Rights Agreement Dated as of November 19, 2008 between Double-Take Software, Inc. and Continental Stock Transfer & Trust Company
Exhibit 4.1
Dated as of November 19, 2008
between
and
Continental Stock Transfer & Trust Company
TABLE OF CONTENTS
| Page | ||
Section 1. Certain Definitions |
1 | |
Section 2. Appointment of Rights Agent |
8 | |
Section 3. Issue of Rights Certificates |
8 | |
Section 4. Form of Rights Certificates |
10 | |
Section 5. Countersignature and Registration |
11 | |
Section 6. Transfer, Split Up, Combination and Exchange of Rights Certificates; Mutilated, Destroyed, Lost or Stolen
Rights Certificates |
11 | |
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights |
12 | |
Section 8. Cancellation of Rights Certificates |
14 | |
Section 9. Reservation and Availability of Capital Stock |
14 | |
Section 10. Preferred Stock Record Date |
16 | |
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights |
16 | |
Section 12. Certificate of Adjusted Purchase Price or Number of Shares |
24 | |
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power |
24 | |
Section 14. Fractional Rights and Fractional Shares |
28 | |
Section 15. Rights of Action |
29 | |
Section 16. Agreement of Rights Holders |
30 | |
Section 17. Rights Certificate Holder Not Deemed a Stockholder |
31 | |
Section 18. Duties of Rights Agent |
31 | |
Section 19. Compensation and Indemnification of the Rights Agent |
33 | |
Section 20. Merger or Consolidation or Change of Name of Rights Agent |
34 | |
Section 21. Change of Rights Agent |
34 | |
Section 22. Issuance of New Rights Certificates |
35 | |
Section 23. Redemption and Review |
35 | |
Section 24. Exchange |
36 | |
Section 25. Notice of Certain Events |
38 | |
Section 26. Notices |
38 | |
Section 27. Supplements and Amendments |
39 | |
Section 28. Successors |
39 | |
Section 29. Determinations and Actions by the Board, Etc. |
40 | |
Section 30. Benefits of this Agreement |
40 | |
Section 31. Severability |
40 | |
Section 32. Governing Law |
41 | |
Section 33. Counterparts |
41 | |
Section 34. Descriptive Headings |
41 | |
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Rights Agreement, dated as of November 19, 2008 (the “Agreement”), between Double-Take
Software, Inc., a Delaware corporation (the “Company”), and Continental Stock Transfer &
Trust Company, a New York corporation (the “Rights Agent”).
WHEREAS, on November 10, 2008 (the “Rights Dividend Declaration Date”), the Board of
Directors of the Company authorized and declared a dividend of one preferred share purchase right
(a “Right”) for each share of Common Stock (as hereinafter defined) of the Company
outstanding at the Close of Business (as defined herein) on the Record Date (as defined herein),
and has authorized the issuance of one Right with respect to each share of Common Stock of the
Company issued (whether originally issued or delivered from the Company’s treasury) between the
Record Date and the earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined); provided, however that Rights may be
issued with respect to shares of Common Stock that become outstanding after the Distribution Date
and prior to the Expiration Date in accordance with Section 22; and
WHEREAS, each Right shall initially represent the right to purchase one one-thousandth of one
share of Series A Junior Participating Preferred Stock of the Company having the rights, powers and
preferences set forth in the form of Certificate of Designation, Preferences and Rights attached
hereto as Exhibit A, upon the terms and subject to the conditions hereinafter set forth;
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 that, together with all Affiliates
and Associates of such Person, shall be the Beneficial Owner of 15% or more of the shares of
Common Stock of the Company then outstanding, but shall not include (i) the Company,
(ii) any Subsidiary of the Company, (iii) any employee benefit plan of the Company or any
Subsidiary of the Company, or any Person holding shares of Common Stock for or pursuant to
the terms of any such employee benefit plan to the extent, and only to the extent, of such
shares of Common Stock so held, (iv) any Person, together with all Affiliates and Associates
of such Person, who is the Beneficial Owner of 15% or more of the shares of Common Stock of
the Company outstanding as of the date of this Agreement until such time after the date of
this Agreement that such Person, together with all Affiliates and Associates of such Person,
shall become the Beneficial Owner of any additional shares of Common Stock of the Company
(other than by means of a dividend made by the Company on the Common Stock outstanding or
pursuant to a split, subdivision or other reclassification of the Common Stock undertaken by
the Company) and shall then beneficially own more than 15% of the shares of Common Stock
then
outstanding, or (v) any Institutional Investor. Notwithstanding the foregoing, ABS Capital
Partners IV, LLC., together with its Affiliates and Associates (“ABS”), shall not be deemed
to be an “Acquiring Person”, but only so long as ABS is the Beneficial Owner of less than
20% of the shares of Common Stock then outstanding. Notwithstanding anything in this
definition of “Acquiring Person” to the contrary:
(i) no Person shall become an “Acquiring Person” as the result of an
acquisition of shares of Common Stock by the Company which, by reducing the number
of shares of Common Stock outstanding, increases the proportionate number of shares
of Common Stock beneficially owned by such Person to 15% or more (or in the case of
ABS, 20% or more) of the shares of Common Stock of the Company then outstanding;
provided, however, that if a Person shall become the Beneficial
Owner of 15% or more (or in the case of ABS, 20% or more) of the shares of Common
Stock of the Company then outstanding by reason of share acquisitions by the Company
and shall, after such share acquisitions by the Company, become the Beneficial Owner
of any additional shares of Common Stock of the Company (other than pursuant to a
dividend or distribution paid or made by the Company on the outstanding Common Stock
or pursuant to a split or subdivision of the outstanding Common Stock), then such
Person shall be deemed to be an “Acquiring Person” if such Person is then the
Beneficial Owner of 15% or more (or in the case of ABS, 20% or more) of the Common
Stock then outstanding; and
(ii) if the Board determines in good faith that a Person who would otherwise be
an “Acquiring Person,” as defined pursuant to the foregoing provisions of this
paragraph (a), has become such inadvertently (including, without limitation, because
(A) such Person was unaware that it beneficially owned a percentage of Common Stock
that would otherwise cause such Person to be an “Acquiring Person” or (B) such
Person was aware of the extent of its Beneficial Ownership of Common Stock but had
no actual knowledge of the consequences of such Beneficial Ownership under this
Agreement) and without any intention of changing or influencing control of the
Company, and such Person divests as promptly as practicable (as determined in good
faith by the Board) a sufficient number of shares of Common Stock so that such
Person would no longer be an “Acquiring Person,” as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person shall not be deemed an
“Acquiring Person” for any purposes of this Agreement unless and until such Person
shall again become an “Acquiring Person.”
(b) “Affiliate” and “Associate” shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under the Exchange
Act as in effect on the date of this Agreement.
(c) A Person shall be deemed the “Beneficial Owner” of, and shall be deemed to
“beneficially own,” any securities:
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(i) which such Person , or any of such Person’s Affiliates or Associates,
beneficially owns, directly or indirectly;
(ii) which such Person or any of such Person’s Affiliates or Associates,
directly or indirectly, has (A) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to any
agreement, arrangement or understanding (whether or not in writing), or upon the
exercise of conversion rights, exchange rights, other rights (other than these
Rights), warrants or options, or otherwise; provided, however, that
a Person shall not be deemed the “Beneficial Owner” of, or to “beneficially own,”
(1) securities tendered pursuant to a tender or exchange offer made by or on behalf
of such Person or any of such Person’s Affiliates or Associates until such tendered
securities are accepted for purchase or exchange, (2) 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(a)(i)
hereof in connection with an adjustment made with respect to any Original Rights; or
(B) the right to vote pursuant to any agreement, arrangement or understanding;
provided, however, that a Person shall not be deemed the Beneficial Owner of, or to
“beneficially own,” any security under this clause (B) if the agreement, arrangement
or understanding to vote such security (1) 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 rules and regulations of the Exchange Act and (2) is
not then reportable on Schedule 13D under the Exchange Act (or any comparable or
successor report);
(iii) 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), including pursuant to any agreement,
arrangement or understanding, whether or not in writing, or upon the exercise of
conversion rights, exchange rights, rights (other than these Rights), warrants or
options, or otherwise; provided, however, that a Person shall not be
deemed the “Beneficial Owner” of, or to “beneficially own,” any security under this
subparagraph (iii) as a result of an agreement, arrangement or understanding to vote
such security if such agreement, arrangement or understanding to vote such security
(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 Schedule 13D under the Exchange Act (or
any comparable or successor report);
(iv) which are beneficially owned, directly or indirectly, by any other Person
or any of such Person’s Affiliates or Associates with which such Person or
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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 clause (B) to
subparagraph (iii) of this paragraph (c)) or disposing of any securities of the
Company; or
(v) in respect of which such Person or any of such Person’s Affiliates or
Associates has a Synthetic Long Position (as hereinafter defined); provided,
however, that a Person will not be deemed the Beneficial Owner of, or to
beneficially own, any security if such beneficial ownership arises solely as a
result of such Person’s status as a “clearing agency,” as defined in
Section 3(a)(23) of the Exchange Act;
provided, however, that nothing in this paragraph (c) shall cause a Person
engaged in business as an underwriter of securities to be the “Beneficial Owner” of, or to
“beneficially own,” any securities acquired through such Person’s participation in good
faith in a firm commitment underwriting until the expiration of forty days after the date of
such acquisition; provided further, however, that no Person who is an
officer, director or employee of the Company or any Subsidiary of the Company shall be
deemed, solely by reason of such Person’s status or authority as such, to be the “Beneficial
Owner” of, or to “beneficially own,” any securities that are “beneficially owned” (as
defined in this paragraph (c)), including, without limitation, in a fiduciary capacity, by
the Company or any Subsidiary of the Company, or by any other such officer, director or
employee of the Company or any Subsidiary of the Company.
(d) “Board” shall mean the Board of Directors of the Company.
(e) “Business Day” shall mean any day other than a Saturday, a Sunday, or a day
on which banking or trust institutions in the State of New York are authorized or obligated
by law or executive order to close.
(f) “Close of Business” on any given date shall mean 5:00 P.M., New York City
time, on such date; provided, however, that if such date is not a Business
Day it shall mean 5:00 P.M., New York City time, on the next succeeding Business Day.
(g) “Common Stock” when used with reference to the Company shall mean the
shares of the common stock, par value $0.001 per share, of the Company. “Common Stock” when
used with reference to any Person other than the Company shall mean the class of capital
stock with the greatest aggregate voting power, or the class of equity securities or other
equity interests having power to control or direct the management of such Person.
(h) “Company” shall mean Double-Take Software, Inc., a Delaware corporation.
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(i) “Current Value” shall have the meaning set forth in Section
11(a)(iii) hereof.
(j) “Distribution Date” shall mean the earlier of (i) the Close of Business on
the tenth Business Day after the Stock Acquisition Date (or, if the tenth Business Day after
the Stock Acquisition Date occurs before the Record Date, the Close of Business on the
Record Date), or (ii) the Close of Business on the tenth Business Day (or, if such tenth
Business Day occurs before the Record Date, the Close of Business on the Record Date), or
such specified or unspecified later date on or after the Record Date as may be determined by
action of the Board prior to such time as any Person becomes an Acquiring Person, after the
date of the commencement by any Person (other than the Company, any Subsidiary of the
Company or any employee benefit plan of the Company or of any Subsidiary of the Company or
any Person holding shares of Common Stock for or pursuant to the terms of any such employee
benefit plan) of, or of the first public announcement of the intention of any Person (other
than any of the Persons referred to in the preceding parenthetical) to commence, a tender or
exchange offer the consummation of which would result in such Person becoming the beneficial
owner of 15% or more of the outstanding shares of Common Stock.
(k) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended,
as in effect on the date of this Agreement.
(l) “Exchange Date” shall have the meaning set forth in Section 7(a) hereof.
(m) “Expiration Date” shall have the meaning set forth in Section 7(a) hereof.
(n) “Final Expiration Date” shall have the meaning set forth in Section 7(a)
hereof.
(o)
“Institutional Investor” shall mean a Person who is required to file, and has
filed, a Schedule 13G with the Securities and Exchange Commission pursuant to Rule 13d-1 of
the General Rules and Regulations under the Exchange Act with respect to its holdings of
shares of the Company’s Common Stock, so long as (i) such Person is principally engaged in
the business of managing investment funds for unaffiliated securities investors and, as part
of such Person’s duties as agent for fully managed accounts, holds or exercises voting
and/or dispositive power over shares of the Company’s Common Stock, (ii) such Person
acquires Beneficial Ownership of shares of the Company’s Common Stock pursuant to trading
activities undertaken in the ordinary course of such Person’s business and not with the
purpose nor the effect, either alone or in concert with any other Person or Persons, of
exercising the power to direct or cause the direction of the management and policies of the
Company or of otherwise changing or influencing the control of the Company, nor in
connection with or as a participant in any
transaction having such purpose or effect, including any transaction subject to
Rule 13d-3(b) of the General Rules and Regulations
under the Exchange Act, and (iii) if such
Person is a Person included in Rule 13d-1(b)(1)(ii) of the General Rules and Regulations
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under the Exchange Act, such Person is not required to, has not and does not, file a
Schedule 13D with respect to the securities of the Company.
(p) “NASDAQ” shall have the meaning set forth in Section 11(d)(i).
(q) “Person” shall mean any individual, firm, corporation, partnership or other
entity, and shall include any successor (by merger or otherwise) of such entity.
(r) “Preferred Stock” shall mean shares of Series A Junior Participating
Preferred Stock, par value $.001 per share, of the Company.
(s) “Principal Party” shall have the meaning set forth in Section 13(b) hereof.
(t) “Purchase Price” shall have the meaning set forth in Section 4(a) and
Section 11(a)(ii) hereof.
(u) “Record Date” shall mean the Close of Business on December 1, 2008.
(v) “Redemption Date” shall have the meaning set forth in Section 7(a) hereof.
(w) “Redemption Period” shall have the meaning set forth in Section 23(a)
hereof.
(x) “Right” shall have the meaning set forth in the recitals hereof.
(y) “Rights Agent” shall mean Continental Stock Transfer & Trust Company, a
New York corporation.
(z) “Rights Certificate” shall have the meaning set forth in Section 3(d)
hereof.
(aa) “Rights Dividend Declaration Date” shall have the meaning set forth in the
recitals hereof.
(bb) “Section 11(a)(ii) Event” shall mean any event described in
Section 11(a)(ii) hereof.
(cc) “Section 11(a)(ii) Trigger Date” shall have the meaning set forth in
Section 11(a)(iii) hereof.
(dd) “Section 13 Event” shall mean any event described in clause (x), (y) or
(z) of Section 13(a) hereof.
(ee) “Securities Act” shall mean the Securities Act of 1933, as amended, as in
effect on the date of this Agreement.
(ff) “Spread” shall have the meaning set forth in Section 11(a)(iii) hereof.
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(gg) “Stock Acquisition Date” shall mean the first date of public announcement
(which, for purposes of this definition, shall include, without limitation, a report filed
pursuant to Section 13(d) of the Exchange Act) by the Company or an Acquiring Person that an
Acquiring Person has become such, or such earlier date as a majority of the Board shall
become aware of the existence of such an Acquiring Person.
(hh) “Subsidiary” of any Person shall mean any corporation or other entity of
which a majority of the voting power of the voting equity securities or equity interests is
owned, directly or indirectly, by such Person, or is otherwise controlled by such Person.
(ii) “Substitution Period” shall have the meaning set forth in Section
11(a)(iii).
(jj)
“Synthetic Long Position” shall mean any option, warrant, convertible security,
stock appreciation right or other contractual right, whether or not presently exercisable,
which has an exercise or conversion privilege or a settlement payment or mechanism at a
price related to Common Stock or a value determined in whole or part with reference to, or
derived in whole or in part from, the market price or value of Common Stock, whether or not
such right is subject to settlement in whole or in part in Common Stock, and which increases
in value as the value of Common Stock increases or which provides to the holder of such
right an opportunity, directly or indirectly, to profit or share in any profit derived from
any increase in the value of Common Stock, but shall not include:
(i) rights of a pledgee under a bona fide pledge of Common Stock;
(ii) rights of all holders of Common Stock to receive Common Stock pro rata, or
obligations to dispose of Common Stock, as a result of a merger, exchange offer, or
consolidation involving the Company;
(iii) rights or obligations to surrender Common Stock, or have Common Stock
withheld, upon the receipt or exercise of a derivative security or the receipt or
vesting of equity securities, in order to satisfy the exercise price or the tax
withholding consequences of receipt, exercise or vesting;
(iv) interests in broad-based index options, broad-based index futures, and
broad-based publicly traded market baskets of stocks approved for trading by the
appropriate federal governmental authority;
(v) interests or rights to participate in employee benefit plans of the Company
held by employees or former employees of the Company; or
(vi) options granted to an underwriter in a registered public offering for the
purpose of satisfying over-allotments in such offering.
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The shares of Common Stock in respect of which a Person has a Synthetic Long Position shall
be the notional or other number of shares of Common Stock specified in a filing by such
Person or any of such Person’s Affiliates or Associates with the Securities and Exchange
Commission in respect of which shares of Common Stock are the “subject security” or in the
documentation evidencing the Synthetic Long Position as being subject to be acquired upon
the exercise or settlement of the applicable right or as the basis upon which the value or
settlement amount of such right, or the opportunity of the holder of such right to profit or
share in any profit, is to be calculated in whole or in part or, if no such number of shares
of Common Stock is specified in any filing or documentation, as determined by the Board of
Directors of the Company in good faith to be the number of shares of Common Stock to which
the Synthetic Long Position relates.
(kk) “Trading Day” shall have the meaning set forth in Section 11(d)(i).
(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 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) As promptly as practicable following the Record Date, the Company shall make available a
copy of a Summary of Rights to Purchase Preferred Stock, in substantially the form attached hereto
as Exhibit B (the “Summary of Rights”), to each record holder of Common Stock who
may so request from time to time prior to the Expiration Date. With respect to certificates for
shares of Common Stock outstanding as of the Record Date, until the Distribution Date, the Rights
shall 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 Distribution
Date (or the earlier Expiration Date or Final Expiration Date), the transfer of any certificate
representing shares of Common Stock in respect of which Rights have been issued shall also
constitute the transfer of the Rights associated with the shares of Common Stock represented
thereby.
(b) Rights shall be issued in respect of all shares of Common Stock issued (whether originally
issued or from the Company’s treasury) after the Record Date but prior to the earliest of the
Distribution Date, the Redemption Date and the Final Expiration Date; provided,
however, Rights shall also be issued to the extent provided in Section 22 hereof in respect
of all shares of Common Stock which are issued (whether originally issued or from the Company’s
treasury) after the Distribution Date and prior to the Expiration Date. Certificates representing
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such shares of Common Stock shall also be deemed to be certificates for Rights, and shall bear the
following legend (in addition to any other legends that may be required):
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between Double-Take Software, Inc.
(the “Company”) and Continental Stock Transfer & Trust Company (the “Rights
Agent”) dated as of November 19, 2008, as the same may be amended from time to
time (the “Rights Agreement”), the terms of which are hereby incorporated
herein by reference and a copy of which is on file at the principal executive
offices of the Company. Under certain circumstances, as set forth in the
Rights Agreement, such Rights shall be evidenced by separate certificates and
shall no longer be evidenced by this certificate. The Company shall mail to
the holder of this certificate a copy of the Rights Agreement as in effect on
the date of mailing without charge 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 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, 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 such certificate shall also constitute the transfer of the Rights associated with
the Common Stock represented thereby. Notwithstanding this paragraph (b), the omission of the
foregoing legend shall not affect the enforceability of any part of this Agreement or the rights of
any holder of the Rights.
(c) Until the Distribution Date, (i) the Rights shall be evidenced (subject to the provisions
of paragraph (a) of this Section 3) by the certificates for Common Stock registered in the names of
the holders thereof (which certificates for Common Stock shall also be deemed to be Rights
Certificates) and not by separate Rights Certificates, and (ii) the Rights shall be transferable
only in connection with the transfer of the underlying shares of Common Stock (including a transfer
to the Company).
(d) As soon as practicable after the Distribution Date, the Company shall prepare and execute,
the Rights Agent shall countersign and the Company shall send or cause to be sent (and the Rights
Agent shall, if requested, send) by first-class, insured, postage-prepaid mail, to each record
holder of Common Stock as of the Close of Business on the Distribution Date, at the address of such
holder shown on the records of the Company, a rights certificate, in substantially the form of
Exhibit C hereto (the “Rights Certificate”), evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided herein. In the event that an adjustment in
the number of Rights per share of Common Stock has been made pursuant to
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Section 11 hereof, at the
time of distribution of the Rights Certificates, the Company shall make 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 shall be evidenced solely by
such Rights Certificates.
Section 4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of election to purchase and of assignment to be
printed on the reverse thereof) shall be substantially the same as Exhibit C 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 issued, shall be
dated as of the Record Date, shall show the date of countersignature, and on their face shall
entitle the holders thereof to purchase such number of one one-thousandths of a share of Preferred
Stock as shall be set forth therein at the price set forth therein (such exercise price per one
one-thousandth of a share, the “Purchase Price”), but the amount and type of securities
purchasable upon 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(d) or Section 22 hereof that
represents Rights beneficially owned by (i) an Acquiring Person or any Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes such or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who becomes a transferee prior to or
concurrently with the Acquiring Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the Acquiring Person to holders of equity
interests in such Acquiring Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred Rights or (B) a
transfer which a majority of the members of the Board has determined is part of an agreement,
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 contain (to the extent feasible) the following legend:
The Rights represented by this Rights Certificate are or were beneficially
owned by a Person who was or became an Acquiring Person or an Affiliate or
Associate of an Acquiring Person (as such terms are defined in the Rights
Agreement). Accordingly, this Rights Certificate and the Rights represented
hereby may become null and void in the circumstances specified in
Section 7(e) of such Rights Agreement.
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The Company shall instruct the Rights Agent in writing of the Rights which should be so
legended and shall supply the Rights Agent with such legended Rights Certificates.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the Company by its Chief Executive
Officer, President, Vice President or Chief Financial Officer and by its Secretary or Assistant
Secretary either manually or by facsimile signature. The Rights Certificates shall be manually
countersigned by the Rights Agent 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 Certificate 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 shall keep or cause to be kept, at its
principal office or at offices 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 the
Rights Certificates and the date of each of the Rights Certificates.
Section 6. Transfer, Split Up, 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 earlier of the Expiration Date or the Final Expiration Date, any Rights Certificate or
Certificates may be transferred, split up, combined or exchanged for another Rights Certificate or
Certificates, entitling the registered holder to purchase a like number of one one-thousandths 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
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 properly 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
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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 Certificates, as the case may be, as
so requested. The Company may require payment by the holder of Rights of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any transfer, split up,
combination or exchange of Rights Certificates.
(b) Upon receipt by the Company and the Rights Agent of evidence reasonably satisfactory to
them of the loss, theft, destruction or mutilation of a Rights Certificate, and, in case of loss,
theft or destruction, of indemnity or security reasonably satisfactory to them, and, at the
Company’s request, reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of the Rights
Certificate, if mutilated, the Company shall execute and deliver a new Rights Certificate of like
tenor to the Rights Agent for countersignature and 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, in 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 and properly executed, to the Rights Agent at the office of the Rights Agent
designated for such purpose, together with payment of the Purchase Price for each one
one-thousandth of a share of Preferred Stock (or other securities, cash or other assets, as the
case may be) as to which the Rights are exercised, at or prior to the earliest of (i) the close of
business on November 18, 2009 (the “Final Expiration Date”), (ii) the time at which the
Rights are redeemed (the “Redemption Date”) as provided in Section 23 hereof or (iii) the
time at which the Rights are exchanged (the “Exchange Date”) as provided in Section 24
hereof (the earliest of (i), (ii) and (iii) being herein referred to as the “Expiration
Date”).
(b) Each Right shall entitle the registered holder thereof to purchase one one-thousandth of
a share of Preferred Stock. The Purchase Price for each one one-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall initially be $0.001, and shall be
subject to adjustment from time to time as provided in Section 11 and Section 13 hereof and shall
be payable in lawful money of the United States of America in accordance with paragraph (c) of
this Section 7.
(c) Upon receipt of a Rights Certificate representing exercisable Rights, with the form of
election to purchase and the certificate duly and properly executed, accompanied by payment, with
respect to each Right so exercised, of the Purchase Price per one one-thousandth of a share of
Preferred Stock (or Common Stock, other securities, cash or other assets, as the case may be) to be
purchased and an amount equal to any applicable transfer tax or governmental charge in cash, or by
certified check or cashier’s check payable to the order of the Company, the Rights Agent shall,
subject to Section 18(k) hereof, thereupon promptly
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(i) (A) requisition from any transfer agent of
the shares of Preferred Stock (or make available, if the Rights Agent is the transfer agent)
certificates for the total number of one one-thousandths 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-thousandths of a
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 shall direct the depositary to comply with such request,
(ii) requisition from the Company the amount of cash, if any, to be paid in lieu of issuance of
fractional shares in accordance with Section 14 hereof, (iii) promptly after receipt of such
certificates or depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Rights Certificate, registered in such name or names as may be designated
by such holder, and (iv) after receipt thereof, promptly deliver such cash, if any, to or upon the
order of the registered holder of such Rights Certificate. In the event that the Company is
obligated to issue other securities (including Common Stock) of the Company, pay cash and/or
distribute other property pursuant to Section 11(a) hereof, the Company shall make all arrangements
necessary so that such securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate. The Company reserves the right to require prior to the
occurrence of a Triggering Event that, upon any exercise of Rights, a number of Rights be exercised
so that only whole shares of Preferred Stock would be issued.
(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
or any Associate or Affiliate of an Acquiring Person, (ii) a transferee of an Acquiring Person (or
of any such Associate or Affiliate) who becomes a transferee after the Acquiring Person becomes
such, or (iii) a transferee of an Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring Person becoming such and receives
such Rights pursuant to either (A) a transfer (whether or not for consideration) from the Acquiring
Person to holders of equity interests in such Acquiring Person or to any Person with whom such
Acquiring Person has any continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer which a majority
of the members of the Board has determined is part of an agreement, 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 ensure that the provisions of this Section 7(e) and of
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
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with respect to
an Acquiring Person or its Affiliates, Associates or transferees hereunder. The Rights Agent shall
endeavor to comply with the provisions hereof to the extent it has received instructions from the
Company concerning such matters.
(f) Notwithstanding anything in this Agreement to the contrary, neither the Rights Agent nor
the Company shall be obligated to undertake any action with respect to a registered holder upon the
occurrence of any purported exercise as set forth in this Section 7 unless such registered holder
shall have (i) properly completed and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the 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 shall reasonably request.
Section 8. Cancellation 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 to any of its agents, be delivered
to the Rights Agent for cancellation or in cancelled form, or, if surrendered to the Rights Agent,
shall be cancelled by it, and no Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any provisions of this Rights 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 shall cause to be reserved and kept available out of its authorized and
unissued shares of 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, shares of Common Stock and/or other securities) that, as provided
in this Agreement, including Section 11(a)(iii) hereof, shall be sufficient to permit the exercise
in full of all outstanding Rights.
(b) In the event the shares of Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) issuable upon the exercise of Rights become listed on
NASDAQ or any national securities exchange, the Company shall use its
reasonable 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 or NASDAQ or such exchange upon
official notice of issuance upon such exercise.
(c) The Company shall use its reasonable 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
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determined in
accordance with this Agreement, or as soon as is required by law following the Distribution Date,
as the case may be, a registration statement under the Securities 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 Securities Act) until the earlier of (A) the date as of which the Rights
are no longer exercisable for such securities, and (B) the Expiration Date. The Company shall 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 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. In addition, if
the Company shall determine that a registration statement is required following the Distribution
Date, the Company may temporarily suspend the exercisability of the Rights until such time as a
registration statement has been declared effective. Upon any suspension of exercisability of
Rights referred to in this Section 9(c), 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, in each case with simultaneous written
notice to the Rights Agent. Notwithstanding any provision of this Agreement to the contrary, the
Rights shall not be exercisable and shall be null and void so long as held by a holder in any
jurisdiction where the requisite qualification to the issuance to such holder, or the exercise by
such holder, of the Rights in such jurisdiction shall not have been obtained or be obtainable, or
the exercise thereof shall not be permitted under applicable law or a registration statement shall
not have been declared effective. The Rights Agent may assume that any Right exercised is
permitted to be exercised under applicable law and shall have no liability for acting in reliance
upon such assumption.
(d) The Company shall take all such action as may be necessary to ensure that all one
one-thousandths 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 non-assessable.
(e) The Company shall 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
or of any certificates for a number of one one-thousandths 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 or charge 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 certificates for a number of one one-thousandths 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 of the Rights Certificate evidencing Rights surrendered for exercise
or to issue or deliver any certificates for a number of one one-thousandths 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 any such tax or charge shall have been
paid (any such tax or charge being payable by the holder of such Rights
-15-
Certificate at the time of
surrender) or until it has been established to the Company’s satisfaction that no such tax or
charge is due.
Section 10. Preferred Stock Record Date.
Each Person in whose name any certificate for a number of one one-thousandths 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 any
applicable transfer taxes and charges) 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 evidenced thereby, the holder of a Rights Certificate 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 or merger in which the
Company is the continuing or surviving corporation), except as otherwise provided in this
Section 11(a) and in 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 the number and kind of
shares of capital stock issuable on such date, as the case may be, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be entitled to receive,
upon payment of the aggregate adjusted Purchase Price then in effect necessary to exercise a Right
in full, the aggregate number and kind of shares of Preferred Stock or the number and kind of
shares of 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 transfer books of the Company for the Preferred Stock (or
other capital stock, as the case may be) were open, such holder would have
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owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision, combination or
reclassification; provided, however, that in no event shall the consideration to be
paid upon the exercise of one Right be less than the aggregate par value of the shares of capital
stock of the Company issuable upon exercise of one Right. 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) Subject to Section 23 and Section 24 of this Agreement, in the event that 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 employee benefit plan), alone or together with its
Affiliates and Associates, shall become an Acquiring Person, unless the event causing such Person
to become an Acquiring Person is a transaction set forth in Section 13(a) hereof, or is an
acquisition of shares of Common Stock pursuant to a cash tender offer made pursuant to
Section 14(d) of the Exchange Act for all outstanding shares of Common Stock (other than shares of
Common Stock beneficially owned by the Person making the offer or by its Affiliates or Associates)
at a price and on terms determined by at least two-thirds of the members of the Board, after
receiving advice from one or more investment banking firms, to be (a) at a price which is fair to
stockholders (taking into account all factors which such members of the Board deem relevant
including, without limitation, prices which could reasonably be achieved if the Company or its
assets were sold on an orderly basis designed to realize maximum value) and (b) otherwise in the
best interests of the Company and its stockholders, proper provision shall be made so that promptly
following the Redemption Period (as defined in Section 23(a)), 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 and payment of an amount equal to the then current Purchase Price in accordance
with the terms of this Agreement, in lieu of a number of one one-thousandths 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-thousandths of a share of Preferred Stock for which a Right was or would have been exercisable
immediately prior to the first occurrence of a Section 11(a)(ii) Event, whether or not such Right
was then exercisable, 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 except to the extent set forth in Section 13 hereof) by 50% of the current market
price per share of Common Stock (determined pursuant to Section 11(d) hereof) on the date of such
first occurrence (such number of shares, the “Adjustment Shares”).
(iii) The Company at its option may substitute for a share of Common Stock issuable upon the
exercise of Rights in accordance with the foregoing subparagraph (ii) such number or fractions of
shares of Preferred Stock having an aggregate market value equal to the current market price (as
determined pursuant to Section 11(d) hereof) per share of the Common Stock. In the event that the
number of shares of Common Stock which is authorized by the Company’s Certificate of Incorporation
but not outstanding, or reserved for issuance for purposes other than upon exercise of the Rights,
is not sufficient to permit the exercise in full of the Rights in accordance with the foregoing
subparagraph (ii), the Board shall, to the extent
-17-
permitted by applicable law and by any agreements
or instruments then in effect to which the Company is a party, (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
(subject to Section 7(e) hereof), make adequate provision to substitute for some or all of the
Adjustment Shares, upon 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 has
deemed to have the same value as shares of Common Stock) (such shares of equity securities being
herein called “common stock equivalents”), (4) debt securities of the Company, (5) other
assets or (6) any combination of the foregoing, having an aggregate value equal to the Current
Value, where such aggregate value has been determined by the Board based upon the advice of an
investment banking firm selected by the Board; provided, however, if the Company
shall not have made adequate provision to deliver value pursuant to clause (B) above within 30 days
following the 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) hereof 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 such number of fractions of shares of Preferred Stock (to the extent available) and then,
if necessary, cash, which shares and/or cash have an aggregate value equal to the Spread.
If, upon the occurrence of a Section 11(a)(ii) Event, the Board shall determine in good faith
that it is likely that sufficient additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, then if the Board so elects, the thirty (30) day
period set forth above may be extended to the extent necessary, but not more than ninety (90) days
after the Section 11(a)(ii) Trigger Date, in order that the Company may seek stockholder approval
for the authorization of such additional shares (such period, as it may be extended, the
“Substitution Period”). To the extent that action is to be taken pursuant to the preceding
provisions 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 the first sentence of this Section 11(a)(iii) 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. The Board may, but shall not be required to, establish procedures to
allocate the right to receive shares of Common Stock upon the exercise of the Rights among holders
of Rights pursuant to this Section 11(a)(iii).
(b) In case the Company shall fix a record date for the issuance of rights, options or
warrants to all holders of Preferred Stock entitling them (for a period expiring within
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forty-five
(45) calendar days after such record date) to subscribe for or purchase Preferred Stock (or shares
having the same rights, privileges and preferences as the 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 per share of the Preferred
Stock (as determined pursuant to Section 11(d) hereof) on such record date, the Purchase Price to
be in effect after such record date shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the numerator of which shall be the number of
shares of Preferred Stock or equivalent preferred stock outstanding on such record date, plus the
number of shares of Preferred Stock or equivalent 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 or equivalent 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); provided, however, that in no event shall the consideration
to be paid upon the exercise of one Right be less than the aggregate par value of the shares of
capital stock of the Company issuable upon exercise of one Right. In case such subscription price
may be paid in a consideration part or all of which shall be in a form other than cash, the value
of such consideration shall be as determined in good faith by the Board, whose determination shall
be described in a statement filed with the Rights Agent and shall be conclusive for all purposes.
Shares of Preferred Stock or equivalent preferred stock owned by or held for the account of the
Company shall not be deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in the event that such rights,
options or warrants are not so issued, the 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 or merger in which
the Company is the continuing or surviving 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 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 per
share of the Preferred Stock (as determined pursuant to Section 11(d) hereof) on such record date,
less the fair market value (as determined in good faith by the Board, whose determination shall be
described in a statement filed with the Rights Agent and shall be conclusive for all purposes) 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 per share of the Preferred Stock; provided,
however, that in no event shall the consideration to be paid upon the exercise of one Right
be less than the aggregate par value of the shares of capital stock of the Company
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issuable upon
exercise of one Right. Such adjustment shall be made successively whenever such a record date is
fixed; and in the event that such distribution is not so made, the Purchase Price shall again be
adjusted to be the Purchase Price which would then be in effect if such record date had not been
fixed.
(d) (i) For the purpose of any computation hereunder, the “current market price” of
the 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 30 consecutive Trading Days (as such term is hereinafter
defined) immediately prior to, but not including, such date, and for purposes of computations made
pursuant to Section 11(a)(iii) 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 Common Stock for
the ten (10) consecutive Trading Days immediately following such date; provided,
however, that in the event that the current market price of the Common Stock is determined
during a period following the announcement by the issuer of such Common Stock of (i) a dividend or
distribution on such Common Stock payable in shares of such Common Stock or securities convertible
into such Common Stock (other than the Rights), or (ii) 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 periods, 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 appropriately
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 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 NASDAQ Stock Market, LLC (“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 shares of Common Stock selected by the Board.
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 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,
the term “Trading Day” shall mean a Monday, a Tuesday, a Wednesday, a Thursday or a Friday
on which banking or trust institutions in the State of New York are not authorized or obligated by
law or executive order to close. If the Common Stock is not publicly held or not listed or traded,
“current market price” shall mean the fair value per share as
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determined in good faith by the
Board, whose determination shall be described in a statement filed with the Rights Agent and shall
be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the “current market price” per
share of the 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 the 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 the Preferred Stock shall
be conclusively deemed to be an amount equal to 1,000 (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, the “current market price” per share of the Preferred Stock shall mean the fair
value per share as determined in good faith by the Board, whose determination shall be described in
a statement filed with the Rights Agent and shall be conclusive for all purposes. For all purposes
of this Agreement, the “current market price” of one one-thousandth of a share of Preferred Stock
shall be equal to the “current market price” of one share of Preferred Stock divided by 1,000.
(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 such 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),
an adjustment required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which requires such adjustment or (ii) the 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 of the Company 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 Sections 11(a), (b),
(c), (e), (g), (h), (i), (j), (k), (l) and (m) hereof, and the provisions of Sections 7, 9, 10, 13
and 14 hereof with respect to the Preferred Stock shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Company subsequent to any adjustment made to the
Purchase Price hereunder shall evidence the right to purchase, at the adjusted Purchase Price, the
number of one one-thousandths 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.
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(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) hereof, each Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that number of one
one-thousandths of a share of Preferred Stock (calculated to the nearest one-thousandths of a
share) obtained by (i) multiplying (x) the number of one one-thousandths 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-thousandths of a
share of Preferred Stock issuable upon the exercise of a Right. Each of the Rights outstanding
after such adjustment of the number of Rights shall be exercisable for the number of one
one-thousandths 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 ten-thousandth) obtained by dividing
the Purchase Price in effect immediately prior to adjustment of the Purchase Price by the Purchase
Price in effect immediately after adjustment of the Purchase Price. The Company shall make a
public announcement 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) business 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-thousandths of a share of Preferred Stock issuable upon the exercise of the Rights, the Rights
Certificates theretofore and thereafter issued may continue to express the Purchase Price per one
one-thousandth of a share and the number of one one-thousandths of a share which were expressed in
the initial Rights Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing the Purchase Price below
the then-par value, if any, of the number of one one-thousandths of a share
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of Preferred 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, as
fully paid and non-assessable, such number of one one-thousandths of a share of Preferred Stock at
such adjusted Purchase Price.
(l) In any case in which this Section 11 shall require that an adjustment in the Purchase
Price be made effective as of a record date for a specified event, the Company may elect to defer
until the occurrence of such event the issuance to the holder of any Right exercised after such
record date the number of one one-thousandths 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-thousandths 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 upon the occurrence of the event requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding, the Company shall be entitled
to make such reductions in the Purchase Price, in addition to those adjustments expressly required
by this Section 11, as and to the extent that the Board in its sole discretion 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 Preferred Stock, (iv) stock dividends or
(v) issuance of rights, options or warrants referred to hereinabove in this Section 11, hereafter
made by the Company to holders of its Preferred Stock shall not be taxable to such stockholders.
(n) The Company 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(o) hereof), (ii) merge with or into any other Person (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o) 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
complies with Section 11(o) hereof), if (x) at the time of or immediately after such consolidation,
merger or sale 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 or sale, 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.
(o) Except as permitted by Section 23, Section 24 or Section 27 hereof, the Company shall not
take (or permit any Subsidiary to take) after the Distribution Date 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.
-23-
(p) Anything in this Agreement to the contrary notwithstanding, in the event that the Company,
at any time after the Rights Dividend Declaration Date and prior to the Distribution Date, shall
(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.
Section 12. Certificate of Adjusted Purchase Price or Number of Shares.
Whenever an adjustment is made as provided in Section 11 or Section 13 hereof, the Company
shall (a) promptly prepare a certificate setting forth such adjustment, and a brief statement of
the facts and computations 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 or deliver 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. Notwithstanding the foregoing sentence, the
failure of the Company to prepare such certificate or statement or make such filings or mailings
shall not affect the validity of, or the force or effect of, the requirement for such adjustment.
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 any adjustment unless and until it
shall have received such certificate.
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power.
(a) Subject to Section 23 of this Agreement, in the event that, following the Stock
Acquisition Date, directly or indirectly,
(x) the Company shall consolidate with, or merge with and into, any other Person (other
than a Subsidiary of the Company in a transaction which complies with Section 11(o) hereof), and
the Company shall not be the continuing or surviving corporation of such consolidation or
merger,
(y) any Person (other than a Subsidiary of the Company in a transaction which complies
with Section 11(o) hereof) shall consolidate with, or merge with or into, the Company, and the
Company shall be the continuing or surviving corporation of such consolidation or merger and, in
connection with such consolidation or merger, all or part of the outstanding shares of Common
Stock shall be changed into or exchanged for stock or other securities of any other Person (or
of the Company) or cash or any other property, or
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(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,
cash flow or earning power aggregating more than 50% of the assets, cash flow or earning power
of the Company and its Subsidiaries (taken as a whole) to any Person or Persons (other than the
Company and/or any Subsidiary of the Company in one or more transactions each of which complies
with Section 11(o) hereof),
then, and in each such case (except as may be contemplated by Section 13(e) hereof), proper
provision shall be made so that:
(i) each holder of a Right, except as provided in Section 7(e) hereof, shall, upon the
expiration of the Redemption Period (as defined in Section 23(a)), 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,
non-assessable and freely tradable shares of Common Stock of the Principal Party (as such term
is hereinafter defined), not subject to any liens, encumbrances, rights of first refusal or
other adverse claims, as shall be equal to the result obtained by
(1) multiplying the then current Purchase Price by the number of one
one-thousandths of a share of Preferred Stock for which a Right was
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 one one-thousandths 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
(2) dividing that product (which product, 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 50% of the current
market price per share of the shares of Common Stock of such Principal Party
on the date of consummation of such Section 13 Event (or
the fair market value on such date of other securities or property of the
Principal Party, as provided for herein);
(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
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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), (A) the Person (including the Company as successor
thereto or as the surviving corporation) that is the issuer of any securities into
which shares of Common Stock of the Company are converted in such merger or
consolidation, or, if there is more than one such issuer, the issuer of Common Stock
that has the highest aggregate current market price (determined pursuant to Section
11(d) hereof) and (B) if no securities or other equity interests are so issued, the
Person (including the Company as successor thereto or as the surviving corporation)
that is the other constituent party to such merger or consolidation, or, if there is
more than one such Person, the Person that is a constituent party to such merger or
consolidation whose Common Stock has the highest aggregate current market price
(determined pursuant to Section 11(d) hereof); 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 receiving the greatest
portion of the assets, cash flow or earning power transferred pursuant to such
transaction or transactions, or, if each Person that is a party to such transaction
or transactions receives the same portion of the assets or earning power transferred
pursuant to such transaction or transactions or if the Person receiving the largest
portion of such assets or earning power cannot be determined, the Person that has
received such assets or earning power whose Common Stock has the highest aggregate
current market price (determined pursuant to Section 11(d) hereof);
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; (2) if the Common Stock of such Person is not and has not been so
registered and 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; and (3) if the Common Stock of such Person is not and has not been so registered and
such Person is owned, directly or indirectly, by a joint venture formed by two or more Persons that
are not owned, directly or indirectly, by the same Person, the rules set forth in (1) and (2) above
shall apply to each of the chains of ownership having an interest in such joint venture as if such
party were a Subsidiary of both or all of such joint venturers, and the Principal
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Parties in each
such chain shall bear the obligations set forth in this Section 13 in the same ratio as their
direct or indirect interests in such Person bear to the total of such interests.
(c) The Company shall not consummate any Section 13 Event 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 such Section 13 Event, the Principal Party shall:
(i) prepare and file a registration statement under the Securities Act, with
respect to the Rights and the securities purchasable upon exercise of the Rights on
an appropriate form, and 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 Securities
Act) until the Expiration Date;
(ii) deliver to holders of the Rights historical financial statements for the
Principal Party and each of its Affiliates that comply in all respects with the
requirements for registration on Form 10 under the Exchange Act;
(iii) use its best efforts to obtain any necessary regulatory approvals in
respect of the securities purchasable upon exercise of outstanding Rights; and
(iv) use its best efforts, if such Common Stock of the Principal Party shall
be listed or admitted to trading on NASDAQ or on the New York Stock Exchange or on
another national securities exchange to list or admit to trading (or continue the
listing of) the Rights and the securities purchasable upon exercise of the Rights on
NASDAQ or on the New York Stock Exchange or on such securities exchange or if the
securities of the Principal Party purchasable upon exercise of the Rights shall not
be listed or admitted to trading on NASDAQ or on the New
York Stock Exchange or a national securities exchange to cause the Rights and the
securities purchasable upon exercise of the Rights to be reported by such other
system then in use.
(d) In case the Principal Party that is to be a party to a transaction referred to in this
Section 13 has at the time of such transaction, or immediately following such transaction shall
have, a provision in any of its authorized securities or in its certificate or articles of
incorporation or by-laws or other instrument governing its affairs, or any other agreements or
arrangements, which provision would have the effect of (i) causing such Principal Party to issue,
in connection with, or as a consequence of, the consummation of a transaction referred to in this
Section 13, shares of Common Stock of such Principal Party at less than the then current market
price per share (as determined pursuant to Section 11(d) hereof) or securities exercisable for, or
convertible into, Common Stock of such Principal Party at less than such then current market price
(other than to holders of Rights pursuant to this Section 13), (ii) providing for any special
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payment, tax or similar provisions in connection with the issuance of the Common Stock of such
Principal Party pursuant to the provisions of this Section 13 or (iii) otherwise eliminating or
substantially diminishing the benefits intended to be afforded by the Rights in connection with, or
as a consequence of, the consummation of a transaction referred to in this Section 13, then, in
such event, the Company shall not consummate any such transaction unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights Agent a supplemental
agreement providing that the provision in question of such Principal Party shall have been
cancelled, waived or amended, or that the authorized securities shall be redeemed, so that the
applicable provision shall have no effect in connection with, or as a consequence of, the
consummation of such transaction.
(e) Notwithstanding anything in this Agreement to the contrary, Section 13 shall not be
applicable to a transaction described in subparagraphs (x) and (y) of Section 13(a) if (i) such
transaction is consummated with a Person or Persons (or a wholly owned subsidiary of any such
Person or Persons) who acquired shares of Common Stock pursuant to a cash tender offer for all
outstanding shares of Common Stock which complies with the provisions of Section 11(a)(ii) hereof,
(ii) the price per share of Common Stock offered in such transaction is not less than the price per
share of Common Stock paid to all holders of Common Stock whose shares were purchased pursuant to
such cash tender offer and (iii) the form of consideration being offered to the remaining holders
of shares of Common Stock pursuant to such transaction is the same as the form of consideration
paid pursuant to such cash tender offer. Upon consummation of any such transaction contemplated by
this Section 13(e), all Rights hereunder shall expire.
(f) The provisions of this Section 13 shall similarly apply to successive mergers or
consolidations or sales or other transfers. In the event that a Section 13 Event shall occur at
any time after the 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) hereof.
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(p) hereof, or to distribute Rights Certificates which
evidence fractional Rights. In lieu of such fractional Rights, there shall be paid to the
registered holders of the Rights Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same fraction of the current market value of
the whole Right. For the purposes of this Section 14(a), the current market value of a whole Right
shall be the closing price of the Rights for the Trading Day immediately prior to the date on which
such fractional Rights would have been otherwise issuable. The closing price for any day shall be
the last sale price, or, in case no such sale takes place on such day, the average of the high bid
and low asked prices, in either case as reported by NASDAQ or, if the Rights are not listed or
admitted to trading on NASDAQ, 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 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
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closing bid and asked prices
as furnished by a professional market maker making a market in the Rights selected by the Board.
If on any such date no such market maker is making a market in the Rights, the fair value of the
Rights on such date as determined in good faith by the Board shall be used. In the event the
Rights are listed or admitted to trading on a national securities exchange, the closing price for
any day shall be the last sale price, regular way, or, in case no such sale takes place on such
day, the average of the high bid and low asked prices, regular way, in either case as reported in
the principal consolidated transaction reporting system with respect to the national securities
exchange on which the Rights are listed or admitted to trading.
(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-thousandth 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-thousandth of a share
of Preferred Stock). In lieu of fractional shares of Preferred Stock that are not integral
multiples of one one-thousandth 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-thousandth of a
share of Preferred Stock. For purposes of this Section 14(b), the current market value of one
one-thousandth of a share of Preferred Stock shall be one one-thousandth 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 one of the events specified in Section 11 giving rise to the
right to receive Common Stock, common stock equivalents or other securities upon the exercise of a
Right, the Company shall not be required to issue fractions of shares of Common Stock, common stock
equivalents or other securities upon exercise of the Rights or to distribute certificates which
evidence fractional shares of Common Stock, common stock equivalents or other securities. In lieu
of fractional shares of Common Stock, common stock equivalents or other securities, 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, common stock
equivalents or other securities. 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 such holder’s 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, except the rights of action vested in the
Rights Agent pursuant to Section 18 and Section 19 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
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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 under, 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 such Right consents and agrees with the Company and the
Rights Agent and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights shall be transferable only in connection with
the transfer of the Common Stock;
(b) after the Distribution Date, the Rights Certificates shall be transferable only on the
registry books of the Rights Agent if surrendered at the office of the Rights Agent designated for
such purposes, duly endorsed or accompanied by a proper instrument of transfer and with the
appropriate form of assignment and the certificate contained therein duly completed and 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 the Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or
writing on the 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 affected by any notice
to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary, neither the Company nor the
Rights Agent shall have any liability to any holder of a Right or other Person as a result of its
inability to perform any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree, judgment or ruling (whether interlocutory or final)
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 shall use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as practicable.
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Section 17. Rights Certificate Holder Not Deemed a Stockholder.
No holder, as such, of any Rights Certificate shall be entitled to vote, to receive dividends
or to be deemed for any purpose the holder of the Preferred Stock or any other securities of the
Company which may at any time be issuable on the exercise of the Rights represented thereby, nor
shall anything contained herein or in any 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 25 hereof), or to receive
dividends or 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. Duties of Rights Agent.
The Rights Agent undertakes only the duties and obligations expressly imposed by this
Agreement upon the following terms and conditions, by all of which the Company and the holders of
Rights Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel of its selection (who may be legal counsel
for the Company), and the advice or opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent, and the Rights Agent shall incur no liability,
for or in respect of any action taken or omitted by it in good faith and in accordance with such
advice or opinion.
(b) Whenever in the performance of its duties under this Agreement the Rights Agent shall deem
it necessary or desirable that any fact or matter (including, without limitation, the identity of
any Acquiring Person and the determination of “current market price”) be proved or established by
the Company prior to taking or suffering or omitting to take any action hereunder, such fact or
matter (unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and established by a certificate signed by any
person believed by the Rights Agent to be any one of the Chief Executive Officer, President or
Chief Financial Officer of the Company and delivered to the Rights Agent; and such certificate
shall be full authorization to the Rights Agent, and the Rights Agent shall incur no liability, for
or in respect of any action taken, omitted or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own gross negligence, bad faith or
willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of the statements of fact or
recitals contained in this Agreement or in the Rights Certificates (except as to its
countersignature thereof) or be required to verify the same, but all such statements and recitals
are and shall be deemed to have been made by the Company only.
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(e) The Rights Agent is serving as an administrative agent and shall not be under any
responsibility in respect of the validity of any provision of this Agreement or the execution and
delivery of this Agreement (except the due execution hereof by the Rights Agent) or in respect of
the validity or execution of any Rights Certificate (except its countersignature thereof); nor
shall it be responsible for any breach by the Company of any covenant or condition contained in
this Agreement or in any Rights Certificate; nor shall it be responsible for any change in the
exercisability of the Rights (including the Rights becoming null and void pursuant to Section 7(e)
hereof) or any adjustment required under any of the provisions 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 the Rights Agent’s actual receipt of notice of 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 shares of Preferred Stock to be
issued pursuant to this Agreement or any Rights Certificate or as to whether any shares of Common
Stock or shares of Preferred Stock will, when so issued, be validly authorized and issued, fully
paid and non-assessable, nor shall the Rights Agent be responsible for the legality of the terms
hereof in its capacity as an administrative agent.
(f) The Company shall perform, execute, acknowledge and deliver or cause to be performed,
executed, acknowledged and delivered all such further and other acts, instruments and assurances as
may reasonably be required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept instructions with respect to
the performance of its duties hereunder from any person believed by the Rights Agent to be any one
of the Chairman of the Board, the Chief Executive Officer, President, or Chief Financial Officer of
the Company, and to apply to such officers for advice or instructions in connection with its
duties, and it shall not be liable for any action taken, omitted to be taken or suffered to be
taken by it in good faith in accordance with instructions of any such officer or for any delay in
acting while waiting for those instructions. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent, set forth in writing
any action proposed to be taken, suffered or omitted by the Rights Agent under this Agreement and
the date on or after which such action shall be taken or suffered or such omission shall be
effective. The Rights Agent shall not be liable for any action taken or suffered by, or omission
of, the Rights Agent in accordance with a proposal included in any such application on or after the
date specified in such application (which date shall not be less than five Business Days after the
date any officer of the Company actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to taking any such action (or the
effective date in the case of an omission), the Rights Agent shall have received written
instruction in response to such application specifying the action to be taken, suffered or omitted.
(h) The Rights Agent and any stockholder, affiliate, director, officer or employee of the
Rights Agent may buy, sell or deal in any of the Rights or other securities of the Company or
become pecuniarily interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely as
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though it were
not the Rights Agent under this Agreement. Nothing herein shall preclude the Rights Agent from
acting in any other capacity for the Company or for any other Person or legal entity.
(i) The Rights Agent may execute and exercise any of the rights or powers hereby vested in it
or perform any duty hereunder either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act, default, neglect or misconduct of
any such attorneys or agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct; provided, however, that the Rights Agent exercised
reasonable care in the selection and continued employment thereof.
(j) No provision of this Agreement shall require the Rights Agent to expend or risk its own
funds or otherwise incur any financial liability in the performance of any of its duties hereunder
or in the exercise of its rights if there shall be reasonable grounds for believing that repayment
of such funds or adequate indemnification against such risk or liability is not reasonably assured
to it.
(k) If, with respect to any Rights Certificate surrendered to the Rights Agent for exercise or
transfer, the certificate attached to the form of assignment or form of election to purchase, as
the case may be, has either not been properly 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 of transfer without first consulting with the Company.
Section 19. Compensation and Indemnification of the Rights Agent.
(a) The Company agrees to pay to the Rights Agent such compensation as shall be agreed to in
writing between the Company and the Rights Agent 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
expenses 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, its officers, employees, agents and directors for, and to
hold each of them harmless against, any loss, liability or expense, incurred without negligence,
bad faith or willful misconduct on the part of the Rights Agent, for any action taken, suffered or
omitted by the Rights Agent or such other indemnified party in connection with the acceptance and
administration of this Agreement and the exercise of its duties hereunder, including, but not
limited to, the costs and expenses of defending against any claim (whether asserted by the Company,
a holder of Rights, or any other Person) of liability in the premises. The indemnity provided for
hereunder shall survive the expiration of the Rights and the termination of this Agreement.
(b) The Rights Agent shall be authorized and protected and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection with its administration of
this Agreement or the exercise of its duties hereunder 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,
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direction, consent,
certificate, statement or other paper or document believed by it to be genuine and to be signed and
executed by the proper person or persons.
Section 20. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any Person into which the Rights Agent or any successor Rights Agent may be merged or with
which it may be consolidated, or any Person resulting from any merger or consolidation to which the
Rights Agent or any successor Rights Agent shall be a party, or any Person succeeding to all or
substantially all the stock transfer business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the execution or filing of
any paper or any further act on the part of any of the parties hereto; provided,
however, that such Person would be eligible for appointment as a successor Rights Agent
under the provisions of Section 21 hereof. In case at the time such successor Rights Agent shall
succeed to the agency created by this Agreement, any of the Rights Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the countersignature of
the predecessor Rights Agent and deliver such Rights Certificates so countersigned; and in case at
that time any of the Rights Certificates shall not have been countersigned, any successor Rights
Agent may countersign such Rights Certificates either in the name of the predecessor Rights Agent
or in the name of the successor Rights Agent; and in all such cases such Rights Certificates shall
have the full force provided in the Rights Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be changed and at any 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 21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and be discharged from its duties
under this Agreement upon thirty (30) days’ notice in writing mailed to the Company. 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 the 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 the Rights Agent or the registered holder of any Rights Certificate may, at the
expense of the Company, apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether
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appointed by the Company or by such a court,
shall be (i) a Person organized and doing business under the laws of the United States or the State
of Delaware or New York or Massachusetts (or of any other state of the United States so long as
such Person is authorized to do business in the States of Delaware, New York or Massachusetts), in
good standing, having an office in the States of Delaware, New York or Massachusetts, which is
authorized under such laws to exercise corporate trust power and is subject to supervision or
examination by federal or state authority and which has at the time of its appointment as Rights
Agent a combined capital and surplus of at least $50 million or (ii) an affiliate of such a Person.
After appointment, the successor Rights Agent shall be vested with the same powers, rights, duties
and responsibilities as if it had been originally named as Rights Agent without further act or
deed; but the predecessor Rights Agent shall deliver and transfer to the successor Rights Agent any
property at the time held by it hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later than the effective date of any such
appointment, the Company shall file notice thereof in writing with the predecessor Rights Agent and
each transfer agent of the Common Stock and the Preferred Stock, and, if such appointment occurs
after the Distribution Date, 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 the Board to reflect any adjustment or change in the Purchase Price per share and the
number or kind of 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 (other than
upon exercise of a Right) 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, 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 Certificates would be issued, and (ii) no such Rights Certificates 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 Review.
(a) The Board may, at its option, at any time during the period commencing on the Rights
Dividend Declaration Date and ending on the earlier of (i) the Close of Business on the tenth
Business Day following the Stock Acquisition Date (or, if the Stock Acquisition Date
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shall have
occurred prior to the Record Date, the Close of Business on the tenth Business Day following the
Record Date), or (ii) the Close of Business on the Final Expiration Date (the “Redemption
Period”), cause the Company to redeem all but not less than all the then outstanding Rights at
a redemption price of $.001 per Right, as such amount may be appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date hereof (such redemption
price being hereinafter referred to as the “Redemption Price”); provided,
however, that, if the Board authorizes redemption of the Rights on or after the time a
Person becomes an Acquiring Person, then such authorization shall require the concurrence of
two-thirds of the members of the Board. Notwithstanding anything contained in this Agreement to the
contrary, the Rights shall not be exercisable after the first occurrence of a Section 11(a)(ii)
Event or a Section 13 Event until such time as the Company’s right of redemption hereunder has
expired. The redemption of the Rights by the Board pursuant to this paragraph (a) may be made
effective at such time, on such basis and with such conditions as the Board in its sole discretion
may establish. The Company may, at its option, pay the Redemption Price in cash, shares of Common
Stock (based on the current market price of the Common Stock at the time of redemption) or any
other form of consideration deemed appropriate by the Board.
(b) Immediately upon the action of the Board 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 shall terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price. Promptly after the action of the Board
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 their last addresses as they appear upon the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent for the Common Stock;
provided, however, that the failure to give, or any defect in, any such notice
shall not affect the validity of such redemption. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice. Each such notice
of redemption shall state the method by which the payment of the Redemption Price will be made.
Section 24. Exchange.
(a) The Board may, at its option, at any time after any Person becomes an Acquiring Person,
exchange all or part of the then outstanding and exercisable Rights (which shall not include Rights
that have become null and void pursuant to the provisions of Section 7(e) hereof) for shares of
Common Stock at an exchange ratio of one share of Common Stock per each outstanding Right, as
appropriately adjusted to reflect any stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter referred to as the “Exchange
Ratio”). Notwithstanding the foregoing, the Board shall not be empowered to effect such
exchange at any time after any Person (other than the Company, any Subsidiary of the Company, any
employee benefit plan of the Company or any such Subsidiary, or any entity holding Common Stock for
or pursuant to the terms of any such employee benefit plan), together with all Affiliates and
Associates of such Person, becomes the Beneficial Owner of 50% or more of the Common Stock then
outstanding. The exchange of the Rights by the Board may be made
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effective at such time, on such
basis and with such conditions as the Board in its sole discretion may establish.
(b) Immediately upon the action of the Board ordering the exchange of any Rights pursuant to
subsection (a) of this Section 24 and without any further action and without any notice, the right
to exercise such Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock equal to the number of such Rights held
by such holder multiplied by the Exchange Ratio. The Company shall promptly give public notice of
any such exchange; provided, however, that the failure to give, or any defect in,
such notice shall not affect the validity of such exchange. The Company promptly shall mail a
notice of any such exchange to all of the holders of such Rights at their last addresses as they
appear upon the registry books of the Rights Agent. Any notice which is mailed in the manner
herein provided shall be deemed given, whether or not the holder receives the notice. Each such
notice of exchange shall state the method by which the exchange of Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of Rights that will be exchanged.
Any partial exchange shall be effected pro rata based on the number of Rights (other than Rights
which have become void pursuant to the provisions of Section 7(e) hereof) held by each holder of
Rights.
(c) In any exchange pursuant to this Section 24, the Company, at its option, may substitute
common stock equivalents (as defined in Section 11(a)(iii)) for shares of Common Stock exchangeable
for Rights, at the initial rate of one common stock equivalent for each share of Common Stock, as
appropriately adjusted to reflect adjustments in dividend, liquidation and voting rights of common
stock equivalents pursuant to the terms thereof, so that each common stock equivalent delivered in
lieu of each share of Common Stock shall have essentially the same dividend, liquidation and voting
rights as one share of Common Stock.
(d) In the event that there shall not be sufficient shares of Common Stock issued but not
outstanding or authorized but unissued to permit any exchange of Rights as contemplated in
accordance with this Section 24, the Company shall take all such action as may be necessary to
authorize additional shares of Common Stock for issuance upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of shares of Common Stock or to
distribute certificates which evidence fractional shares of Common Stock. In lieu of such
fractional shares, the Company shall pay to the registered holders of the Right Certificates with
regard to which such fractional shares would otherwise be issuable an amount in cash equal to the
same fraction of the current market value of a whole share of Common Stock. For the purposes of
this paragraph (e), the current market value of a whole share of Common Stock shall be the closing
price of a share of Common Stock (as determined pursuant to the second and the following sentences
of Section 11(d) hereof) for the Trading Day immediately prior to the date of exchange pursuant to
this Section 24.
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Section 25. 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 capital 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) 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
capital 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 Preferred Stock), or (iv) to effect any consolidation or merger into or
with, or to effect any sale or other transfer (or to permit one or more of its Subsidiaries to
effect any sale or other transfer), in one or more transactions, of more than 50% of the assets or
earning power of the Company and its Subsidiaries (taken as a whole) to, any other Person, 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 26 hereof, a notice of such proposed action, which shall specify the record
date for the purposes of such stock dividend, distribution of rights or warrants, or the date on
which such reclassification, consolidation, 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 Section 11(a)(ii) Event 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 26 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) 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 26. 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
sent by first-class mail, postage prepaid, addressed (until another address is filed in writing
with the Rights Agent) as follows:
Attention: President
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Subject to the provisions of Section 21 hereof, any notice or demand authorized by this Agreement
to be given or made by the Company or by the holder of any Rights Certificate to or on the Rights
Agent shall be sufficiently given or made if sent by first-class mail, postage prepaid, addressed
(until another address is filed in writing with the Company) as follows:
Continental Stock Transfer & Trust Co.
00 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Compliance Department
00 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Compliance Department
Notices or demands authorized by this Agreement to be given or made by the Company or the Rights
Agent to the holder of any Rights Certificate shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to any such holder at the address of such holder as
shown on the registry books of the Company.
Section 27. Supplements and Amendments.
Except as provided in the penultimate sentence of this Section 27, for so long as the Rights
are then redeemable, the Company may in its sole and absolute discretion, and the Rights Agent
shall if the Company so directs, supplement or amend any provision of this Agreement in any respect
without the approval of any holders of the Rights. At any time when the Rights are no longer
redeemable, except as provided in the penultimate sentence of this Section 27, the Company may, and
the Rights Agent shall, if the Company so directs, supplement or amend this Agreement without the
approval of any holders of Rights; provided, however, that no such supplement or
amendment may (a) adversely affect the interests of the holders of Rights as such (other than an
Acquiring Person or any Affiliate or Associate of an Acquiring Person), (b) cause this Agreement
again to become amendable other than in accordance with this sentence or (c) cause the Rights again
to become redeemable. Notwithstanding anything contained in this Agreement to the contrary, no
supplement or amendment shall be made which changes the
Redemption Price. Upon the delivery of a certificate from an appropriate officer of the Company
which states that the supplement or amendment is in compliance with the terms of this Section 27,
the Rights Agent shall execute such supplement or amendment; provided, however,
that any supplement or amendment that does not amend Section 18, 19, 20 or 21 hereof or this
Section 27 in a manner adverse to the Rights Agent shall become effective immediately upon
execution by the Company, whether or not also executed by the Rights Agent.
Section 28. Successors.
All the covenants and provisions of this Agreement by or for the benefit of the Company or the
Rights Agent shall bind and inure to the benefit of their respective successors and assigns
hereunder.
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Section 29. Determinations and Actions by the Board, Etc.
For all purposes of this Agreement, any calculation of the number of shares of Common Stock
outstanding at any particular time, including for purposes of determining the particular percentage
of such outstanding shares of Common Stock of which any Person is the Beneficial Owner, shall be
made in accordance with the last sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board (with, where specifically provided for herein, the
concurrence of two-thirds of the members of the Board) shall have the exclusive power and authority
to administer this Agreement and to exercise all rights and powers specifically granted to the
Board (with, where specifically provided for herein, the concurrence of two-thirds of the members
of the Board) or to the Company, or as may be necessary or advisable in the administration of this
Agreement, including, without limitation, the right and power to (i) interpret the provisions of
this Agreement, and (ii) make all determinations deemed necessary or advisable for the
administration of this Agreement (including without limitation a determination to redeem or not
redeem the Rights or to amend the Agreement). All such actions, calculations, interpretations and
determinations which are done or made by the Board (with, where specifically provided for herein,
the concurrence of two-thirds of the members of the Board) in good faith, shall be final,
conclusive and binding on the Company, the Rights Agent, the holders of the Rights and all other
Persons.
Section 30. 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, the 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, the registered holders of Common Stock). Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests of the holders of
shares of Common Stock.
Section 31. Severability.
If any term, provision, covenant or restriction of this Agreement is held by a court of
competent jurisdiction or other authority to be invalid, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement 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 determines in its good faith judgment that severing the invalid language from this
Agreement would materially and 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.
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Section 32. Governing Law.
This Agreement, each Right and each Rights Certificate issued hereunder shall be deemed to be
a contract made under the internal laws of the State of Delaware and for all purposes shall be
governed by and construed in accordance with the laws of such State.
Section 33. Counterparts.
This Agreement may be executed in any number of counterparts. It shall not be necessary that
the signature of or on behalf of each party appears on each counterpart, but it shall be sufficient
that the signature of or on behalf of each party appears on one or more of the counterparts. All
counterparts shall collectively constitute a single agreement. It shall not be necessary in any
proof of this Agreement to produce or account for more than a number of counterparts containing the
respective signatures of or on behalf of all of the parties.
Section 34. Descriptive Headings.
Descriptive headings of the several Sections of this Agreement are inserted for convenience
only and shall not control or affect the meaning or construction of any of the provisions
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Rights Agreement to be duly executed,
all as of the day and year first above written.
| DOUBLE-TAKE SOFTWARE, INC. |
||||
| By: | /s/ Xxxx Xxxxxxxxxx | |||
| Name: | Xxxx Xxxxxxxxxx | |||
| Title: | President and Chief Executive Officer | |||
| CONTINENTAL STOCK TRANSFER & TRUST COMPANY |
||||
| By: | /s/ Xxxxxxxxx Xxxxxxxx | |||
| Name: | Xxxxxxxxx Xxxxxxxx | |||
| Title: | Vice President | |||
Exhibit A
Certificate of Designation,
Preferences and Rights of
Series A Junior Participating Preferred Stock
Preferences and Rights of
Series A Junior Participating Preferred Stock
of
Pursuant to Section 151 of the General Corporation Law
of the State of Delaware
of the State of Delaware
I, Xxxx Xxxxxxxxxx, Chief Executive Officer and President of Double-Take Software, Inc.,
a corporation organized and existing under the General Corporation Law of the State of
Delaware (the “Corporation”), in accordance with the provisions of Section 103
thereof, DO HEREBY CERTIFY:
That pursuant to the authority conferred upon the Board of Directors by the Certificate
of Incorporation of the Corporation, on November 11, 2008, the said Board of Directors duly
adopted the following resolution creating a series of 100,000 shares of Preferred Stock
designated as Series A Junior Participating Preferred Stock:
RESOLVED, that pursuant to the authority vested in the Board of Directors of this
Corporation (the “Board”) in accordance with the provisions of its Restated
Certificate of Incorporation, a series of Preferred Stock of the Corporation be and it hereby
is created, and that the designation and amount thereof and the voting rights or powers,
preferences and relative, participating, optional and other special rights of the shares of
such series, and the qualifications, limitations or restrictions thereof are as follows:
Section 1. Designation and Amount. The shares of such series, par value $0.001
per share, shall be designated as “Series A Junior Participating Preferred Stock” and the
number of shares constituting such series shall be 100,000.
Section 2. Dividends and Distributions.
(A) Subject to the prior and superior rights of the holders of any shares of any series
of Preferred Stock ranking prior and superior to the shares of Series A Junior Participating
Preferred Stock with respect to dividends, the holders of shares of Series A Junior
Participating Preferred Stock shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose, quarterly dividends payable
in cash on the 15th day of January, April, July and October, in each year (each
such date being referred to herein as a “Quarterly Dividend Payment Date”), commencing
on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction
of a share of Series A Junior Participating Preferred Stock, in an amount per share (rounded
to the
nearest cent) equal to the greater of (a) $0.01 or (b) subject to the provision for
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adjustment
hereinafter set forth, 1,000 times the aggregate per share amount of all cash dividends, and
1,000 times the aggregate per share amount (payable in kind) of all non-cash dividends or
other distributions, other than a dividend payable in shares of common stock, par value $0.001
per share, of the Corporation (the “Common Stock”), or a subdivision of the
outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common
Stock, since the immediately preceding Quarterly Dividend Payment Date, or, with respect to
the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction
of a share of Series A Junior Participating Preferred Stock. In the event the Corporation
shall at any time after November 10, 2008 (the “Rights Declaration Date”) (i) declare
or pay any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the amount to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event under clause (b)
of the preceding sentence shall be adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or distribution on the Series A Junior
Participating Preferred Stock as provided in paragraph (A) above immediately after it declares
a dividend or distribution on the Common Stock (other than a dividend payable in shares of
Common Stock); provided that, in the event no dividend or distribution shall have been
declared on the Common Stock during the period between any Quarterly Dividend Payment Date and
the next subsequent Quarterly Dividend Payment Date, a dividend of $0.01 per share on the
Series A Junior Participating Preferred Stock shall nevertheless be payable on such subsequent
Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A
Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding
the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the
date of issue of such shares is prior to the record date set for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall begin to accrue from the date of
issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a
date after the record date for the determination of holders of shares of Series A Junior
Participating Preferred Stock entitled to receive a quarterly dividend and before such
Quarterly Dividend Payment Date, in either of which event such dividends shall begin to accrue
and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of Series A Junior Participating
Preferred Stock in an amount less than the total amount of such dividends at the time accrued
and payable on such shares shall be allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of Directors may fix a record date for the
determination of holders of shares of Series A Junior Participating Preferred Stock entitled
to receive payment of a dividend or distribution
declared thereon, which record date shall be no more than 30 days prior to the date fixed for
the payment thereof.
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Section 3. Voting Rights. The holders of shares of Series A Junior Participating
Preferred Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set forth, each share of Series A
Junior Participating Preferred Stock shall entitle the holder thereof to 1,000 votes on all
matters submitted to a vote of the stockholders of the Corporation. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each
such case the number of votes per share to which holders of shares of Series A Junior
Participating Preferred Stock were entitled immediately prior to such event shall be adjusted
by multiplying such number by a fraction the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such event.
(B) Except as otherwise provided by law, the holders of shares of Series A Junior
Participating Preferred Stock and the holders of shares of Common Stock shall vote together as
one class on all matters submitted to a vote of the stockholders of the Corporation.
(C) Except as set forth herein, holders of Series A Junior Participating Preferred Stock
shall have no special voting rights and their consent shall not be required (except to the
extent they are entitled to vote with holders of Common Stock as set forth herein) for taking
any corporate action.
Section 4. Certain Restrictions.
(A) Whenever dividends or distributions payable on the Series A Junior Participating
Preferred Stock as provided in Section 2 are not paid, thereafter and until such dividends and
distributions, whether or not declared, on shares of Series A Junior Participating Preferred
Stock outstanding shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends on, or make any other distributions on, or redeem or
purchase or otherwise acquire for consideration any shares of stock ranking junior (either as
to dividends or upon liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock; or
(ii) declare or pay dividends on, or make any other distributions on, any shares of stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Junior Participating Preferred Stock, except
dividends paid ratably on the Series A Junior Participating Preferred Stock and all such
parity stock on which dividends are payable in proportion to the total amounts to which the
holders of all such shares are then entitled; or
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(iii) redeem or purchase or otherwise acquire for consideration shares of any stock
ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up)
with the Series A Junior Participating Preferred Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for
shares of any stock of the Corporation ranking junior (either as to dividends or upon
dissolution, liquidation or winding up) to the Series A Junior Participating Preferred Stock;
or
(iv) purchase or otherwise acquire for consideration any shares of Series A Junior
Participating Preferred Stock, or any shares of stock ranking on a parity with the Series A
Junior Participating Preferred Stock, except in accordance with a purchase offer made in
writing or by publication (as determined by the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors, after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective series and classes,
shall determine in good faith will result in fair and equitable treatment among the respective
series or classes.
(B) The Corporation shall not permit any subsidiary of the Corporation to purchase or
otherwise acquire for consideration any shares of stock of the Corporation unless the
Corporation could, under paragraph (A) of this Section 4, purchase or otherwise acquire such
shares at such time and in such manner.
Section 5. Reacquired Shares. Any shares of Series A Junior Participating
Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after the acquisition thereof. All such shares shall
upon their cancellation become authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock to be created by resolution or resolutions
of the Board of Directors, subject to the conditions and restrictions on issuance set forth
herein.
Section 6. Liquidation, Dissolution or Winding Up.
(A) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock ranking junior
(either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior
Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior
Participating Preferred Stock shall have received $1,000 per share, plus any unpaid dividends
and distributions payable thereon, whether or not declared, to the date of such payment (the
“Series A Liquidation Preference”). Following the payment of the full amount of the
Series A Liquidation Preference, no additional distributions shall be made to the holders of
Series A Junior Participating Preferred Stock unless, prior thereto, the holders of
shares of Common Stock shall have received an amount per share (the “Common
Adjustment”) equal to the quotient obtained by dividing (i) the Series A Liquidation
Preference by (ii) 1,000 (as appropriately adjusted as set forth in subparagraph (C) below to
reflect such events as stock splits, stock dividends and recapitalizations with respect to the
Common Stock) (such number in clause (ii) immediately above being referred to as the
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“Adjustment Number”). Following the payment of the full amount of the Series A
Liquidation Preference and the Common Adjustment in respect of all outstanding shares of
Series A Junior Participating Preferred Stock and Common Stock, respectively, holders of
Series A Junior Participating Preferred Stock and holders of shares of Common Stock shall
receive their ratable and proportionate share of the remaining assets to be distributed in the
ratio of the Adjustment Number to one (1) with respect to such Preferred Stock and Common
Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets available to permit
payment in full of the Series A Liquidation Preference and the liquidation preferences of all
other series of preferred stock, if any, which rank on a parity with the Series A Junior
Participating Preferred Stock, then such remaining assets shall be distributed ratably to the
holders of such parity shares in proportion to their respective liquidation preferences. In
the event, however, that there are sufficient assets available to permit payment in full of
the Common Adjustment, then such remaining assets shall be distributed ratably to the holders
of Common Stock.
(C) In the event the Corporation shall at any time after the Rights Declaration Date
(i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the
outstanding Common Stock, or (iii) combine the outstanding Common Stock into a smaller number
of shares, then in each such case the Adjustment Number in effect immediately prior to such
event shall be adjusted by multiplying such Adjustment Number by a fraction the numerator of
which is the number of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall enter into
any consolidation, merger, combination or other transaction in which the shares of Common
Stock are exchanged for or changed into other stock or securities, cash and/or any other
property, then in any such case the shares of Series A Junior Participating Preferred Stock
shall at the same time be similarly exchanged or changed in an amount per share (subject to
the provision for adjustment hereinafter set forth) equal to 1,000 times the aggregate amount
of stock, securities, cash and/or any other property (payable in kind), as the case may be,
into which or for which each share of Common Stock is changed or exchanged. In the event the
Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on
Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock,
or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each
such case the amount set forth in the preceding sentence with respect to the exchange or
change of shares of Series A Junior
Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction the
numerator of which is the number of shares of Common Stock outstanding immediately after such
event and the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
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Section 8. Redemption. The Series A Junior Participating Preferred Stock shall
not be subject to redemption by the Corporation.
Section 9. Ranking. Notwithstanding anything contained herein to the contrary,
the Series A Junior Participating Preferred Stock shall rank junior to all other series of the
Corporation’s Preferred Stock as to voting rights, the payment of dividends and the
distribution of assets in liquidation, unless the terms of any such series shall provide
otherwise.
Section 10. Amendment. The Certificate of Incorporation of the Corporation shall
not be further amended in any manner which would materially alter or change the powers,
preferences or special rights of the Series A Junior Participating Preferred Stock so as to
affect them adversely without the affirmative vote of the holders of a majority of the
outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a
class.
Section 11. Fractional Shares. Series A Junior Participating Preferred Stock may
be issued in fractions of a share which shall entitle the holders, in proportion to such
holders fractional shares, to exercise voting rights, receive dividends, participate in
distributions and to have the benefit of all other rights of holders of Series A Junior
Participating Preferred Stock.
The effective time of this certificate shall be 4:00 p.m. on November 19, 2008.
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IN WITNESS WHEREOF, I have executed and subscribed this Certificate and do affirm the
foregoing as true under the penalties of perjury this ___ day of , 2008.
| Name: | ||||
| Title: Officer |
Attest:
Name:
|
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Title: |
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Exhibit B
SUMMARY OF RIGHTS TO PURCHASE
SERIES A JUNIOR PARTICIPATING
PREFERRED STOCK
SERIES A JUNIOR PARTICIPATING
PREFERRED STOCK
On November 10, 2008, the Board of Directors of Double-Take Software, Inc. (the “Company”)
declared a dividend distribution of one right (“Right”) for each outstanding share of common stock,
par value $0.001 per share (the “Common Stock”), of the Company, payable to stockholders of record
on December 1, 2008. Each Right, when exercisable, entitles the registered holder to purchase from
the Company one one-thousandth of a share of Series A Junior Participating Preferred Stock
(“Preferred Stock”) at a price of $30.00 per one one-thousandth share (the “Purchase Price”),
subject to adjustment. The description and terms of the Rights are set forth in a Rights Agreement
(the “Rights Agreement”) dated as of November 19, 2008, between the Company and Continental Stock
Transfer & Trust Company, as Rights Agent (the “Rights Agent”).
Initially, the Rights will be attached to all certificates representing shares of Common Stock
then outstanding, and no separate certificates evidencing the Rights will be distributed. The
Rights will separate from the Common Stock and a distribution of Rights Certificates (as defined
below) will occur upon the earlier to occur of (i) 10 days following a public announcement that a
person or group of affiliated or associated persons (an “Acquiring Person”) has acquired beneficial
ownership of 15% or more of the outstanding shares of Common Stock (with exceptions noted below and
set forth in the Rights Agreement), which includes for this purpose derivative or synthetic
arrangements having characteristics of a long position in the Company’s common stock (the “Stock
Acquisition Date”), or (ii) 10 business days (or such later date as the Board of Directors of the
Company may determine) following the commencement of, or the first public announcement of the
intention to commence, a tender offer or exchange offer the consummation of which would result in
the beneficial ownership by a person of 15% or more of the outstanding shares of Common Stock (the
earlier of such dates being called the “Distribution Date”).
Until the Distribution Date, (i) the Rights will be evidenced by the Common Stock
certificates, and will be transferred with and only with the Common Stock certificates, (ii) new
Common Stock certificates issued after December 1, 2008 upon transfer or new issuance of the Common
Stock 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 November 18, 2009, unless such date is extended, the Rights Agreement is terminated, or
the Rights are earlier redeemed or exchanged by the Company as described below. The Rights will
not be exercisable by a holder in any jurisdiction where the requisite
qualification to the issuance to such holder, or the exercise by such holder, of the Rights has not
been obtained or is not obtainable.
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As soon as practicable following the Distribution Date, separate certificates evidencing the
Rights (“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 evidence the Rights. Except as otherwise determined by the Board of Directors of the Company,
only shares of Common Stock issued prior to the Distribution Date will be issued with Rights.
In the event that a Person becomes the beneficial owner of 15% or more of the then outstanding
shares of Common Stock (with exceptions noted below and set forth in the Rights Agreement), except
pursuant to an offer for all outstanding shares of Common Stock which the Directors determine to be
fair to and otherwise in the best interests of the Company and its stockholders (a “Qualifying
Offer”), each holder of a Right will, after the end of a redemption period referred to below,
have the right to exercise the Right by purchasing, for an amount equal to the Purchase Price,
Common Stock (or, in certain circumstances, cash, property or other securities of the Company)
having a value equal to two times such amount. Notwithstanding any of the foregoing, following the
occurrence 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
will be null and void. However, Rights are not exercisable following the occurrence 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 a Purchase Price of $30.00 per Right, each Right not owned by an Acquiring
Person (or by certain related parties) following an event set forth in the preceding paragraph
would entitle its holder to purchase $60.00 worth of Common Stock (or other consideration, as noted
above) for $30.00. Assuming that the Common Stock had a per share value of $15.00 at such time,
the holder of each valid Right would be entitled to purchase four shares of Common Stock for
$30.00.
In the event that at any time following the Stock Acquisition Date, (i) the Company is
acquired in a merger or other business combination transaction (other than a merger that follows a
Qualifying Offer), or (ii) 50% or more of the Company’s assets or earning power is sold or
transferred, each holder of a Right (except Rights which previously have been voided as set forth
above) shall, after the expiration of the redemption period referred to below, have the right to
receive, upon exercise, common stock of the acquiring company having a value equal to two times the
Purchase Price of the Right (e.g., common stock of the acquiring company having a value of
$60.00 for the $30.00 Purchase Price).
At any time after a person or group of affiliated or associated persons becomes an Acquiring
Person and prior to the acquisition by such person of 50% or more of the outstanding Common Stock,
the Board of Directors of the Company may exchange the Rights (other than Rights owned by such
person or group which have become void), in whole or in part, at an exchange ratio of one share of
Common Stock (or, in certain circumstances, other equity
securities of the Company that are deemed by the Board of Directors of the Company to have the same
value as shares of Common Stock) per Right (subject to adjustment).
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The Purchase Price payable, and the number of one one-thousandths of a share 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 under certain circumstances.
With certain exceptions, no adjustment in the Purchase Price will be required until cumulative
adjustments require an adjustment of at least 1% in such Purchase Price. No fractional shares will
be issued (other than fractions which are integral multiples of one one-thousandth of a share of
Preferred Stock) 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 Board of Directors of the Company, may cause the Company to redeem the Rights
in whole, but not in part, at any time during the period commencing on December 1, 2008 and ending
on the tenth business day following the Stock Acquisition Date (the “Redemption Period”) at a price
of $0.001 per Right (payable in cash, Common Stock or other consideration deemed appropriate by the
Board of Directors of the Company). Under certain circumstances set forth in the Rights Agreement,
the decision to redeem the Rights will require the concurrence of two-thirds of the members of the
Board of Directors. After the Redemption Period has expired, the Company’s right of redemption may
be reinstated if an Acquiring Person reduces his beneficial ownership to 15% or less 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. Immediately upon the action of the Board of
Directors of the Company ordering redemption of the Rights, the Rights will terminate and the only
right of the holders of Rights will be to receive the $0.001 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 subject to federal taxation to stockholders or to the
Company, stockholders may, depending upon the circumstances, recognize taxable income in the event
that the Rights become exercisable for Common Stock (or other consideration) of the Company or for
common stock of the acquiring company as set forth above.
Except with respect to the Redemption Price of the Rights, 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 of
Directors of the Company in order to cure any ambiguity, defect or inconsistency or to make changes
which do not adversely affect the interests of holders of Rights (excluding the interests of any
Acquiring Person), or to shorten or lengthen any time period under the Rights Agreement;
provided however, no amendment to adjust the time period governing redemption may
be made at such time as the Rights are not redeemable.
The Rights have certain anti-takeover effects. The Rights will cause substantial dilution to
a person or group that attempts to acquire the Company without conditioning the offer
on a substantial number of Rights being acquired, or in a manner or on terms not approved by the
Board of Directors of the Company. The Rights, however, should not deter any prospective offeror
willing to negotiate in good faith with the Board of Directors of the Company, nor should
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the
Rights interfere with any merger or other business combination approved by the Board of Directors
of the Company.
With respect to ABS Capital Partners IV, LLC and its affiliates, the Rights Agreement provides
that 20% is used in place of 15% for purposes of the measurement of beneficial ownership referred
to in the description above.
A copy of the Rights Agreement has been filed with the Securities and Exchange Commission as
an exhibit to a Current Report on Form 8-K. A copy of the Rights Agreement is also 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 hereby incorporated
herein by reference.
* * *
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Exhibit C
[Form of Rights Certificate]
Certificate No. R- Rights
NOT EXERCISABLE AFTER NOVEMBER 18, 2009 OR EARLIER IF REDEEMED OR EXCHANGED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT $.001 PER RIGHT ON
THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS
BENEFICIALLY OWNED BY AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF ANY SUCH PERSON
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT HOLDER OF SUCH
RIGHTS MAY BECOME NULL AND VOID. THE RIGHTS SHALL NOT BE EXERCISABLE, AND SHALL BE VOID SO
LONG AS HELD, BY A HOLDER IN ANY JURISDICTION WHERE THE REQUISITE QUALIFICATION TO THE
ISSUANCE TO SUCH HOLDER, OR THE EXERCISE BY SUCH HOLDER, OF THE RIGHTS IN SUCH JURISDICTION
SHALL NOT HAVE BEEN OBTAINED OR BE OBTAINABLE. [THE RIGHTS REPRESENTED BY THIS RIGHTS
CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING
PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE DEFINED IN
THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS CERTIFICATE AND THE RIGHTS REPRESENTED
HEREBY MAY BECOME NULL AND VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.] *
| * | The portion of the legend in brackets shall be inserted only if applicable and shall replace the preceding sentence. |
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Rights Certificate
Double-Take Software, Inc.
Double-Take Software, Inc.
This certifies that , or its 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 November 19, 2008, as the same may be amended from time to time (the “Rights
Agreement”), between Double-Take Software, Inc., a Delaware corporation (the
“Company”), and Continental Stock Transfer & Trust Company, a New York corporation,
(the “Rights Agent”), to purchase from the Company at any time prior to November 18,
2009 at the office or offices of the Rights Agent designated for such purpose, or its
successors as Rights Agent, one one-thousandth of a fully paid, non-assessable share of Series
A Junior Participating Preferred Stock, par value $0.001 per share (the “Preferred
Stock”) of the Company, at a purchase price of $[ ] per one
one-thousandth share (the “Purchase Price”), upon presentation and surrender of this
Rights Certificate with the Form of Election to Purchase and related Certificate duly
executed. 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 [ ], based
on the Preferred Stock as constituted at such date, and are subject to adjustment upon the
happening of certain events as provided in the Rights Agreement. Capitalized terms used but
not defined herein shall have the meanings ascribed to such terms in the Rights Agreement.
From and after the occurrence of an event described in Section 11(a)(ii) of the Rights
Agreement, the Rights evidenced by this Rights Certificate beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate of any such Person (as such terms are defined in
the Rights Agreement), which the Board, in its sole discretion, determines is or was involved
in or caused or facilitated, directly or indirectly (including through any change in the
Board), such Section 11(a)(ii) Event, (ii) a transferee of any such Acquiring Person,
Associate or Affiliate, or (iii) under certain circumstances specified in the Rights
Agreement, a transferee of a Person who, concurrently with or after such transfer, became an
Acquiring Person or an Affiliate or Associate of an Acquiring Person 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.
The Rights evidenced by this Rights Certificate shall not be exercisable, and shall be
void so long as held, by a holder in any jurisdiction where the requisite qualification to the
issuance to such holder, or the exercise by such holder, of the Rights in such jurisdiction
shall not have been obtained or be obtainable.
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.
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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 on file at the above-mentioned office of the Rights Agent and are also available
upon written request to the Rights Agent.
This Rights Certificate, with or without other Rights Certificates, upon surrender at the
office or offices of the Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of one one-thousandths 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 Board at its option at a redemption price of $0.001 per
Right at any time during the period commencing on the Rights Dividend Declaration Date and
ending on the earlier of (i) 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
(ii) the Close of Business on the Final Expiration Date. Under certain circumstances set
forth in the Rights Agreement, the decision to redeem shall require the concurrence of
two-thirds of the members of the Board. After the expiration of the Redemption Period, the
Company’s right of redemption may be reinstated if the Acquiring Person reduces its beneficial
ownership to 15% or less of the outstanding shares of Common Stock in a transaction or series
of transactions not involving the Company, and such reinstatement is approved by two-thirds of
the members of the Board.
At any time after a Person becomes an Acquiring Person and prior to the acquisition by
such Person of 50% or more of the outstanding Common Stock, the Board may exchange the Rights
(other than Rights owned by such Acquiring Person which have become void), in whole or in
part, at an exchange ratio of one share of Common Stock per Right each outstanding Right or,
in certain circumstances, other equity securities of the Company which are deemed by the Board
to have the same value as shares of Common stock, subject to adjustment.
No fractional shares of Preferred Stock will be issued upon the exercise of any Right or
Rights evidenced hereby (other than fractions which are integral multiples of one
one-thousandth of a share of Preferred Stock, which may, at the election of the
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Company, be evidenced by depositary receipts), but in lieu thereof a cash payment will be
made, as provided in the Rights Agreement.
No holder of this 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: | Double-Take Software, Inc. | |||||||||
| By: | ||||||||||
| Name: | ||||||||||
| Title: | ||||||||||
Countersigned:
By: |
||||
| Authorized Signature | ||||
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[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if
such holder desires to transfer the
Rights Certificate.)
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:
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Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) this Rights Certificate [ ] is [ ] is not being sold, assigned and transferred by
or on behalf of a Person who is or was an Acquiring Person or an Affiliate or Associate of 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 or an Affiliate or Associate of any such Person.
Dated: , |
||||
| Signature |
Signature Guaranteed:
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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.
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FORM OF ELECTION TO PURCHASE
(To be executed if the registered holder
desires to exercise Rights represented
by the Rights Certificate.)
desires to exercise Rights represented
by the Rights Certificate.)
To:
The undersigned hereby irrevocably elects to exercise Rights
represented by this Rights Certificate to purchase the shares of Preferred Stock issuable upon
the exercise of the Rights (or such other securities of the Company or of any other Person
which may be issuable upon the exercise of the Rights) and requests that certificates for such
shares be issued in the name of and delivered to:
(Please print name and address)
Please insert social security
or other identifying number:
or other identifying number:
If such number of Rights shall not be all the Rights evidenced by this Rights
Certificate, a new Rights Certificate for the balance of such Rights shall be registered in
the name of and delivered to:
Please insert social security
or other identifying number:
or other identifying number:
Dated: ,
| Signature |
Signature Guaranteed:
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Certificate
The undersigned hereby certifies by checking the appropriate boxes that:
(1) the Rights evidenced by this Rights Certificate [ ] are [ ] are not being
exercised by or on behalf of a Person who is or was an Acquiring Person or an Affiliate or
Associate of any such Person (as such terms are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned, it [ ] did [ ] did
not acquire the Rights evidenced by this Rights Certificate from any Person who is, was or
became an Acquiring Person or an Affiliate or Associate of any such Person.
Dated: , 20 |
||||
| Signature |
Signature Guaranteed:
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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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