Stock that are (i) beneficially owned by any of
the Existing Stockholders or any Affiliate of an Existing Stockholder, or
(ii) which are subject to restrictions on transfer imposed by Rule 144
under the Act; provided, that any Existing Stockholder may, by written
notice in accordance with Section 25, request from the Company a
calculation of the number of shares of Common Stock comprising the Public
Float as of a specified date, and the Company shall provide this
information to such Existing Stockholder as soon as practicable;
provided, further, that the Company's calculation of the Public Float in
response to any such request shall, absent manifest error, be final and
conclusive and binding with respect to such Existing Stockholder.
(y) "Purchase Price" shall have the meaning set forth in Section
4(a) hereof.
(z) "Record Date" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.
(aa) "Redemption Price" shall have the meaning set forth in
Section 23(a) hereof.
(bb) "Rights" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.
(cc) "Rights Certificates" shall have the meaning set forth in
Section 3(a) hereof.
(dd) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii)(A) or (B) hereof.
(ee) "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
(ff) "Section 13 Event" shall mean any event described in clause
(x), (y) or (z) of Section 13(a) hereof.
(gg) "Spread" shall have the meaning set forth in Section
11(a)(iii) hereof.
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(hh) "Stock Acquisition Date" shall mean the first date of a
public announcement (which, for purposes of this definition, shall
include, without limitation, a report filed pursuant to Section 13(d)
under the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such.
(ii) "Subsidiary" shall mean, with reference to any Person, any
corporation, partnership, company or other entity of which an amount of
voting securities sufficient to elect at least a majority of the
directors, managers, trustees or similar persons, of such entity is
beneficially owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.
(jj) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
(kk) "Trading Day" shall have the meaning set forth in Section
11(d)(i) hereof.
(ll) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
Section 2. Appointment of Rights Agent. The Company hereby appoints the
Rights Agent to act as agent for the Company and the holders of the Rights (who,
in accordance with Section 3 hereof, shall prior to the Distribution Date also
be the holders of the Common Stock) in accordance with the terms and conditions
hereof, and the Rights Agent hereby accepts such appointment. The Company may
from time to time appoint such Co-Rights Agents as it may deem necessary or
desirable.
Section 3. Issue of Rights Certificates.
(a) Until the earliest of (i) the close of business on the tenth
Business Day after the Stock Acquisition Date, (ii) the close of business
on the tenth Business Day after the latest of (A) 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, or any Person organized, appointed or
established by the Company for or pursuant to the terms of any such plan)
is first published or sent or given within the meaning of Rule 14d-2(a)
of the General Rules and Regulations under the Exchange Act as in effect
on the date hereof, if upon consummation thereof, such Person would be
the Beneficial Owner of 20% or more of the shares of Common Stock then
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outstanding, or (B) the date upon which all regulatory approvals required
for the acquisition of stock pursuant to the tender or exchange offer
referred to in clause (A) have been obtained or waived, or (C) the date
upon which any approval required of the security holders of the Person
publishing or sending or giving the tender or exchange offer referred to
in clause (A), for the acquisition of stock pursuant to such tender or
exchange offer, is obtained or waived or (iii) the close of business on
the tenth Business Day after the Board of Directors of the Company
determines, pursuant to the criteria set forth in Section 11(a)(ii)(B)
hereof, that a Person is an Adverse Person (the earliest of (i), (ii) and
(iii) being herein referred to as the "Distribution Date"), (x) the
Rights will be evidenced (subject to the provisions of paragraph (b) of
this Section 3) by the certificates for the Common Stock registered in
the names of the holders of the Common Stock (which certificates for
Common Stock shall be deemed also to be certificates for Rights) and not
by separate certificates, and (y) the Rights will be transferable only in
connection with the transfer of the underlying shares of Common Stock
(including a transfer to the Company). As soon as practicable after the
Distribution Date, the Rights Agent will send by first-class, insured,
postage prepaid mail, to each record holder of the Common Stock as of the
close of business on the Distribution Date, at the address of such holder
shown on the records of the Company, one or more rights, certificates, in
substantially the form of Exhibit A hereto (the "Rights Certificates"),
evidencing one Right for each share of Common Stock so held, subject to
adjustment as provided herein. In the event that an adjustment in the
number of Rights per share of Common Stock has been made pursuant to
Section 11(o) hereof, at the time of distribution of the Right
Certificates, the Company shall make the necessary and appropriate
rounding adjustments (in accordance with Section 14(a) hereof) so that
Rights Certificates representing only whole numbers of Rights are
distributed and cash is paid in lieu of any fractional Rights. As of and
after the Distribution Date, the Rights will be evidenced solely by such
Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Company will send a copy of a Summary of Rights to Purchase Preferred
Stock, in substantially the form attached hereto as Exhibit B, by
first-class, postage prepaid mail, to each record holder of the Common
Stock as of the close of business on the Record Date, at the address of
such holder shown on the records of the Company. With respect to
certificates for the Common Stock outstanding as of the Record Date,
until the Distribution Date, the Rights will be evidenced by such
certificates for the Common Stock and the registered holders of the
Common Stock shall also be the registered holders of the associated
Rights. Until the earlier of the
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Distribution Date or the Expiration Date, the transfer of any
certificates representing shares of Common Stock in respect of which
Rights have been issued shall also constitute the transfer of the Rights
associated with such shares of Common Stock.
(c) Rights shall be issued in respect of all shares of Common
Stock which are issued after the Record Date but prior to the earlier of
the Distribution Date or the Expiration Date. Certificates representing
such shares of Common Stock shall also be deemed to be certificates for
Rights, and certificates issued after the Record Date shall bear the
following legend:
This certificate also evidences and entitles the holder
hereof to certain Rights as set forth in the Rights Agreement
between IMPSAT Fiber Networks, Inc. (the "Company") and The Bank
of New York (the "Rights Agent") dated as of June [ ], 2000 (the
"Rights Agreement"), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the
principal offices of the Company. Under certain circumstances, as
set forth in the Rights Agreement, such Rights will be evidenced
by separate certificates and will no longer be evidenced by this
certificate. The Company will mail to the holder of this
certificate a copy of the Rights Agreement, as in effect on the
date of mailing, without charge promptly after receipt of a
written request therefor. Under certain circumstances set forth in
the Rights Agreement, Rights issued to, or held by, any Person who
is, was or becomes an Acquiring Person, an Adverse Person or any
Affiliate or Associate thereof (as such terms are defined in the
Rights Agreement), whether currently held by or on behalf of such
Person or by any subsequent holder, may become null and void.
With respect to such certificates containing the foregoing legend, until the
earlier of (i) the Distribution Date or (ii) the Expiration Date, the Rights
associated with the Common Stock represented by such certificates shall be
evidenced by such certificates alone and registered holders of Common Stock
shall also be the registered holders of the associated Rights, and the transfer
of any of such certificates shall also constitute the transfer of the Rights
associated with the Common Stock represented by such certificates.
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Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof) shall each
be substantially in the form set forth in Exhibit A hereto and may have
such marks of identification or designation and such legends, summaries
or endorsements printed thereon as the Company may deem appropriate 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
hereof, the Rights Certificates, whenever distributed, shall be dated as
of the Record Date and on their face shall entitle the holders thereof to
purchase such number of one one-hundredths of a share of Preferred Stock
as shall be set forth therein at the price set forth therein (such
exercise price per one one-hundredths of a share, the "Purchase Price"),
but the amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof shall be subject to adjustment
as provided herein.
(b) Any Rights Certificate issued pursuant to Section 3(a) or
Section 22 hereof that represents Rights beneficially owned by any Person
known to be: (i) an Acquiring Person, an Adverse Person or any Associate
or Affiliate of an Acquiring Person or an Adverse Person; (ii) a
transferee of an Acquiring Person or an Adverse Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring
Person or Adverse Person becomes such; or (iii) a transferee of an
Acquiring Person or an Adverse Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person or Adverse Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person or Adverse Person (or from any such Associate or
Affiliate) to holders of equity interests in such Acquiring Person or
Adverse Person (or in any such Associate or Affiliate) or to any Person
with whom such Acquiring Person or Adverse Person (or any such Associate
or Affiliate) has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer which the Board of
Directors of the Company has determined is part of a plan, arrangement or
understanding which has as a primary purpose or effect avoidance of
Section 7(e) hereof, and any Rights Certificate issued pursuant to
Section 6 or Section 11 hereof upon transfer, exchange, replacement or
adjustment of any other Rights Certificate referred to in this sentence,
shall when issued contain (to the extent feasible
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in the circumstances) the following legend, modified as applicable to
apply to such Person:
The Rights represented by this Rights Certificate are or were
beneficially owned by a Person who was or became an [Acquiring]
[Adverse] Person or an Affiliate or Associate of an [Acquiring]
[Adverse] Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the Rights
represented hereby may become null and void in the circumstances
specified in Section 7(e) of such Agreement.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Company by its Chairman of the Board, its President or any Vice
President, either manually or by facsimile signature, and shall have
affixed thereto the Company's seal or a facsimile thereof which shall be
attested by the Secretary or an Assistant Secretary of the Company,
either manually or by facsimile signature. The Rights Certificates shall
be countersigned by the Rights Agent, manually or by facsimile signature,
and shall not be valid for any purpose unless so countersigned. In case
any officer of the Company who shall have signed any of the Rights
Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the
Company, such Rights Certificates, nevertheless, may be countersigned by
the Rights Agent and issued and delivered by the Company with the same
force and effect as though the person who signed such Rights Certificates
had not ceased to be such officer of the Company; and any Rights
Certificates may be signed on behalf of the Company by any person who, at
the actual date of the execution of such Rights Certificate, shall be a
proper officer of the Company to sign such Rights Certificate, although
at the date of the execution of this Rights Agreement any such person was
not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its office designated as the appropriate place for
surrender of Rights Certificates upon exercise or transfer, books for
registration and transfer of the Rights Certificates issued hereunder.
Such books shall show the names and addresses of the respective holders
of the Rights Certificates, the number of Rights evidenced on its face by
each of
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the Rights Certificates and the certificate number and the date of each
of the Rights Certificates.
Section 6. Transfer, Splitup, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14 hereof, at any time after the close of business on the
Distribution Date, and at or prior to the close of business on the
Expiration Date, any Rights Certificate or Certificates may be
transferred, split up, combined or exchanged for another Rights
Certificate or Certificates, entitling the registered holder to purchase
a like number of one one-hundredths of a share of Preferred Stock (or,
following a Triggering Event, Common Stock, other securities, cash or
other assets, as the case may be) as the Rights Certificate or
Certificates surrendered then entitled such holder (or former holder in
the case of a transfer) to purchase. Any registered holder desiring to
transfer, split up, combine or exchange any Rights Certificate or
Certificates shall make such request in writing delivered to the Rights
Agent, and shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the office of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the
Company shall be obligated to take any action whatsoever with respect to
the transfer of any such surrendered Rights Certificate 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 shall reasonably request.
Thereupon the Rights Agent shall, subject to Section 4(b), Section 7(e)
and Section 14 hereof, countersign and deliver to the Person entitled
thereto a Rights Certificate or 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, splitup, combination or exchange of Rights
Certificates.
(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 reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company will
execute and deliver a new Rights Certificate of like tenor to the Rights
Agent for countersignature and
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delivery to the registered owner in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
(a) Subject to Section 7(e) hereof, the registered holder of any
Rights Certificate may exercise the Rights evidenced thereby (except as
otherwise provided herein including, without limitation, the restrictions
on exercisability set forth in Section 9(c), Section 11(a)(iii) and
Section 23(a) hereof) in whole or in part at any time after the
Distribution Date upon surrender of the Rights Certificate, with the form
of election to purchase and the 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 aggregate
Purchase Price with respect to the total number of one one-hundredths of
a share of Preferred Stock (or other securities, cash or other assets, as
the case may be) as to which such surrendered Rights are then
exercisable, at or prior to the earlier of (i) the Final Expiration Date,
or (ii) the time at which the Rights are redeemed as provided in Section
23 hereof (the earlier of (i) and (ii) being herein referred to as the
"Expiration Date").
(b) The Purchase Price for each one-hundredths of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be
$[ ] and shall be subject to adjustment from time to time as provided in
Sections 11 and 13(a) hereof and shall be payable in accordance with
paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing exercisable
Rights, with the form of election to purchase and the certificate duly
executed, accompanied by payment, with respect to each Right so
exercised, of the Purchase Price per one one-hundredths of a share of
Preferred Stock (or other shares, securities, cash or other assets, as
the case may be) to be purchased as set forth below and an amount equal
to any applicable transfer tax, the Rights Agent shall, subject to
Section 20(k) hereof thereupon promptly (i)(A) requisition from any
transfer agent of the shares of Preferred Stock (or make available, if
the Rights Agent is the transfer agent for such shares) certificates for
the total number of one one-hundredths of a share of Preferred Stock to
be purchased and the Company hereby irrevocably authorizes its transfer
agent to comply with all such requests, or (B) if the Company shall have
elected to deposit the total number of shares of Preferred Stock issuable
upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing
such number of one one-hundredths of a
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share of Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by such
receipts shall be deposited by the transfer agent with the depositary
agent) and the Company will direct the depositary agent to comply with
such request, (ii) requisition from the Company the amount of cash, if
any, to be paid in lieu of fractional shares in accordance with Section
14 hereof, (iii) after receipt of such certificates or depositary
receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the Purchase
Price (as such amount may be reduced pursuant to Section 11(a)(iii)
hereof) may be made in cash or by certified bank check or money order
payable to the order of the Company. In the event that the Company is
obligated to issue other securities (including Common Stock) of the
Company, pay cash and/or distribute other property pursuant to Section
11(a) hereof, the Company will make all arrangements necessary so that
such other securities, cash and/or other property are available for
distribution by or on behalf of the Rights Agent, if and when
appropriate.
(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 and delivered to, or upon
the order of, the registered holder of such Rights Certificate,
registered in such name or names as may be designated by such holder,
subject to the provisions of Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the first occurrence of a Section 11(a)(ii) Event, any
Rights beneficially owned by (i) an Acquiring Person, an Adverse Person
or an Associate or Affiliate of an Acquiring Person or an Adverse Person,
(ii) a transferee of an Acquiring Person or an Adverse Person (or of any
such Associate or Affiliate) who becomes a transferee after the Acquiring
Person or Adverse Person becomes such, or (iii) a transferee of an
Acquiring Person or an Adverse Person (or of any such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the
Acquiring Person or Adverse Person becoming such and receives such Rights
pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person or Adverse Person (or from any such Associate or
Affiliate) to holders of equity interests in such Acquiring Person or
Adverse Person (or in any such Associate or Affiliate) or to any Person
with whom the Acquiring Person or Adverse Person (or any such Associate
or Affiliate) has any continuing
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agreement, arrangement or understanding regarding the transferred Rights
or (B) a transfer which the Board of Directors of the Company has
determined (whether before or after such transfer) is part of a plan,
arrangement or understanding which has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any
further action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any provision of
this Agreement or otherwise. The Company shall use all reasonable efforts
to insure that the provisions of this Section 7(e) and Section 4(b)
hereof are complied with, but shall have no liability to any holder of
Rights Certificates or other Person as a result of its failure to make
any determinations with respect to an Acquiring Person or Adverse Person
or any of their respective 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) completed and signed the certificate contained in
the form of election to purchase set forth on the reverse side of the
Rights Certificate surrendered for such exercise, and (ii) provided such
additional evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the Company or
the Rights Agent shall reasonably request.
Section 8. Cancellation and Destruction of Rights Certificates. All
Rights Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or any of its
agents, be delivered to the Rights Agent for cancellation or in canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Rights
Certificates shall be issued in lieu thereof except as expressly permitted by
any of the provisions of this Agreement. The Company shall deliver to the Rights
Agent for cancellation and retirement, and the Rights Agent shall so cancel and
retire, any other Rights Certificate purchased or acquired by the Company
otherwise than upon the exercise thereof. The Rights Agent shall deliver all
cancelled Rights Certificates to the Company, or shall, at the written request
of the Company, destroy such cancelled Rights Certificates, and in such case
shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause to be
reserved and kept available out of its authorized and unissued shares of
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Preferred Stock (and, following the occurrence of a Triggering Event, out
of its authorized and unissued shares of Common Stock and/or other
securities or out of its authorized and issued shares held in its
treasury), the number of shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities)
that, as provided in this Agreement, including Section 11(a)(iii) hereof,
will be sufficient to permit the exercise in full of all outstanding
Rights.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other securities)
issuable and deliverable upon the exercise of the Rights may be listed on
any national securities exchange, the Company shall use its best efforts
to cause, from and after such time as the Rights become exercisable, all
shares reserved for such issuance to be listed on such exchange upon
official notice of issuance upon such exercise.
(c) The Company shall use its best efforts to (i) file, as soon as
practicable following the earliest date after the first occurrence of a
Section 11(a)(ii) Event on which the consideration to be delivered by the
Company upon exercise of the Rights has been determined in accordance
with Section 11(a)(iii) hereof, 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) cause such
registration statement to become effective as soon as practicable after
such filing, and (iii) cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements of the
Act) until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the 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, for a
period of time not to exceed ninety (90) days after the date set forth in
clause (i) of the first sentence of this Section 9(c), the exercisability
of the Rights in order to prepare and file such registration statement
and permit it to become effective. 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. 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.
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(d) The Company covenants and agrees that it will take all such
action as may be necessary to ensure that all one one-hundredths of a
share of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) delivered upon exercise of
Rights shall, at the time of delivery of the certificates for such shares
(subject to payment of the Purchase Price), be duly and validly
authorized and issued and fully paid and nonassessable.
(e) The Company further covenants and agrees that it will pay when
due and payable any and all federal and state transfer taxes and charges
which may be payable in respect of the issuance or delivery of the Rights
Certificates and of any certificates for a number of one one-hundredths
of a share of Preferred Stock (or Common Stock and/or other securities,
as the case may be) upon the exercise of Rights. The Company shall not,
however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Rights Certificates to a Person
other than, or the issuance or delivery of a number of one one-hundredths
of a share of Preferred Stock (or Common Stock and/or other securities,
as the case may be) in respect of a name other than that of, the
registered holder of the Rights Certificates evidencing Rights
surrendered for exercise or to issue or deliver any certificates for a
number of one one-hundredths of a share of Preferred Stock (or Common
Stock and/or other securities, as the case may be) in a name other than
that of the registered holder upon the exercise of any Rights until such
tax shall have been paid (any such tax 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.
Section 10. Preferred Stock Record Date. Each person in whose name any
certificate for a number of one one-hundredths of a share of Preferred Stock (or
Common Stock and/or other securities, as the case may be) is issued upon the
exercise of Rights shall for all purposes be deemed to have become the holder of
record of such fractional shares of Preferred Stock (or Common Stock and/or
other securities, as the case may be) represented thereby on, and such
certificate shall be dated, the date upon which the Rights Certificate
evidencing such Rights was duly surrendered and payment of the Purchase Price
(and all applicable transfer taxes) was made; provided, however, that if the
date of such surrender and payment is a date upon which the Preferred Stock (or
Common Stock and/or other securities, as the case may be) transfer books of the
Company are closed, such Person shall be deemed to have become the record holder
of such shares (fractional or otherwise) on, and such certificate shall be
dated, the next succeeding Business Day on which the Preferred Stock (or Common
Stock and/or other securities, as the case may be) transfer books of the Company
are open. Prior to the exercise of the Rights
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evidenced thereby, the holder of a Rights Certificate, as such, shall not be
entitled to any rights of a stockholder of the Company with respect to shares
for which the Rights shall be exercisable, including, without limitation, the
right to vote, to receive dividends or other distributions or to exercise any
preemptive rights, and shall not be entitled to receive any notice of any
proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. The Purchase Price, the number and kind of shares covered by
each Right and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a)(i) In the event the Company shall at any time after the date
of this Agreement (A) declare a dividend on the Preferred Stock payable
in shares of Preferred Stock, (B) subdivide the outstanding Preferred
Stock, (C) combine the outstanding Preferred Stock into a smaller number
of shares, or (D) issue any shares of its capital stock in a
reclassification of the Preferred Stock (including any such
reclassification in connection with a consolidation, statutory share
exchange or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in this Section 11(a) and
Section 7(e) hereof, the Purchase Price in effect at the time of the
record date for such dividend or of the effective date of such
subdivision, combination or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as the case may be, issuable
on such date, shall be proportionately adjusted so that the holder of any
Right exercised after such time shall be entitled to receive, upon
payment of the Purchase Price then in effect, the aggregate number and
kind of shares of Preferred Stock or capital stock, as the case may be,
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 would have owned upon such exercise and been entitled to receive
by virtue of such dividend, subdivision, combination or reclassification.
If an event occurs which would require an adjustment under both this
Section 11(a)(i) and Section 11(a)(ii) hereof, the adjustment provided
for in this Section 11(a)(i) shall be in addition to, and shall be made
prior to, any adjustment required pursuant to Section 11(a)(ii) hereof.
(ii) In the event:
(A) any Person (other than the Exempt Investors, the
Company, any Subsidiary of the Company, any employee benefit plan
of the Company or of any Subsidiary of the Company, or
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any Person organized, appointed or established by the Company for
or pursuant to the terms of any such plan), alone or together with
its Affiliates and Associates, shall, at any time after the Rights
Dividend Declaration Date, become the Beneficial Owner of 20% or
more of the shares of Common Stock then outstanding, unless the
event causing the 20% threshold to be crossed is a transaction set
forth in Section 13(a) hereof or
(B) subject to the requirements of this Section 11(a)(ii),
(x) the Board of Directors of the Company shall declare any Person
(other than the Exempt Investors, the Company, any Subsidiary of
the Company, any employee benefit plan of the Company or of any
Subsidiary of the Company, or any Person organized, appointed or
established by the Company for or pursuant to the terms of any
such plan) to be an Adverse Person, upon a determination by the
Board of Directors that such Person, alone or together with its
Affiliates and Associates, has or is likely to, at any time after
the Rights Dividend Declaration Date, become the Beneficial Owner
of 10% or more of the outstanding shares of Common Stock, after
reasonable inquiry and investigation, including consultation with
such persons as such directors shall deem appropriate, that (a)
such Beneficial Ownership by such Person is intended to cause, is
reasonably likely to cause or would cause directly or indirectly,
the Company to change its strategic direction under circumstances
where the Board of Directors believes that such change is not in
the best interests of the Company and its stockholders, employees,
customers, suppliers or other constituencies of the Company and
its Subsidiaries, (b) such Beneficial Ownership by such Person is
intended to cause, is reasonably likely to cause or would cause
pressure on the Company to take action or enter into a transaction
or series of transactions, including by causing a transaction with
such Person or another Person which would provide such Person with
short-term financial gain under circumstances where the Board of
Directors
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determines that the best long-term interests of the Company and
its stockholders, but for the actions and possible actions of such
Person, would not be served by taking such action or entering into
such transactions or series of transactions at that time or (c)
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, or (d) such Beneficial
Ownership otherwise is determined to be not in the best interests
of the Company or its stockholders, employees, customers,
suppliers, or other constituents of the Company or its
Subsidiaries, and (y) such Person has become the Beneficial Owner
of 10% or more of the outstanding shares of Common Stock,
then, promptly following the first occurrence of a Section 11(a)(ii) Event,
proper provision shall be made so that each holder of a Right (except as
provided below and in Section 7(e) hereof) shall thereafter have the right to
receive, upon exercise thereof at the then-current Purchase Price in accordance
with the terms of this Agreement, in lieu of a number of one one-hundredths of a
share of Preferred Stock, such number of shares of Common Stock of the Company
as shall equal the result obtained by (x) multiplying the then-current Purchase
Price by the then-number of one one-hundredths of a share of Preferred Stock for
which a Right would have been exercisable immediately prior to the first
occurrence of a Section 11(a)(ii) Event assuming the Distribution Date had
already occurred, and (y) dividing that product (which, following such first
occurrence, shall thereafter be referred to as the "Purchase Price" for each
Right and for all purposes of this Agreement) by 50% of the current market price
(determined pursuant to Section 11(d) hereof) per share of Common Stock on the
date of such first occurrence (such number of shares, the "Adjustment Shares").
Notwithstanding the provisions of Section 11(a)(ii)(B) hereof, the Board of
Directors of the Company may not declare a Person to be an Adverse Person if,
prior to the time that such Person acquired 10% or more of the shares of Common
Stock then outstanding, such Person provided to the Board of Directors in
writing a statement of such Person's purpose and intentions in connection with
the proposed acquisition of Common Stock, together with any other information
reasonably requested of such Person by the Board of Directors, and the Board of
Directors, based on such statement and reasonable inquiry and investigation,
including consultation with such Persons as such directors shall deem
appropriate, determines to notify and
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notifies such Person in writing that it will not declare such Person to be an
Adverse Person; provided, however, that the Board of Directors may expressly
condition in any manner a determination not to declare a Person an Adverse
Person on such conditions as the Board of Directors may select, including,
without limitation, such Person's not acquiring more than a specified amount of
Common Stock and/or on such Person's not taking actions inconsistent with the
purposes and intentions disclosed by such Person in the statement provided to
the Board of Directors. In the event that the Board of Directors should at any
time determine, upon reasonable inquiry and investigation, including
consultation with such Persons as such directors shall deem appropriate, that
such Person has not met or complied with any condition specified by the Board of
Directors pursuant to the preceding sentence, the Board of Directors may at any
time thereafter declare such Person to be an Adverse Person pursuant to the
provisions of this Section 11(a)(ii).
(iii) In the event that the number of shares of Common
Stock which are authorized by the Company's amended and restated 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 Purchase Price (such excess, the "Spread"), and (B) with
respect to each Right, make adequate provision to substitute for the Adjustment
Shares, upon the exercise of a Right and payment of the applicable Purchase
Price, (1) cash, (2) a reduction in the Purchase Price, (3) Common Stock or
other equity securities of the Company (including, without limitation, shares,
or units of shares, of preferred stock which the Board of Directors of the
Company has deemed to have substantially the same value as shares of Common
Stock (such shares of preferred 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 (less the amount
of any reduction in the Purchase Price), where such aggregate value has been
determined by the Board of Directors of the Company based upon the advice of one
or more investment or financial advisors selected by the Board of Directors of
the Company; provided, however, if the Company shall not have made adequate
provision to deliver value pursuant to clause (B) above within thirty (30) days
following the later of (x) the first occurrence of a Section 11(a)(ii) Event and
(y) the date on which the Company's right of redemption pursuant to Section
23(a) expires (the later of (x) and (y) being referred to herein as the "Section
11(a)(ii) Trigger Date"), then the Company shall be obligated to deliver, upon
the surrender for exercise of a Right and without requiring payment of the
Purchase Price, shares of Common Stock (to the extent available) and then, if
necessary, cash, which shares and/or cash have an aggregate value equal to the
Spread. If the Board of Directors of the Company shall determine in good faith
that it is likely that
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sufficient additional shares of Common Stock could be authorized for issuance
upon exercise in full of the Rights, the thirty (30) day period set forth above
may be extended to the extent necessary, but not more than ninety (90) days
after the Section 11(a)(ii) Trigger Date, in order that the Company may seek
stockholder approval for the authorization of such additional shares (such
period, as it may be extended, the "Substitution Period"). To the extent that
the Company determines that some action need be taken pursuant to the first
and/or second sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights, and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares 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. For purposes of this Section 11(a)(iii), the
value of the Common Stock shall be the current market price (as determined
pursuant to Section 11(d) hereof) per share of the Common Stock on the Section
11(a)(ii) Trigger Date and the value of any "common stock equivalent" shall be
deemed to have the same value as the Common Stock on such date.
(iv) In lieu of issuing shares of Common Stock in
accordance with subparagraph (ii) of this Section 11(a), the Company may with
respect to each Right, if a majority of members of the Board of Directors
determine that such action is in the best interests of the Company and not
contrary to the interests of the holders of Rights, make adequate provision to
substitute for the Adjustment Shares, (x) upon the surrender for exercise of a
Right and payment of the applicable Purchase Price, (1) cash, (2) a reduction in
Purchase Price, (3) Common Stock, or other equity securities of the Company
(including without limitation 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 of Directors of the Company based upon the advice of one
or more investment or financial advisers selected by the Board of Directors of
the Company or (y) upon the surrender for exercise of a Right and without
requiring payment of the Purchase Price, (1) cash, (2) Common Stock or other
equity securities of the Company (including, without limitation, common stock
equivalents), (3) debt securities of the Company, (4) other assets or (5) any
combination of the foregoing, having an aggregate value equal to the Spread
where such aggregate value has been determined by the Board of Directors of the
Company based upon the advice of one or more investment or financial advisors
selected by the Board of Directors of the Company.
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(b) In case the Company shall fix a record date for the issuance
of rights, options or warrants to all holders of Preferred Stock
entitling them to subscribe for or purchase (for a period expiring within
forty-five (45) calendar days after such record date) Preferred Stock (or
shares having the same rights, privileges and preferences as the shares
of Preferred Stock ("equivalent preferred stock")) or securities
convertible into Preferred Stock or equivalent preferred stock at a price
per share of Preferred Stock or per share of equivalent preferred stock
(or having a conversion price per share, if a security convertible into
Preferred Stock or equivalent preferred stock) less than the current
market price (as determined pursuant to Section 11(d) hereof) per share
of Preferred Stock on such record date, the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the number of shares of
Preferred Stock outstanding on such record date, plus the number of
shares of Preferred Stock which the aggregate offering price of the total
number of shares of Preferred Stock and/or equivalent preferred 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
market price, and the denominator of which shall be the number of shares
of Preferred Stock outstanding on such record date, plus the number of
additional shares of Preferred Stock and/or equivalent preferred stock to
be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). In case such
subscription price may be paid by delivery of consideration part or all
of which may be in a form other than cash, the value of such
consideration shall be as determined in good faith by the Board of
Directors of the Company, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Shares of Preferred Stock owned by
or held for the account of the Company shall not be deemed outstanding
for the purpose of any such computation. Such adjustment shall be made
successively whenever such a record date is fixed, and in the event that
such rights or warrants are not so issued, the Purchase Price shall be
adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Company shall fix a record date for a distribution
to all holders of Preferred Stock (including any such distribution made
in connection with a consolidation, statutory share exchange or merger in
which the Company is the continuing corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend out of
the earnings or retained earnings of the Company), assets (other than a
dividend payable in Preferred Stock, but including any dividend payable
in stock
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other than Preferred Stock) or subscription rights or warrants (excluding
those referred to in Section 11(b) hereof), the Purchase Price to be in
effect after such record date shall be determined by multiplying the
Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current market price (as
determined pursuant to Section 11(d) hereof) per share of Preferred Stock
on such record date, less the fair market value (as determined in good
faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent) of the portion
of the cash, assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to a share of
Preferred Stock and the denominator of which shall be such current market
price (as determined pursuant to Section 11(d) hereof) per 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 Purchase Price shall be adjusted to be the Purchase
Price which would have been in effect if such record date had not been
fixed.
(d)(i) For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) and Section 11(a)(iv)
hereof, the "current market price" per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices per share
of such Common Stock for the thirty (30) consecutive Trading Days (as
such term is hereinafter defined) immediately prior to such date, and for
purposes of computations made pursuant to Section 11(a)(iii) and Section
11(a)(iv) hereof, the "current market price" per share of Common Stock on
any date shall be deemed to be the average of the daily closing prices
per share of such Common Stock for the ten (10) consecutive Trading Days
immediately following such date; provided, however, that in the event
that the current market price per share of the Common Stock is determined
during a period following the announcement by the issuer of such Common
Stock of (A) a dividend or distribution on such Common Stock payable in
shares of such Common Stock or securities convertible into shares of such
Common Stock (other than the Rights), or (B) any subdivision, combination
or reclassification of such Common Stock, and prior to the expiration of
the requisite thirty (30) Trading Day or ten (10) Trading Day period, as
set forth above, after the ex-dividend date for such dividend or
distribution, or the record date for such subdivision, combination or
reclassification, then, and in each such case, the "current market price"
shall be properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price, regular way, or,
in case no such sale takes place on such day, the average of the closing
bid and asked prices, regular way, in either case as reported in the
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principal consolidated transaction reporting system with respect to
securities listed or admitted to trading on the New York Stock Exchange
or, if the shares of Common Stock are not listed or admitted to trading
on the New York Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the
principal national securities exchange on which the shares of Common
Stock are listed or admitted to trading or, if the shares of Common Stock
are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the
high bid and low asked prices in the over-the-counter market, as reported
by the National Association of Securities Dealers, Inc. Automated
Quotation System ("NASDAQ") or such other system then in use, or, if on
any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Common
Stock selected by the Board of Directors of the Company. If on any such
date no market maker is making a market in the Common Stock, the fair
value of such shares on such date as determined in good faith by the
Board of Directors of the Company shall be used. The term "Trading Day"
shall mean a day on which the principal national securities exchange on
which the shares of Common Stock are listed or admitted to trading is
open for the transaction of business or, if the shares of Common Stock
are not listed or admitted to trading on any national securities
exchange, a Business Day. If the Common Stock is not publicly held or not
so listed or traded, "current market price" per share shall mean the fair
value per share as determined in good faith by the Board of Directors of
the Company, whose determination shall be described in a statement filed
with the Rights Agent and shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
"current market price" per share of Preferred Stock shall be determined in the
same manner as set forth above for the Common Stock in clause (i) of this
Section 11(d) (other than the last sentence thereof). If the current market
price per share of Preferred Stock cannot be determined in the manner provided
above or if the Preferred Stock is not publicly held or listed or traded in a
manner described in clause (i) of this Section 11(d), the "current market price"
per share of Preferred Stock shall be conclusively deemed to be an amount equal
to 100 (as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common Stock
occurring after the date of this Agreement) multiplied by the current market
price per share of the Common Stock. If neither the Common Stock nor the
Preferred Stock is publicly held or so listed or traded, "current market price"
per share of the Preferred Stock shall mean the fair value per share as
determined in good faith by the Board of Directors of the
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Company, whose determination shall be described in a statement filed with the
Rights Agent and shall be conclusive for all purposes. For all purposes of this
Agreement, the "current market price" of one one-hundredth of a share of
Preferred Stock shall be equal to the "current market price" of one share of
Preferred Stock divided by 100.
(e) Anything herein to the contrary notwithstanding, no adjustment
in the Purchase Price shall be required unless such adjustment would
require an increase or decrease of at least one percent (1%) in the
Purchase Price; provided, however, that any adjustments which by reason
of this Section 11(e) are not required to be made shall be carried
forward and taken into account in any subsequent adjustment. All
calculations under this Section 11 shall be made to the nearest cent or
to the nearest ten-thousandth of a share of Common Stock or other share
or one-millionth of a share of Preferred Stock, as the case may be.
Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of
(i) three (3) years from the date of the transaction which mandates such
adjustment, or (ii) the Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital stock
other than Preferred Stock, thereafter the number of such other shares so
receivable upon exercise of any Right and the Purchase Price thereof
shall be subject to adjustment from time to time in a manner and on terms
as nearly equivalent as practicable to the provisions with respect to the
Preferred Stock contained in Xxxxxxxx 00(x), (x), (x), (x), (x), (x),
(x), (x) and (l), and the provisions of Sections 7, 9, 10, 13 and 14
hereof with respect to the Preferred Stock shall apply on like terms to
any such other shares.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right
to purchase, at the adjusted Purchase Price, the number of one
one-hundredths of a share of Preferred Stock purchasable from time to
time hereunder upon exercise of the Rights, all subject to further
adjustment as provided herein.
(h) Unless the Company shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase Price as
a result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase
Price, that number of one one-hundredths of a share of Preferred Stock
(calculated to the nearest one-millionth) obtained by (i) multiplying (x)
the number of one
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one-hundredths of a share covered by a Right immediately prior to this
adjustment, by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price, and (ii) dividing the product so
obtained by the Purchase Price in effect immediately after such
adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any adjustment
of the Purchase Price to adjust the number of Rights, in lieu of any
adjustment in the number of one one-hundredths of a share of Preferred
Stock purchasable upon the exercise of a Right. Each of the Rights
outstanding after the adjustment in the number of Rights shall be
exercisable for the number of one one-hundredths of a share of Preferred
Stock for which a Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the
number of Rights shall become that number of Rights (calculated to the
nearest one tenthousandth) obtained by dividing the Purchase Price in
effect immediately prior to adjustment of the Purchase Price by the
Purchase Price in effect immediately after adjustment of the Purchase
Price. The Company shall make a public announcement of its election to
adjust the number of Rights, indicating the record date for the
adjustment, and, if known at the time, the amount of the adjustment to be
made. This record date may be the date on which the Purchase Price is
adjusted or any day thereafter, but, if the Rights Certificates have been
issued, shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this Section 11(i), the
Company shall, as promptly as practicable, cause to be distributed to
holders of record of Rights Certificates on such record date Rights
Certificates evidencing, subject to Section 14 hereof, the additional
Rights to which such holders shall be entitled as a result of such
adjustment, or, at the option of the Company, shall cause to be
distributed to such holders of record in substitution and replacement for
the Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the Company, new
Rights Certificates evidencing all the Rights to which such holders shall
be entitled after such adjustment. Rights Certificates so to be
distributed shall be issued, executed and countersigned in the manner
provided for herein (and may bear, at the option of the Company, the
adjusted Purchase Price) and shall be registered in the names of the
holders of record of Rights Certificates on the record date specified in
the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a share of Preferred Stock
issuable upon the exercise of the Rights, the Rights Certificates
theretofore and
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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
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 be made effective as of a record date
for a specified event, the Company may elect to defer until the
occurrence of such event the issuance to the holder of any Right
exercised after such record date of the number of one one-hundredths of a
share of Preferred Stock and other capital stock or securities of the
Company, if any, issuable upon such exercise over and above the number of
one one-hundredths of a share of Preferred Stock and other capital stock
or securities of the Company, if any, issuable upon such exercise on the
basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or
other appropriate instrument evidencing such holder's right to receive
such additional shares (fractional or otherwise) or securities 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 of the Company shall determine to be advisable in
order that any (i) consolidation or subdivision of the Preferred Stock,
(ii) issuance wholly for cash of any shares of Preferred Stock at less
than the current market price, (iii) issuance wholly for cash of shares
of Preferred Stock or securities which by their terms are convertible
into or exchangeable for shares of Preferred Stock, (iv) stock dividends
or (v) issuance of rights, options or warrants referred to in this
Section 11, hereafter made by the Company to holders of its Preferred
Stock shall not be taxable to such stockholders.
(m) The Company covenants and agrees that it shall not, at any
time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(n) hereof), (ii) merge with or into or enter into a
statutory share exchange with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(n)
hereof), or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related transactions,
assets or earning power aggregating more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to
any other Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which
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complies with Section 11(n) hereof), if (x) at the time of or immediately
after such consolidation, merger, statutory share exchange, sale or
transfer there are any rights, warrants or other instruments or
securities outstanding or agreements in effect which would substantially
diminish or otherwise eliminate the benefits intended to be afforded by
the Rights or (y) prior to, simultaneously with or immediately after such
consolidation, merger, sale or transfer, the stockholders of the Person
who constitutes, or would constitute, the "Principal Party" for purposes
of Section 13(a) hereof shall have received a distribution of Rights
previously owned by such Person or any of its Affiliates and Associates.
(n) The Company covenants and agrees that, after the Distribution
Date, it will not, except as permitted by Section 23 or Section 26
hereof, take (or permit any Subsidiary to take) any action if at the time
such action is taken it is reasonably foreseeable that such action will
diminish substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(o) Anything in this Agreement to the contrary notwithstanding, in
the event that the Company shall at any time on or after the Rights
Dividend Declaration Date and prior to the Distribution Date (i) declare
a dividend on the outstanding shares of Common Stock payable in shares of
Common Stock, (ii) subdivide the outstanding shares of Common Stock, or
(iii) combine the outstanding shares of Common Stock into a smaller
number of shares, the number of Rights associated with each share of
Common Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted so that
the number of Rights thereafter associated with each share of Common
Stock following any such event shall equal the result obtained by
multiplying the number of Rights associated with each share of Common
Stock immediately prior to such event by a fraction the numerator of
which shall be the total number of shares of Common Stock outstanding
immediately prior to the occurrence of the event and the denominator of
which shall be the total number of shares of Common Stock outstanding
immediately following the occurrence of such event.
(p) Before taking any action that would cause an adjustment
reducing the Purchase Price below the then par value, if any, of the
Common Stock issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be
necessary in order that the Company may validly and legally issue fully
paid and nonassessable shares of Common Stock at such adjusted Purchase
Price.
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Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 and Section 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate, and (c) mail a
brief summary thereof to each holder of a Rights Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing shares of
Common Stock) in accordance with Section 25 hereof. The Rights Agent shall be
fully protected in relying on any such certificate and on any adjustment therein
contained and shall not be deemed to have knowledge of such adjustment unless
and until it shall have received such certificate.
Section 13. Consolidation, Statutory Share Exchange, Merger or Sale or
Transfer of Assets or Earning Power.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Company shall consolidate with, enter
into a statutory share exchange or merge with and into, any other Person
(other than a Subsidiary of the Company in a transaction which complies
with Section 11(n) hereof), and the Company shall not be the continuing
or surviving corporation of such consolidation, statutory share exchange
or merger, (y) any Person (other than a Subsidiary of the Company in a
transaction which complies with Section 11(n) hereof) shall consolidate
with, enter into a statutory share exchange with, or merge with or into,
the Company, and the Company shall be the continuing or surviving
corporation of such consolidation, statutory share exchange or merger
and, in connection with such consolidation, statutory share exchange or
merger, all or part of the outstanding shares of Common Stock shall be
changed into or exchanged for stock or other securities of any other
Person or cash or any other property, or (z) the Company shall sell or
otherwise transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons (other than the Company or any Subsidiary
of the Company in one or more transactions each of which complies with
Section 11(n) hereof), then, and in each such case, proper provision
shall be made so that: (i) each holder of a Right, except holders
described in Section 7(e) hereof, shall thereafter have the right to
receive, upon the exercise thereof at the then-current Purchase Price in
accordance with the terms of this Agreement, such number of validly
authorized and issued, fully paid, nonassessable and freely tradeable
shares of Common Stock of the Principal Party (as such term is
hereinafter
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defined), not subject to any liens, encumbrances, rights of first refusal
or other adverse claims, as shall be equal to the result obtained by (1)
multiplying the then-current Purchase Price by the number of one
one-hundredths of a share of Preferred Stock for which a Right is
exercisable immediately prior to the first occurrence of a Section 13
Event (or, if a Section 11(a)(ii) Event has occurred prior to the first
occurrence of a Section 13 Event, multiplying the number of such one
one-hundredths of a share of Preferred Stock for which a Right was
exercisable immediately prior to the first occurrence of a Section
11(a)(ii) Event by the Purchase Price in effect immediately prior to such
first occurrence), and dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as the "Purchase
Price" for each Right and for all purposes of this Agreement) by (2) 50%
of the current market price (determined pursuant to Section 11(d)(i)
hereof) per share of the Common Stock of such Principal Party on the date
of consummation of such Section 13 Event; (ii) such Principal Party shall
thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this
Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the
provisions of Section 11 hereof shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; (iv) such Principal
Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of shares of its Common Stock) in
connection with the consummation of any such transaction as may be
necessary to assure that the provisions hereof shall thereafter be
applicable, as nearly as reasonably may be, in relation to its shares of
Common Stock thereafter deliverable upon the exercise of the Rights; and
(v) the provisions of Section 11(a)(ii) hereof shall be of no effect
following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(i) in the case of any transaction described in clause (x)
or (y) of the first sentence of Section 13(a), the Person that is
the issuer of any securities into which shares of Common Stock of
the Company are converted in such merger, statutory share exchange
or consolidation, and if no securities are so issued, the Person
that is the other party to such merger, statutory share exchange
or consolidation; and
(ii) in the case of any transaction described in clause (z)
of the first sentence of Section 13(a), the Person that is the
party
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receiving the greatest portion of the assets or earning power
transferred pursuant to such transaction or transactions;
provided, however, that in any such case, (1) if the Common Stock of such Person
is not at such time and has not been continuously over the preceding twelve (12)
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Stock of which is
and has been so registered, "Principal Party" shall refer to such other Person;
and (2) in case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Stocks of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Stock having the greatest aggregate market value.
(c) The Company shall not consummate any such consolidation,
statutory share exchange, merger, sale or transfer unless the Principal
Party shall have a sufficient number of authorized shares of its Common
Stock which have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and such Principal Party shall have
executed and delivered to the Rights Agent a supplemental agreement
providing for the terms set forth in paragraphs (a) and (b) of this
Section 13 and further providing that, as soon as practicable after the
date of any consolidation, statutory share exchange, merger, sale or
transfer mentioned in paragraph (a) of this Section 13, the Principal
Party will:
(i) prepare and file a registration statement under the
Act, with respect to the Rights and the securities purchasable
upon exercise of the Rights on an appropriate form, and will use
its best efforts to cause such registration statement to (A)
become effective as soon as practicable after such filing and (B)
remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Expiration Date; and
(ii) deliver to holders of the Rights historical financial
statements for the Principal Party and each of its Affiliates
which comply in all respects with the requirements for
registration on Form 10 under the Exchange Act.
The provisions of this Section 13 shall similarly apply to successive mergers,
statutory share exchanges or consolidations or sales or other transfers. In the
event that a Section 13 Event shall occur at any time after the occurrence of a
Section 11(a)(ii) Event, the Rights which have not theretofore been exercised
shall thereafter become exercisable in the manner described in Section 13(a).
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Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in Section
11(o) hereof, or to distribute Rights Certificates which evidence
fractional Rights. In lieu of such fractional Rights, there may be paid
to the registered holders of the Rights Certificates with regard to which
such fractional Rights would otherwise be issuable, an amount in cash
equal to the same fraction of the current market value of a whole Right.
For purposes of this Section 14(a), the current market value of a whole
Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have
been otherwise issuable. The closing price of the Rights for any day
shall be the last sale price, regular way, or in case no such sale takes
place on such day, the average of the closing bid and asked prices,
regular way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the Rights are
not listed or admitted to trading on the New York Stock Exchange, as
reported in the principal consolidated transaction reporting system with
respect to securities listed on the principal national securities
exchange on which the Rights are listed or admitted to trading, or, if
the Rights are not listed or admitted to trading, on any national
securities exchange, the last quoted price or if not so quoted, the
average of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use or, if on
any such date the Rights are not quoted by any such organization, the
average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Rights selected by the
Board of Directors of the Company. If on any such date no such market
maker is making a market in the Rights, the fair value of the Rights on
such date as determined in good faith by the Board of Directors of the
Company shall be used.
(b) The Company shall not be required to issue fractions of 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-hundredths 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 may pay to the
registered holders of Rights Certificates at the time such Rights are
exercised as herein provided an amount in cash equal to the same fraction
of the current market value of one one-hundredths of a share of Preferred
Stock. For purposes of this
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Section 14(b), the current market value of one one-hundredths of a share
of Preferred Stock shall be one one-hundredths 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 Triggering Event, the Company
shall not be required to issue fractions of shares of Common Stock upon
exercise of the Rights or to distribute certificates which evidence
fractional shares of Common Stock. In lieu of fractional shares of Common
Stock, the Company may pay to the registered holders of Rights
Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of
one (1) 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 Rights
expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as permitted by this
Section 14.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, other than rights of action vested in the Rights Agent pursuant to
Section 18 hereof, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered holders of the
Common Stock); and any registered holder of any Rights Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company to enforce, or otherwise act in respect of, his right to
exercise the Rights evidenced by such Rights Certificate in the manner provided
in such Rights Certificate and in this Agreement. Without limiting the foregoing
or any remedies available to the holders of Rights, it is specifically
acknowledged that the holders of Rights would not have an adequate remedy at law
for any breach of this Agreement and shall be entitled to specific performance
of the obligations hereunder and injunctive relief against actual or threatened
violations of the obligations hereunder of any Person subject to this Agreement.
Section 16. Agreement of Rights Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
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(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the principal office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a proper
instrument of transfer and with the appropriate forms and certificates
fully executed;
(c) subject to Section 6(a) and Section 7(f) hereof, the Company
and the Rights Agent may deem and treat the person in whose name a Rights
Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the
Rights evidenced thereby (notwithstanding any notations of ownership or
writing on the Rights Certificates or the associated Common Stock
certificate made by anyone other than the Company or the Rights Agent)
for all purposes whatsoever, and neither the Company nor the Rights
Agent, subject to the last sentence of Section 7(e) hereof, shall be
required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any
holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary
or permanent injunction or other order, decree or ruling issued by a
court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation;
provided, however, the Company must use its best efforts to have any such
order, decree or ruling lifted or otherwise overturned as soon as
possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Rights Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of the number of one
one-hundredths of a share of Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in any Rights
Certificate be construed to confer upon the holder of any Rights Certificate, as
such, any of the rights of a stockholder of the Company or any right to vote for
the election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in Section 24 hereof), or to receive dividends or
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subscription rights, or otherwise, until the Right or Rights evidenced by such
Rights Certificate shall have been exercised in accordance with the provisions
hereof.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to
time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and disbursements and other disbursements incurred in the
administration and execution of this Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify
the Rights Agent for, and to hold it harmless against, any loss,
liability, or expense, incurred without gross negligence, bad faith or
willful misconduct on the part of the Rights Agent, for anything done or
omitted by the Rights Agent in connection with the acceptance and
administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(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 administration of this Agreement in reliance
upon any Rights Certificate or certificate for Common Stock or for other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement, or other paper or document believed by it to be
genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated, or any
corporation resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any
corporation succeeding to the corporate trust or 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, however, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section
21 hereof. In case at the time such successor Rights Agent shall succeed
to the agency created by this Agreement, any of the Rights Certificates
shall have been countersigned but
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not delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such Rights
Certificates so countersigned; and in case at that time any of the Rights
Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name of the
predecessor or 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.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be
full and complete authorization and protection to the Rights Agent as to
any action taken or omitted by it in good faith and in accordance with
such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or
matter (including, without limitation, the identity of any Acquiring
Person or Adverse Person and the determination of "current market price")
be proved or established by the Company prior to taking or suffering any
action hereunder, such fact or matter (unless other evidence in respect
thereof be herein specifically prescribed) may be deemed to be
conclusively proved and established by a certificate signed by the
Chairman of the Board, the President, any Vice President, the Treasurer,
any Assistant Treasurer, the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be
full authorization to the Rights Agent for any action taken or suffered
in good faith by it under the provisions of this Agreement in reliance
upon such certificate.
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(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct; provided, however,
that the Rights Agent shall not be liable for any indirect, punitive,
special or consequential damages.
(d) The Rights Agent shall not be liable for or by reason of any
of the statements of fact or recitals contained in this Agreement or in
the Rights Certificates or be required to verify the same (except as to
its countersignature on such Rights Certificates), but all such
statements and recitals are and shall be deemed to have been made by the
Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery
hereof (except the due execution hereof by the Rights Agent) or in
respect of the validity or execution of any Rights Certificate (except
its countersignature thereof); nor shall it be responsible for any breach
by the Company of any covenant or condition contained in this Agreement
or in any Rights Certificate; nor shall it be responsible for any
adjustment required under the provisions of Section 11 or Section 13
hereof or responsible for the manner, method or amount of any such
adjustment or the ascertaining of the existence of facts that would
require any such adjustment (except with respect to the exercise of
Rights evidenced by Rights Certificates after receipt of the certificate
described in Section 12 hereof setting forth any such adjustment); nor
shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of Common
Stock or Preferred Stock to be issued pursuant to this Agreement or any
Rights Certificate or as to whether any shares of Common Stock or
Preferred Stock will, when so issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as
may reasonably be required by the Rights Agent for the carrying out or
performing by the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from
the Chairman of the Board, the President, any Vice President, the
Secretary, any Assistant Secretary, the Treasurer or any Assistant
Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and it shall not be liable
for any action taken or
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suffered to be taken by it in good faith in accordance with instructions
of any such officer.
(h) Any application by the Rights Agent for written instructions
from the Company may, at the option of the Rights Agent, set forth in
writing any action proposed to be taken or omitted by the Rights Agent
under this Rights Agreement and the date on and/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 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 the
Chairman of the Board, the President, any Vice President, the Secretary,
any Assistant Secretary, the Treasurer or any Assistant Treasurer 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 or omitted.
(i) The Rights Agent and any stockholder, 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 legal entity.
(j) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or
by or through its attorneys or agents, and the Rights Agent shall not be
answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting
from any such act, default, neglect or misconduct; provided, however,
reasonable care was exercised in the selection and continued employment
thereof.
(k) No provision of this Agreement shall require the Rights Agent
to expend or risk its own funds or otherwise incur any financial
liability in the performance of any of its duties hereunder or in the
exercise of its rights if there shall be reasonable grounds for believing
that repayment of such funds or adequate indemnification against such
risk or liability is not reasonably assured to it.
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(l) 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.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and thereby be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Company, and to
each transfer agent of the Common Stock and Preferred Stock, by registered or
certified mail, and to the holders of the Rights Certificates by first-class
mail. The Company may remove the Rights Agent or any successor Rights Agent upon
thirty (30) days' notice in writing, mailed to the Rights Agent or successor
Rights Agent, as the case may be, and to each transfer agent of the Common Stock
and Preferred Stock, by registered or certified mail, and to the holders of the
Rights Certificates by first-class mail. If the Rights Agent shall resign or be
removed or shall otherwise become incapable of acting, the Company shall appoint
a successor to the Rights Agent. If the Company shall fail to make such
appointment within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Rights Certificate (who shall, with such notice, submit his Rights Certificate
for inspection by the Company), then any registered holder of any Rights
Certificate may apply to any court of competent jurisdiction for the appointment
of a new Rights Agent. Any successor Rights Agent, whether appointed by the
Company or by such a court, shall be (a) a corporation or financial institution
organized and doing business under the laws of the United States or of the State
of New York (or of any other state of the United States so long as such
corporation is authorized to do business as a banking institution in the State
of New York), in good standing, and having a principal office in the State of
New York, which is authorized under such laws to exercise corporate trust or
stock transfer powers and is subject to supervision or examination by federal or
state authority and which has at the time of its appointment as Rights Agent a
combined capital and surplus of at least $10,000,000 or (b) an affiliate of a
corporation or financial institution described in clause (a) of this sentence.
After appointment, the successor Rights Agent shall be vested with the same
powers, rights, duties and responsibilities as if it had been originally named
as Rights Agent without further act or deed; but the predecessor Rights Agent
shall deliver, and transfer to the successor Rights Agent any property at the
time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment, the Company shall file notice thereof in writing
with the predecessor Rights Agent and
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each transfer agent of the Common Stock and the Preferred Stock, and mail a
notice thereof in writing to the registered holders of the Rights Certificates.
Failure to give any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the resignation or
removal of the Rights Agent or the appointment of the successor Rights Agent, as
the case may be.
Section 22. Issuance of New Rights Certificates. Notwithstanding any of
the provisions of this Agreement or of the Rights to the contrary, the Company
may, at its option, issue new Rights Certificates evidencing Rights in such form
as may be approved by its Board of Directors to reflect any adjustment or change
in the Purchase Price and the number or kind or class of shares or other
securities or property purchasable under the Rights Certificates made in
accordance with the provisions of this Agreement. In addition, in connection
with the issuance or sale of shares of Common Stock following the Distribution
Date and prior to the redemption or expiration of the Rights, the Company (a)
shall, with respect to shares of Common Stock so issued or sold pursuant to the
exercise of stock options or under any employee plan or arrangement, or upon the
exercise, conversion or exchange of securities hereinafter issued by the
Company, and (b) may, in any other case, if deemed necessary or appropriate by
the Board of Directors of the Company, issue Rights Certificates representing
the appropriate number of Rights in connection with such issuance or sale;
provided, however, that (i) no such Rights Certificate shall be issued if, and
to the extent that, the Company shall be advised by counsel that such issuance
would create a significant risk of material adverse tax consequences to the
Company or the Person to whom such Rights Certificate would be issued, and (ii)
no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
Section 23. Redemption and Termination.
(a)(i) The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (x) the close of business on the
tenth Business Day following the Stock Acquisition Date (or, if the Stock
Acquisition Date shall have occurred prior to the Record Date, the close
of business on the tenth Business Day following the Record Date), or (y)
the Final Expiration Date, redeem all but not less than all the then
outstanding Rights at a redemption price of $0.01 per Right, as such
amount may be appropriately adjusted, as determined by the Board of
Directors, 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"). Notwithstanding the
foregoing, but subject to Section 23(a)(ii) hereof, the Board of
Directors of the Company may not redeem any Rights after the tenth
Business Day following the effective date
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of (a) any declaration that any Person is or will become an Adverse
Person (as provided in Section 11(a)(ii)(B))and, if later, (b) the date
such Person has become the Beneficial Owner of 10% or more of the
outstanding shares of Common Stock.
(ii) If, following the occurrence of a Stock Acquisition
Date and/or following the expiration of the right of redemption hereunder but
prior to any Triggering Event, (x) a Person who is an Acquiring Person shall
have transferred or otherwise disposed of a number of shares of Common Stock in
one transaction or series of transactions, not directly or indirectly involving
the Company or any of its Subsidiaries, which did not result in the occurrence
of a Triggering Event, such that such Person is thereafter a Beneficial Owner of
less than 10% of the outstanding shares of Common Stock, and (y) there are no
other Persons, immediately following the occurrence of the event described in
clause (x), who are Acquiring Persons or Adverse Persons, then the right of
redemption shall be reinstated and thereafter be subject to the provisions of
this Section 23.
(iii) Notwithstanding anything contained in this Agreement
to the contrary, the Rights shall not be exercisable after the first occurrence
of an event described in Section 11(a)(ii) until such time as the Company's
right of redemption hereunder has expired.
(iv) The Company may, at its option, pay the Redemption
Price in cash, shares of Common Stock (based on the "current market price," as
defined in Section 11(d)(i) hereof, of the Common Stock at the time of
redemption) or any other form of consideration deemed appropriate by the Board
of Directors.
(b) Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall
have been filed with the Rights Agent and without any further action and
without any notice, the right to exercise the Rights will terminate and
the only right thereafter of the holders of Rights shall be to receive
the Redemption Price for each Right so held. Promptly after the action of
the Board of Directors ordering the redemption of the Rights, the Company
shall give notice of such redemption to the Rights Agent and the holders
of the then outstanding Rights by mailing such notice to all such holders
at each holder's last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the registry
books of the Transfer Agent for the Common Stock. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of redemption will
state the method by which the payment of the Redemption Price will be
made.
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Section 24. Notice of Certain Events.
(a) In case the Company shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of any class
to the holders of Preferred Stock or to make any other distribution to
the holders of Preferred Stock (other than a regular quarterly cash
dividend out of earnings or retained earnings of the Company), or (ii) to
offer to the holders of Preferred Stock rights or warrants to subscribe
for or to purchase any additional shares of Preferred Stock or shares of
stock of any class or any other securities, rights or options, or (iii)
to effect any reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding shares of
Preferred Stock), or (iv) to effect any consolidation, statutory share
exchange or merger into or with any other Person (other than a Subsidiary
of the Company in a transaction which complies with Section 11(n)
hereof), or to effect any sale or other transfer (or to permit one or
more of its Subsidiaries to effect any sale or other transfer), in one
transaction or a series of related transactions, of more than 50% of the
assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any other Person or Persons (other than the Company and/or any
of its Subsidiaries in one or more transactions each of which complies
with Section 11(n) hereof), or (v) to effect the liquidation, dissolution
or winding up of the Company, then, in each such case, the Company shall
give to each holder of a Rights Certificate, to the extent feasible and
in accordance with Section 25 hereof, a notice of such proposed action,
which shall specify the record date for the purposes of such stock
dividend, distribution of rights or warrants, or the date on which such
reclassification, consolidation, statutory share exchange, merger, sale,
transfer, liquidation, dissolution, or winding up is to take place and
the date of participation therein by the holders of the shares of
Preferred Stock, if any such date is to be fixed, and such notice shall
be so given in the case of any action covered by clause (i) or (ii) above
at least twenty (20) days prior to the record date for determining
holders of the shares of Preferred Stock for purposes of such action, and
in the case of any such other action, at least twenty (20) days prior to
the date of the taking of such proposed action or the date of
participation therein by the holders of the shares of Preferred Stock,
whichever shall be the earlier.
(b) In case any of the events set forth in Section 11(a)(ii)
hereof shall occur, then, in any such case, (i) the Company shall as soon
as practicable thereafter give to each holder of a Rights Certificate, to
the extent feasible and in accordance with Section 25 hereof, a notice of
the occurrence of such event, which shall specify the event and the
consequences of the event to holders of Rights under Section 11(a)(ii)
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hereof, and (ii) all references in the preceding paragraph to Preferred
Stock shall be deemed thereafter to refer to Common Stock and/or, if
appropriate, other securities.
Section 25. Notices. Notices or demands authorized by this Agreement to
be given or made by the Rights Agent or by the holder of any Rights Certificate
to or on the Company shall be sufficiently given or made if delivered by hand,
sent by overnight courier or sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) as
follows:
IMPSAT Fiber Networks, Inc.
Xxxxxxx Xxxxxx 000 (0000)
Xxxxxx Xxxxx, Xxxxxxxxx
Attention: Chief Executive Officer
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
delivered by hand, sent by overnight courier or sent by first-class mail,
postage prepaid, addressed (until another address is filed in writing with the
Company) as follows:
The Bank of New York
Global Share Services
000 Xxxxxxx Xxxxxx
00xx Xxxxx Xxxx
Xxx Xxxx, XX 00000
Attention: Assistant Treasurer
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of any Rights Certificate (or, if
prior to the Distribution Date, to the holder of certificates representing
shares of Common Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as shown on the registry books of the Company.
Section 26. Supplements and Amendments. Prior to the Distribution Date,
the Company and the Rights Agent shall, if the Company so directs, supplement or
amend any provision of this Agreement without the approval of any holders of
certificates representing shares of Common Stock. From and after the
Distribution Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Rights Certificates in order (i) to cure any ambiguity, (ii) to correct or
supplement any provision contained herein which may be defective or inconsistent
with any other
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provisions herein, (iii) to shorten or lengthen any time period hereunder,
including the Final Expiration Date, (iv) to change or supplement the provisions
hereunder in any other manner which the Company may deem necessary or desirable
and which shall not adversely affect the interests of the holders of Rights
Certificates (other than an Acquiring Person, an Adverse Person or an Affiliate
or Associate of any such Person); provided, 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 of such other time period is for the purpose of protecting,
enhancing or clarifying the rights of, and/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, the Rights Agent shall execute such
supplement or amendment. Prior to the Distribution Date, the interests of the
holders of Rights shall be deemed coincident with the interests of the holders
of Common Stock.
Section 27. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 28. Determinations and Actions by the Board of Directors, etc.
(a) For all purposes of this Agreement, any calculation of the number of
shares of Common Stock outstanding at any particular time, including for
purposes of determining the particular percentage of such outstanding shares of
Common Stock of which any Person is the Beneficial Owner, shall be made in
accordance with the last sentence of Rule 13d3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act as in effect on the date hereof. The Board of
Directors of the Company (or, as set forth herein, certain specified members
thereof) shall have the exclusive power and authority to administer this
Agreement and to exercise all rights and powers specifically granted to the
Board of Directors of the Company or to the Company, or as may be necessary or
advisable in the administration of this Agreement, including, without
limitation, the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or advisable for
the administration of this Agreement (including, but not limited to, a
determination to redeem or not redeem the Rights, to declare that a Person is an
Adverse Person or to amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
of Directors of the Company in good faith, shall (x) be final, conclusive and
binding on the Company, the Rights Agent, the holders of the Rights and all
other parties, and (y) not subject the Board to any liability to the holders of
the Rights.
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(b) For purposes of this Agreement, any determination to be made by the
Board of Directors of the Company may be made by a duly constituted committee
thereof if so authorized to act by the Board of Directors pursuant to the
Company's Bylaws, and in such circumstances any reference to the Board of
Directors herein shall be deemed to include a reference to such committee.
Section 29. Benefits of This Agreement. Nothing in this Agreement shall
be construed to give to any Person other than the Company, the Rights Agent and
the registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the Distribution
Date, registered holders of the Common Stock).
Section 30. Severability. If any term, provision, covenant or restriction
of this Agreement is held by a court of competent jurisdiction or other
authority to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall remain in full
force and effect and shall in no way be affected, impaired or invalidated;
provided, however, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board of
Directors of the Company determines in its good faith judgment that severing the
invalid language from this Agreement would adversely affect the purpose or
effect of this Agreement, the right of redemption set forth in Section 23 hereof
shall be reinstated and shall not expire until the close of business on the
tenth Business Day following the date of such determination by the Board of
Directors of the Company.
Section 31. Governing Law. This Agreement, each Right 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 made
and to be performed entirely within such State; provided, however, that the
rights, obligations and duties of the Rights Agent hereunder and under each
Right and each Rights Certificate shall for all purposes be governed by and
construed in accordance with the laws of the State of New York, without
reference to the choice of law doctrine of such State.
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Section 32. Counterparts. This Agreement may be executed in any number of
counterparts and each of such counterparts shall for all purposes be deemed to
be an original, and all such counterparts shall together constitute but one and
the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
Attest: IMPSAT Fiber Networks, Inc.
By By
-------------------------------- -----------------------------
Name: Name:
Title: Title:
Attest:
--------------------------------
By By
-------------------------------- -----------------------------
Name: Name:
Title: Title:
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EXHIBIT A
Form of Rights Certificate]
Certificate No. R- _____ Rights
NOT EXERCISABLE AFTER DECEMBER 31, 2010 OR EARLIER IF REDEEMED BY THE COMPANY,
UNLESS EXTENDED BY THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE
OPTION OF THE COMPANY, AT $0.01 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS
AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN
ACQUIRING PERSON OR AN ADVERSE PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS
AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
[THE RIGHTS REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING [ADVERSE] PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING [ADVERSE] PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE
RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES
SPECIFIED IN SECTION 7(e) OF SUCH AGREEMENT.](1)
Rights Certificate
IMPSAT FIBER NETWORKS, INC.
This certifies that , or registered assigns, is the
registered owner of the number of Rights set forth above, each of which entitles
the owner thereof, subject to the terms, provisions and conditions of the Rights
Agreement, dated as of June [ ], 2000 (the "Rights Agreement"), between IMPSAT
Fiber Networks, Inc., a Delaware corporation (the "Company"), and The Bank of
New York (the "Rights Agent"), to purchase from the Company at any time prior to
5:00 P.M. (Eastern Standard time) on December 31, 2010 at the office or offices
of the Rights Agent designated for such purpose, or its successors as Rights
Agent, one one-hundredths of a fully paid, nonassessable share of Series B
Preferred Stock (the "Preferred Stock") of the Company, at a purchase price of
$[ ] per one one-hundredths of a share (the "Purchase Price"), upon presentation
and surrender of this
------------------------
(1) The portion of the legend in brackets shall be inserted only if applicable,
shall be modified to apply to an Acquiring Person or an Adverse Person, as
applicable, and shall replace the preceding sentence.
53
Rights Certificate with the Form of Election to Purchase and related Certificate
duly executed. The Purchase Price may be paid in cash or by certified bank check
or money order payable to the order of the Company. The number of Rights
evidenced by this Rights Certificate (and the number of shares which may be
purchased upon exercise thereof) set forth above, and the Purchase Price per
share set forth above, are the number and Purchase Price as of June 7, 2000,
based on the Preferred Stock as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (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, an Adverse Person or an Affiliate
or Associate of any such Person (as such terms are defined in the Rights
Agreement), (ii) a transferee of any such Acquiring Person, Adverse Person,
Associate or Affiliate, or (iii) under certain circumstances specified in the
Rights Agreement, a transferee of a person who, after such transfer, became an
Acquiring Person, an Adverse Person or an Affiliate or Associate of any such
Person, such Rights shall become null and void and no holder hereof shall have
any right with respect to such Rights from and after the occurrence of such
Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of shares of Preferred Stock or other securities which may be purchased
upon the exercise of the Rights evidenced by this Rights Certificate are subject
to modification and adjustment upon the happening of certain events, including
Triggering Events (as such term is 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,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Rights Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the specific circumstances set forth in the Rights Agreement.
Copies of the Rights Agreement are available upon written request to the
Company.
This Rights Certificate, with or without other Rights Certificates, upon
surrender at the principal office or offices of the Rights Agent designated for
such purpose, may be exchanged for another Rights Certificate or Rights
Certificates of like tenor and date evidencing Rights entitling the holder to
purchase a like aggregate number of one one-hundredths of a share of Preferred
Stock as the Rights evidenced by the Rights Certificate or Rights Certificates
surrendered shall have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be entitled to receive
upon surrender hereof another Rights Certificate or Rights Certificates for the
number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed by the Company at its option at a redemption
price of $0.01
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per Right at any time prior to the earliest of the close of business on (i) the
tenth business day following the Stock Acquisition Date, (ii) the tenth business
day following a declaration by the Board of Directors that a Person is an
Adverse Person, or, if later, the date such Person acquires beneficial ownership
of 10% or more of the outstanding Common Stock, and (iii) the Final Expiration
Date. After the expiration of the redemption period, the Company's right of
redemption may be reinstated if an Acquiring Person reduces his beneficial
ownership to less than 10% of the outstanding shares of Common Stock in a
transaction or series of transactions not involving the Company and there are no
other Acquiring Persons or Adverse Persons.
The Company may (but shall not be required to) issue fractional shares of
Preferred Stock upon the exercise of any Right or Rights evidenced hereby (other
than fractions which are integral multiples of one one-hundredth of a share of
Preferred Stock, which may, at the election of the Company, be evidenced by
depositary receipts), and in lieu thereof a cash payment may be made, as
provided in the Rights Agreement.
No holder of this Rights Certificate, as such, shall be entitled to vote
or receive dividends or be deemed for any purpose the holder of shares of
Preferred Stock or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or, to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Rights
Certificate shall have been exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for any purpose
until it shall have been countersigned by the Rights Agent.
WITNESS, the facsimile signature of the proper officers of the Company
and its corporate seal.
Dated as of _______________, ______
ATTEST: IMPSAT FIBER NETWORKS, INC.
By
---------------------------------
Name:
Title:
Countersigned:
-------------------------------------------------------
By
---------------------------------
Authorized Signature
-3-
55
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED ____________________ hereby
sells, assigns and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and interest therein,
and does hereby irrevocably constitute and appoint __________ Attorney, to
transfer the within Rights Certificate on the books of the within-named
Company, with full power of substitution.
Dated: _______________,
Signature
Signature Guaranteed:
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, an
Adverse Person or an Affiliate or Associate of any such Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [
] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or subsequently became an Acquiring Person, an Adverse
Person or an Affiliate or Associate of any such Person.
Dated: _______________, ______
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56
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Assignment and Certificate must correspond
to the name as written upon the face of this Rights Certificate in every
particular, without alteration or enlargement or any change whatsoever.
-5-
57
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to
exercise Rights represented by the
Rights Certificate.)
To: IMPSAT FIBER NETWORKS, INC.
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 insert social security
or other identifying number
(Please print name and address)
If such number of Rights shall not be all the Rights evidenced by this
Rights Certificate, a new Rights Certificate for the balance of such Rights
shall be registered in the name of and delivered to:
Please insert social security
or other identifying number
(Please print name and address)
Dated: _______________,
Signature
Signature Guaranteed:
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58
Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not
being exercised by or on behalf of a Person who is or was an Acquiring Person,
an Adverse Person or an Affiliate or Associate of any such Person (as such terms
are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it
[ ] did [ ] did not acquire the Rights evidenced by this Rights Certificate from
any Person who is, was or became an Acquiring Person, an Adverse Person or an
Affiliate or Associate of any such Person.
Dated: _______________, ______
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate must
correspond to the name as written upon the face of this Rights Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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59
EXHIBIT B
SUMMARY OF RIGHTS TO PURCHASE PREFERRED STOCK
On January 12, 2000, the Board of Directors of IMPSAT Fiber Networks,
Inc. (the "Company") declared a dividend distribution of one Right for each
outstanding share of Company Common Stock to stockholders of record at the close
of business on February 15, 2000. One Right will also be distributed for each
share of Common Stock issued after February 15, 2000, until the Distribution
Date (which is described in the next paragraph). Each Right entitles the
registered holder to purchase from the Company a unit consisting of one
one-hundredths of a share (a "Unit") of Series B Preferred Stock (the "Preferred
Stock"), at a Purchase Price of $[ ] per Unit, subject to adjustment. The
description and terms of the Rights are set forth in a Rights Agreement dated as
of June [ ], 2000 (the "Rights Agreement") between the Company and The Bank of
New York, as Rights Agent.
Initially, the Rights will be attached to all Common Stock certificates
representing shares then outstanding, and no separate Rights Certificates will
be distributed. The Rights will separate from the Common Stock and a
Distribution Date will occur upon the earliest of (i) 10 business days following
a public announcement that a person or group of affiliated or associated persons
(an "Acquiring Person") has acquired, or obtained the right to acquire,
beneficial ownership of 20% or more of the outstanding shares of Common Stock
(the "Stock Acquisition Date"), (ii) 10 business days following the commencement
of a tender offer or exchange offer that would if consummated result in a person
or group beneficially owning 20% or more of such outstanding shares of Common
Stock, subject to certain limitations (or, if later, the date of receipt of any
required regulatory approvals or approvals of the stockholders of such person or
group for such tender or exchange offer), or (iii) 10 business days after the
Board of Directors of the Company shall declare any Person to be an "Adverse
Person," upon a determination that such person, alone or together with its
affiliates and associates, has or will become the Beneficial Owner of 10% or
more of the outstanding shares of Common Stock (provided that any such
determination shall not be effective until such Person has become the Beneficial
Owner of 10% or more of the outstanding shares of Common Stock), including
consultation with such persons as such directors shall deem appropriate, that
(a) such beneficial ownership by such person is intended to cause, is reasonably
likely to cause or would cause the Company to change its strategic direction
under circumstances where the Board of Directors believes that such change is
not in the best interest of the Company and its Stockholders, employees,
customers, suppliers or other constituencies of the Company and its
subsidiaries, or (b) such beneficial ownership by such person is intended to
cause, is reasonably likely to cause or will cause pressure on the Company to
take action or enter into a transaction or series of transactions
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60
EXHIBIT B
including by causing a transaction with such person or other person, 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 stockholders would not be served by taking such action or entering into
such transactions or series of transactions at that time or (c) such beneficial
ownership is causing or is 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 or (d) such beneficial ownership otherwise
is determined to be not in the best interests of the Company and its
stockholders, employees, customers, suppliers, or other constituencies of the
Company or its subsidiaries.
However, the Board of Directors may not declare a person to be an Adverse
Person if, prior to the time that the person acquired 10% or more of the shares
of Common Stock then outstanding, such person provided to the Board of Directors
in writing a statement of the person's purpose and intentions in connection with
the proposed acquisition of Common Stock, together with any other information
reasonably requested of the person by the Board of Directors, and the Board of
Directors, based on such statement and reasonable inquiry and investigation as
it deems appropriate, determines to notify and notifies such person in writing
that it will not declare the person to be an Adverse Person; provided, however,
that the Board of Directors may expressly condition in any manner a
determination not to declare a person an Adverse Person on such conditions as
the Board of Directors may select, including, without limitation, such person's
not acquiring more than a specified amount of stock and/or on such person's not
taking actions inconsistent with the purposes and intentions disclosed by such
person in the statement provided to the Board of Directors. In the event that
the Board of Directors should at any time determine, upon reasonable inquiry and
investigation, that such person has not met or complied with any conditions
specified by the Board of Directors, the Board of Directors may at any time
thereafter declare the person to be an Adverse Person.
Until the Distribution Date (i) the Rights will be evidenced by the
Common Stock certificates and will be transferred with and only with such Common
Stock certificates, (ii) new Common Stock certificates issued after February 15,
2000 will contain a notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for Common Stock
outstanding will also constitute the transfer of the Rights associated with the
Common Stock represented by such certificate.
The Rights are not exercisable until the Distribution Date and will
expire at the close of business on December 31, 2010, subject to extension by
the Board of Directors, or unless earlier redeemed by the Company as described
below.
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61
EXHIBIT B
As soon as practicable after the Distribution Date, Rights Certificates
will be mailed to holders of record of the Common Stock as of the close of
business on the Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights. Except for certain issuances in
connection with outstanding options and convertible securities and as otherwise
determined by the Board of Directors, only shares of Common Stock issued prior
to the Distribution Date will be issued with Rights.
In the event that the Board of Directors determines that a person is an
Adverse Person or a person becomes the beneficial owner of 20% or more of the
then-outstanding shares of Common Stock, each holder of a Right will thereafter
have the right to receive at the time specified in the Rights Agreement, (x)
upon exercise and payment of the exercise price, Common Stock (or, in certain
circumstances, cash, property or other securities of the Company) having a value
equal to two times the exercise price of the Right or (y) at the discretion of
the Board of Directors, upon exercise and without payment of the exercise price,
Common Stock (or, in certain circumstances, cash, property or other securities
of the Company) having a value equal to the difference between the exercise
price of the Right and the value of the consideration which would be payable
under clause (x). Notwithstanding any of the foregoing, following the occurrence
of any of the events set forth in this paragraph, all Rights that are, or (under
certain circumstances specified in the Rights Agreement) were, beneficially
owned by any Acquiring Person or Adverse Person will be null and void. However,
Rights are not exercisable following the occurrence of either of the events set
forth above until such time as the Rights are no longer redeemable by the
Company as set forth below.
For example, at an exercise price of $200 per Right, each Right not owned
by an Acquiring Person or an Adverse Person (or by certain related parties)
following an event set forth in the preceding paragraph would entitle its holder
to purchase $400 worth of Common Stock (or other consideration, as noted above)
for $200. Assuming that the Common Stock had a per share value of $100 at such
time, the holder of each valid Right would be entitled to purchase four shares
of Common Stock for $200. Alternatively, at the discretion of the Board of
Directors, each Right following an event set forth in the preceding paragraph,
without payment of the exercise price, would entitle its holder to Common Stock
(or other consideration, as noted above) worth $200.
In the event that, at any time following the Stock Acquisition Date, (i)
the Company is acquired in a merger, statutory share exchange or other business
combination transaction in which the Company is not the surviving corporation,
or (ii) 50% or more of the Company's assets or earning power is sold or
transferred,
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62
EXHIBIT B
each holder of a Right (except Rights which previously have been voided as set
forth above) shall thereafter have the right to receive, upon exercise, common
stock of the acquiring company having a value equal to two times the exercise
price of the Right. The events set forth in this paragraph and in the second
preceding paragraph are referred to as the "Triggering Events."
The Purchase Price payable, and the number of Units of Preferred Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Preferred
Stock, (ii) if holders of the Preferred Stock are granted certain rights or
warrants to subscribe for Preferred Stock or convertible securities at less than
the current market price of the Preferred Stock, or (iii) upon the distribution
to holders of the Preferred Stock of evidences of indebtedness or assets
(excluding regular quarterly cash dividends) or of subscription rights or
warrants (other than those referred to above).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments amount to at least 1% of the Purchase
Price. No fractional Units will be issued and, in lieu thereof, an adjustment in
cash will be made based on the market price of the Preferred Stock on the last
trading date prior to the date of exercise.
In general, the Company may redeem the Rights in whole, but not in part,
at a price of $0.01 per Right, at any time until 10 business days following the
Stock Acquisition Date. Moreover, redemption would not be permitted after 10
business days following the effective date of any declaration by the Board of
Directors that any person is an Adverse Person. After the redemption period has
expired, the Company's right of redemption may be reinstated if an Acquiring
Person or Adverse Person reduces his beneficial ownership to less than 10% of
the outstanding shares of Common Stock in a transaction or series of
transactions not involving the Company and there are no other Acquiring Persons
or Adverse Persons. Immediately upon the action of the Board of Directors
ordering redemption of the Rights, the Rights will terminate and the only right
of the holders of Rights will be to receive the $0.01 redemption price.
Until a Right is exercised, the holder thereof, as such, will have no
rights as a stockholder of the Company, including, without limitation, the right
to vote or to receive dividends. While the distribution of the Rights will not
be taxable to stockholders or to the Company, stockholders may, depending upon
the circumstances, recognize taxable income in the event that the Rights become
exercisable for stock (or other consideration) of the Company or for common
stock of the acquiring company as set forth above.
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63
EXHIBIT B
Other than certain provisions relating to the principal economic terms of
the Rights under certain specified circumstances, any of the provisions of the
Rights Agreement may be amended by the Board of Directors of the Company prior
to the Distribution Date. After the Distribution Date, the provisions of the
Rights Agreement may be amended by the Board in order to cure any ambiguity, to
make changes which do not adversely affect the interests of holders of Rights
(excluding the interests of any Acquiring Person or Adverse Person), or to
shorten or lengthen any time period under the Rights Agreement; provided,
however, that no amendment to adjust the time period governing redemption shall
be made when the Rights are not redeemable.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to a Registration Statement on Form S-4 dated
June [ ], 2000. A copy of the Rights Agreement is available free of charge from
the Company. This summary description of the Rights does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement,
which is incorporated herein by reference.
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