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EXHIBIT 4.12
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Z-TEL TECHNOLOGIES, INC.
AND
AMERICAN STOCK TRANSFER & TRUST COMPANY
RIGHTS AGENT
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RIGHTS AGREEMENT
DATED AS OF FEBRUARY 19, 2001
AS AMENDED JULY 2, 2001
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RIGHTS AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of February 19, 2001 and
amended July 2, 2001, between Z-TEL TECHNOLOGIES, INC., a Delaware corporation
(the "Company"), and AMERICAN STOCK TRANSFER & TRUST COMPANY, a New York
corporation, as rights agent (the "Rights Agent");
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company has (i) authorized and
declared a dividend distribution of one preferred share purchase right (a
"Right") for each Common Share (as defined herein) outstanding as of the Close
of Business (as defined herein) on March 7, 2001 (the "Record Date") and a
dividend distribution for each share of Series D Preferred Stock and Series E
Preferred Stock (each as defined below) of such number of Rights as would be
received by a holder of the number of Common Shares for which such share of
Series D Preferred Stock or Series E Preferred Stock is convertible on the
Record Date, each Right initially representing the right to purchase one
one-thousandth of a Junior Preferred Share (as defined herein), upon the terms
and subject to the conditions set forth in this Agreement, and (ii) further
authorized the issuance of one (as such number may hereinafter be adjusted
pursuant to the provisions of Section 11(p)) Right with respect to each Common
Share and each share of Series D Preferred Stock, Series E Preferred Stock and
Series G Preferred Stock, in each case that shall become outstanding between the
Record Date and the earliest of the Distribution Date, the Expiration Date or
the Final Expiration Date (each such term as defined in this Agreement).
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NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement,
the following terms have the meanings indicated:
(a) "Acquiring Person" shall mean any Person who or
which, together with all Affiliates and Associates of such Person, shall be the
Beneficial Owner of 15% or more of the Voting Power of the Common Shares of the
Company then outstanding; provided, however, that:
(i) the term "Acquiring Person" shall not
include an Exempt Person (so long as such Person remains an Exempt Person);
(ii) a Person shall not be deemed to have become
an "Acquiring Person" solely as a result of the acquisition by the Company of
shares of capital stock of the Company which, by reducing the number or Voting
Power of shares outstanding, increases the Voting Power of the shares
beneficially owned by such Person to 15% or more of the Voting Power of the
Common Shares; provided, however, that if a Person shall so become the
Beneficial Owner of Common Shares of the Company representing 15% or more of the
Voting Power of the Common Shares of the Company then outstanding by reason of
the acquisition by the Company of shares of capital stock of the Company and
shall, after such share purchases by the Company, purchase or otherwise take
action to cause it to become the Beneficial Owner of any additional Common
Shares of the Company, then such Person shall be an Acquiring Person;
(iii) a Person shall not be deemed to have become
an "Acquiring Person" if the Board of Directors of the Company in its good faith
judgment determines that a Person has inadvertently become the Beneficial Owner
of Common Shares of the Company that would otherwise cause such Person to become
an Acquiring Person and the Board of Directors in
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its sole discretion provides such Person with a designated period to divest a
sufficient number of shares so that such Person no longer is the Beneficial
Owner of Common Shares of the Company that would otherwise cause such Person to
be an Acquiring Person, and such Person has so divested such shares at the end
of any such designated period and has not acquired any additional shares of
capital stock of the Company prior to the end of such designated period; and
(iv) Common Shares of the Company Beneficially
Owned by the Company or any Subsidiary of the Company shall not be considered
outstanding for purposes of calculating any Person's percentage ownership of the
Voting Power of the outstanding Common Shares of the Company.
(b) "Adjustment Shares" shall have the meaning set forth
in Section 11(a)(ii).
(c) "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.
(d) A Person shall be deemed the "Beneficial Owner" of
and shall be deemed to "Beneficially Own" any securities:
(i) which such Person or any of such Person's
Affiliates or Associates 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 (other than customary agreements with and between underwriters and
selling group members with respect to a bona fide public offering of
securities), or upon the exercise of conversion rights, exchange rights, rights
(other than the Rights),
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warrants or options, or otherwise; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of or to "Beneficially Own" securities tendered
pursuant to a tender or exchange offer made by or on behalf of such Person or
any of such Person's Affiliates or Associates pursuant to, and in accordance
with the General Rules and Regulations promulgated under the Exchange Act, until
such tendered securities are accepted for purchase or exchange; or (B) the right
to vote or dispose of or "beneficial ownership" (as defined in Rule 13d-3 of the
General Rules and Regulations under the Exchange Act as in effect on the date of
this Agreement) of (including pursuant to any agreement, arrangement or
understanding, whether or not in writing); provided, however, that a Person
shall not be deemed the "Beneficial Owner" of or to "Beneficially Own" any
securities if the agreement, arrangement or understanding to vote such security
(1) arises solely from a revocable proxy or consent given to such Person in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the General Rules and Regulations under the Exchange Act, (2)
is not also then reportable by such Person on Schedule 13D under the Exchange
Act (or any comparable or successor report) and (3) does not constitute a trust,
proxy, power of attorney or other device with the purpose or effect of allowing
two or more persons, acting in concert, to avoid being deemed "Beneficial
Owners" of such security or otherwise avoid the status of "Acquiring Person"
under the terms of this Agreement or as part of a plan or scheme to avoid the
reporting requirements under Schedule 13D or Sections 13(d) or 13(g) of the
Exchange Act; or
(iii) which are beneficially owned, directly or indirectly,
by any other Person (or any Affiliates or Associates thereof) with which such
Person or any of such Person's Affiliates or Associates has any agreement,
arrangement or understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except as described in the proviso to
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clause (B) of subparagraph (ii) of this Section 1(d)) or disposing of any
securities of the Company.
Notwithstanding anything in this definition of Beneficial Ownership to
the contrary, the phrase "then outstanding," when used with reference to a
Person's Beneficial Ownership of securities of the Company, shall mean the
number of such securities then issued and outstanding together with the number
of such securities not then actually issued and outstanding which such Person
would be deemed to Beneficially Own under this Agreement.
(e) "Business Day" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in the State of
Delaware or the State of Florida 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., Tampa, Florida time, on such date; provided, however, that if such date is
not a Business Day it shall mean 5:00 P.M., Tampa, Florida time, on the next
succeeding Business Day.
(g) "Common Shares," when used with reference to the
Company, shall mean shares of the common stock, par value $.01 per share, of the
Company. "Common Shares," when used with reference to any Person other than the
Company, shall mean the capital stock or other equity interests with the
greatest per share or per unit voting power of such other Person or, if such
other Person is a Subsidiary of or is controlled by another Person, the Person
or Persons which ultimately control such first-mentioned Person.
(h) "Common Share Equivalents" shall have the meaning set
forth in Section 11(a)(iii).
(i) "Current Market Price" shall have the meaning set
forth in Section 11(d).
(j) "Current Value" shall have the meaning set forth in
Section 11(a)(iii).
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(k) "Distribution Date" shall have the meaning set forth
in Section 3(a).
(l) "Equivalent Preferred Share" shall have the meaning
set forth in Section 11(b).
(m) "Exchange Act" shall mean the Securities Exchange Act
of 1934, as amended.
(n) "Exchange Ratio" shall have the meaning set forth in
Section 24(a).
(o) "Exempt Person" shall mean (i) the Company, (ii) any
Subsidiary of the Company, (iii) any employee benefit plan of the Company or of
any Subsidiary of the Company, (iv) any Person or entity organized, appointed,
established or holding Common Shares of the Company for or pursuant to the terms
of any such employee benefit plan, (v) D. Xxxxxxx Xxxxx, Xxxxx Xxxx Xxxxx, G/CJ
Investments, L.P., a Delaware limited partnership, and G/CJ Investments, Inc., a
Delaware corporation, and their respective Affiliates and Associates, and (vi)
Xxxxx Brothers Xxxxxxxx & Co., The 1818 Fund III L.P., T. Xxxxxxx Xxxx and
Xxxxxxxx X. Xxxxxx and their respective Affiliates and Associates (collectively,
the "BBH Parties"), provided that no BBH Party shall be an Exempt Person (A) if
after the date hereof, the BBH Parties, individually or collectively, acquire in
one or more transactions (whether related or unrelated) additional Beneficial
Ownership of Common Shares (other than (i) the acquisition, Beneficial Ownership
or exercise of one or more Series E Warrants or Series G Warrants, or of the
Common Shares acquired upon exercise of any Series E Warrant or Series G
Warrant, (ii) the acquisition, Beneficial Ownership or conversion of shares of
Series E Preferred Stock or Series G Preferred Stock, or of the Common Shares
acquired upon conversion of any Series E Preferred Stock or Series G Preferred
Stock, (iii) otherwise pursuant to, in connection with or as contemplated by the
Series E Purchase Agreement or Series G Investment Agreement or (iv) the
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acquisition, Beneficial Ownership or exercise of Common Shares or options
granted under the Company's 2000 Equity Participation Plan, or of the Common
Shares acquired upon exercise of any such option) of the Company representing
more than 1% of the outstanding Common Shares of the Company, or (B) from and
after such time as the BBH Parties collectively no longer Beneficially Own 15%
or more of the Voting Power of the outstanding Common Shares of the Company.
(p) "Expiration Date" shall have the meaning set forth in
Section 7(a).
(q) "Final Expiration Date" shall have the meaning set
forth in Section 7(a).
(r) "Junior Preferred Shares" shall mean shares of Series
F Junior Participating Preferred Stock, par value $.001 per share, of the
Company, having the rights, preferences and limitations set forth in the
Certificate of Designations attached to this Agreement as Exhibit A, and, to the
extent there are not a sufficient number of shares of Series F Junior
Participating Preferred Stock authorized to permit the full exercise of the then
outstanding Rights, any other series of preferred stock of the Company
designated for such purpose by the Board of Directors of the Company containing
terms substantially similar to the terms of the Series F Junior Participating
Preferred Stock.
(s) "Nasdaq National Market" shall have the meaning set
forth in Section 9(b).
(t) "Person" shall mean any individual, firm,
corporation, partnership or other entity, and shall include any successor (by
merger or otherwise) of such entity.
(u) "Principal Party" shall have the meaning set forth in
Section 13(b).
(v) "Purchase Price" shall have the meaning set forth in
Section 4(a).
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(w) "Record Date" shall have the meaning set forth in the
recitals clause at the beginning of this Agreement.
(x) "Redemption Date" shall mean the date on which the
Rights are redeemed as provided in Section 23.
(y) "Redemption Price" shall have the meaning set forth
in Section 23(a).
(z) "Rights" shall have the meaning set forth in the
recitals clause at the beginning of this Agreement.
(aa) "Rights Certificates" shall have the meaning set
forth in Section 3(a).
(bb) "Section 11(a)(ii) Event" shall have the meaning set
forth in Section 11(a)(ii).
(cc) "Section 11(a)(ii) Trigger Date" shall have the
meaning set forth in Section 11(a)(iii).
(dd) "Section 13 Event" shall mean any event described in
clause (x), (y) or (z) of Section 13(a).
(ee) "Securities Act" shall mean the Securities Act of
1933, as amended.
(ff) "Series D Preferred Stock" shall mean the Series D
Convertible Preferred Stock, par value $.01 per share, of the Company.
(gg) "Series E Preferred Stock" shall mean the Series E
Convertible Preferred Stock, par value $.01 per share, of the Company.
(hh) "Subsidiary" of a Person shall mean any corporation
or other entity of which securities or other ownership interests having ordinary
voting power sufficient to elect a majority of the board of directors or other
persons performing similar functions are Beneficially Owned, directly or
indirectly, or otherwise controlled by such Person.
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(ii) "Substitution Period" shall have the meaning set
forth in Section 11(a)(iii).
(jj) "Summary of Rights" shall have the meaning set forth
in Section 3(b).
(kk) "Trading Day" shall have the meaning set forth in
Section 11(d).
(ll) "Triggering Event" shall mean any Section 11(a)(ii)
Event or Section 13 Event.
(mm) "Voting Power" shall mean the total number of votes
entitled to be cast generally by the holders of the Common Shares of the Company
then outstanding.
(nn) "Series E Purchase Agreement" shall mean that certain
Purchase Agreement, dated as of October 19, 2000, by and among the Company and
The 1818 Fund III, L.P.
(oo) "Series E Warrant" shall mean a warrant to purchase
Common Shares granted or issues pursuant to the Series E Purchase Agreement.
(pp) "Series G Investment Agreement" shall mean that
certain Stock And Warrant Purchase Agreement dated July 2, 2001 by and among the
Company, The 1818 Fund III, L.P. and certain additional investors listed on
Schedule 1 thereto.
(qq) "Series G Preferred Stock" shall mean the 12% Junior
Redeemable Convertible Preferred Stock, Series G, par value $.01 per share, of
the Company.
(rr) "Series G Warrant" shall mean a warrant to purchase
Common Shares granted or issues pursuant to the Series G Investment Agreement.
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, shall prior to the Distribution Date
also be the holders of the Common Shares of the
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Company or the Series D Preferred Stock, Series E Preferred Stock or Series G
Preferred Stock, as the case may be) in accordance with the terms and conditions
of this Agreement, and the Rights Agent hereby accepts such appointment. The
Company from time to time may appoint such co-Rights Agents as it may deem
necessary or desirable. If the Company appoints one or more co-Rights Agents,
the respective duties of the Rights Agent and any co-Rights Agents shall be as
the Company shall determine.
Section 3. Issuance of Rights Certificates.
(a) Until the earlier of (i) the first public
announcement (which for this purpose 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 if such
announcement occurs before the Record Date, the Close of Business on the Record
Date); provided, however, that if such Person is determined not to have become
an Acquiring Person pursuant to Section 1(a), then no such Distribution Date
shall be deemed to have occurred; or (ii) the Close of Business on the tenth
Business Day (or such later date as may be determined by action of the Board of
Directors of the Company prior to such time as any Person becomes an Acquiring
Person) after the date of the commencement by any Person (other than an Exempt
Person) of, or of the first public announcement of the intent of any Person
(other than an Exempt Person) to commence, a tender or exchange offer the
consummation of which would result in any Person, together with its Affiliates
and Associates, becoming the Beneficial Owner of 15% or more of the Voting Power
of the then outstanding Common Shares of the Company (irrespective of whether
any shares are actually purchased pursuant to such offer) (the earlier of such
events described in clauses (i) and (ii) being referred to in this Agreement as
the "Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(c)) by the certificates for
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the Common Shares or the Series D Preferred Stock, Series E Preferred Stock or
Series G Preferred Stock, as the case may be, registered in the names of the
holders thereof (which certificates for such Common Shares of the Company or the
Series D Preferred Stock, Series E Preferred Stock or Series G Preferred Stock,
as the case may be, shall be deemed also to be certificates for such Rights
other than for purposes of this Section 3 and any provision of this Agreement
referring to the issuance or distribution of Rights Certificates) and not by
separate Rights Certificates, and (y) the Rights (and the right to receive
separate Rights Certificates) will be transferable only in connection with the
transfer of the underlying Common Shares of the Company or the Series D
Preferred Stock, Series E Preferred Stock or Series G Preferred Stock (including
a transfer to the Company). As soon as practicable after the Distribution Date,
the Company will prepare and execute, the Rights Agent will countersign, and the
Company will send or cause to be sent (and the Rights Agent will, if requested,
send) by first class, insured, postage prepaid mail, to each record holder of
Common Shares, Series D Preferred Stock, Series E Preferred Stock and Series G
Preferred Stock, as of the Close of Business on the Distribution Date, as shown
by the records of the Company, at the address of such holder shown on such
records, one or more rights certificates in substantially the form of Exhibit B
hereto, evidencing one Right for each Common Share and an appropriate number of
Rights for each share of Series D Preferred Stock, Series E Preferred Stock and
Series G Preferred Stock (a "Rights Certificate"), so held, subject to
adjustment as provided in this Agreement. As of and after the Distribution Date,
the Rights will be evidenced solely by such Rights Certificates and will be
transferable separately from the Common Shares of the Company, the Series D
Preferred Stock, Series E Preferred Stock and Series G Preferred Stock.
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(b) As promptly as practicable following the Record Date,
the Company will send a copy of a Summary of Rights to Purchase Preferred
Shares, substantially in the form attached hereto as Exhibit C ("Summary of
Rights"), by first-class, postage prepaid mail, to each record holder of Common
Shares of the Company and Series D Preferred Stock and Series E Preferred Stock
as of the Close of Business on the Record Date, at the address of such holder
shown on the records of the Company. The Rights Agent will mail to any holder of
the Rights Certificate a copy of this Agreement without charge to the holder but
at the expense of the Company after receipt of a written request therefor.
(c) With respect to certificates for Common Shares of the
Company, Series D Preferred Stock and Series E Preferred Stock outstanding as of
the Close of Business on the Record Date, until the Distribution Date (or, if
earlier, the Expiration Date or the Final Expiration Date), the Rights will be
evidenced by certificates for Common Shares of the Company or the Series D
Preferred Stock or Series E Preferred Stock, as the case may be, registered in
the names of the holders thereof together with a copy of the Summary of Rights.
Until the Distribution Date (or, if earlier, the Expiration Date or Final
Expiration Date), the surrender for transfer of any certificate for Common
Shares of the Company or Series D Preferred Stock or Series E Preferred Stock
(including pursuant to the conversion of such Series D Preferred Stock or Series
E Preferred Stock into Common Shares of the Company) outstanding on the Record
Date, with or without a copy of the Summary of Rights, also shall constitute the
surrender for transfer of the Rights associated with the Common Shares of the
Company, Series D Preferred Stock or Series E Preferred Stock represented
thereby; it being agreed that in the case of the conversion of such Series D
Preferred Stockor Series E Preferred Stock into Common Shares of the Company, in
accordance with this Agreement there shall be issued one Right with
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respect to each Common Share that shall be issued upon such conversion (as such
number may hereinafter be adjusted pursuant to the provisions of Section 11(p)).
(d) Rights shall be issued in respect of all Common
Shares of the Company or Series D Preferred Stock, Series E Preferred Stock or
Series G Preferred Stock (including upon the exercise of conversion rights
(including pursuant to the conversion of the Series D Preferred Stock, Series E
Preferred Stock or Series G Preferred Stock into Common Shares), exchange
rights, rights (other than the Rights), warrants or options, or otherwise) which
are issued (whether originally issued or from the Company's treasury) after the
Record Date but prior to the earliest of the Distribution Date, the Expiration
Date or the Final Expiration Date. Until the Distribution Date, certificates
representing Common Shares, Series D Preferred Stock, Series E Preferred Stock
or Series G Preferred Stock also shall be deemed to be certificates for the
associated Rights, and shall have impressed on, printed on, written on or
otherwise affixed to them substantially the following legend:
This certificate also evidences and entitles the
holder hereof to certain Rights as set forth in a
Rights Agreement between Z-Tel Technologies, Inc.
and American Stock Transfer & Trust Company, as
Rights Agent, dated as of February 19, 2001, as
amended (the "Rights Agreement"), the terms of which
are incorporated herein by reference and a copy of
which is on file at the principal executive offices
of Z-Tel Technologies, Inc. Under certain
circumstances, as set forth in the Rights Agreement,
such Rights will be evidenced by separate
certificates and will no longer be evidenced by this
certificate. Z-Tel Technologies, Inc. will 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 by it of a written
request therefor. Under certain circumstances as
provided in the Rights Agreement, Rights issued to,
held by or Beneficially Owned by Acquiring Persons
or their Associates or Affiliates (as such terms are
defined in the Rights Agreement) or any subsequent
holder of such Rights will become null and void.
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With respect to such certificates containing the foregoing legends, the Rights
associated with the Common Shares of the Company, Series D Preferred Stock,
Series E Preferred Stock or Series G Preferred Stock represented by such
certificates, as the case may be, shall, until the earliest of the Expiration
Date, the Final Expiration Date or the Distribution Date, be evidenced by such
certificates alone and holders of record of Common Shares of the Company, Series
D Preferred Stock, Series E Preferred Stock or Series G Preferred Stock, as the
case may be, also shall be the holders of record of the associated Rights, and
the surrender for transfer of any such certificate shall also constitute the
surrender for transfer of the Rights associated with the Common Shares of the
Company, Series D Preferred Stock, Series E Preferred Stock or Series G
Preferred Stock represented thereby. If the Company purchases or acquires any
Common Shares of the Company, Series D Preferred Stock, Series E Preferred Stock
or Series G Preferred Stock (including pursuant to the conversion of the Series
D Preferred Stock, Series E Preferred Stock or Series G Preferred Stock into
Common Shares) after the Record Date but prior to the Distribution Date, any
Rights associated with such Common Shares, Series D Preferred Stock, Series E
Preferred Stock or Series G Preferred Stock shall be deemed canceled and retired
so that the Company shall not be entitled to exercise any Rights associated with
the Common Shares of the Company, Series D Preferred Stock, Series E Preferred
Stock or Series G Preferred Stock which are no longer outstanding; it being
agreed that in the case of the conversion of the Series D Preferred Stock,
Series E Preferred Stock or Series G Preferred Stock into Common Shares, in
accordance with this Agreement there shall be issued one Right with respect to
each Common Share that shall be issued upon such conversion (as such number may
hereinafter be adjusted pursuant to the provisions of Section 11(p)).
Section 4. Form of Rights Certificates.
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(a) Rights Certificates (and the forms of election to
purchase shares and of assignment to be printed on the reverse thereof), when,
as and if issued, shall be substantially in the form set forth in Exhibit B
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 or trading system on which the Rights may from time to time be listed
or traded, or to conform to usage. Subject to the provisions of Sections 11 and
22, the Rights Certificates, whenever distributed, shall entitle the holders
thereof to purchase such number of one one-thousandths of a Junior Preferred
Share, as shall be set forth therein at the price per one one-thousandth of a
Junior Preferred Share set forth therein (the "Purchase Price"), but the amount
and type of securities purchasable upon the exercise of each Right and the
Purchase Price thereof shall be subject to adjustment as provided therein and in
this Agreement.
(b) Notwithstanding any other provision of this
Agreement, any Rights Certificate that represents Rights that are or were at any
time on or after the Distribution Date Beneficially Owned by an Acquiring Person
or any Affiliate or Associate thereof (or any transferee of such Rights) shall
have impressed on, printed on, written on or otherwise affixed to it (if the
Company or the Rights Agent has knowledge that such Person is an Acquiring
Person or an Associate or Affiliate thereof or transferee of such Person or a
nominee of any of the foregoing) the following legend:
The Beneficial Owner of the Rights represented by
this Rights Certificate is an Acquiring Person or an
Affiliate or Associate (as
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such terms are defined in the Rights Agreement) of
an Acquiring Person or a subsequent holder of such
Rights Certificate Beneficially Owned by such
Persons. Accordingly, under circumstances specified
in the Rights Agreement, this Rights Certificate and
the Rights represented hereby will become null and
void.
Notwithstanding the above provision, failure to place such legend on any Rights
Certificate representing Rights which are otherwise null and void pursuant to
the terms of this Agreement shall not affect the null and void status of such
Rights.
Section 5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf
of the Company by its Chairman of the Board, Chief Executive Officer, President
or any Vice President, either manually or by facsimile signature, shall have
affixed thereto the Company's seal or a facsimile thereof, and shall be attested
by the Secretary or an Assistant Secretary of the Company, either manually or by
facsimile signature. The Rights Certificates shall be countersigned by the
Rights Agent and shall not be valid for any purpose unless so countersigned. If
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
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Rights Certificate, although at the date of the execution of this Agreement any
such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent
will keep or cause to be kept, at its office designated for such purposes, books
for registration and transfer of the Rights Certificates issued under this
Agreement. 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, the date of each of the Rights Certificates,
and the certificate numbers for 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, 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 Rights Certificates
(other than such Rights Certificates representing Rights that have become null
and void pursuant to this Agreement or that have been exchanged pursuant to
Section 24) may be transferred, split up, combined or exchanged for another
Rights Certificate or Rights Certificates, entitling the holder of record to
purchase a like number of one one-thousandths of a Junior Preferred Share (or,
following a Triggering Event, Common Shares of the Company, other securities,
cash or other assets, as the case may be) as the Rights Certificate or Rights
Certificates surrendered then entitles such holder (or former holder in the case
of a transfer) to purchase. Any holder of record desiring to transfer any Rights
Certificate or Rights Certificates shall surrender the Rights Certificate or
Rights Certificates at the office of the Rights Agent designated for such
purposes with the form of assignment on the reverse side thereof (or enclose
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with such Rights Certificate or Rights Certificates a written instrument of
transfer in a form satisfactory to the Company and the Rights Agent), duly
executed by the holder of record thereof or his attorney duly authorized in
writing, and with such signature duly guaranteed. Any holder of record desiring
to split up, combine or exchange any Rights Certificate or Rights Certificates
shall make such request in writing delivered to the Rights Agent, and shall
surrender the Rights Certificate or Rights Certificates to be split up, combined
or exchanged at the office of the Rights Agent designated for such purposes.
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 holder of record shall have completed and signed the
certificate contained in the form of assignment on the reverse side of such
Rights Certificate and shall have provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates of
Associates thereof as the Company shall request. Thereupon the Rights Agent
(subject to Section 4(b), Section 7(e), Section 14 and Section 24) shall
countersign and deliver to the person entitled thereto a Rights Certificate or
Rights Certificates, as the case may be, as so requested. The Company may
require payment of a sum sufficient to cover any tax or governmental charge that
may be imposed in connection with any transfer, split up, combination or
exchange of Rights Certificates.
(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, if requested by
the Company, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the Company, subject to the
provisions of Section 4(b),
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Section 7(e), Section 14 and Section 24, will execute and deliver a new Rights
Certificate of like tenor to the Rights Agent for delivery to the registered
holder in lieu of the Rights Certificate so lost, stolen, destroyed or
mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date
of Rights.
(a) Subject to Section 7(e), at any time after the
Distribution Date, the holder of record of any Rights Certificate may exercise
the Rights evidenced thereby (except as otherwise provided in this Agreement,
including without limitation, the restrictions on exercisability set forth in
Section 9(b), Section 11(a)(iii) and Section 23(a)), in whole or in part upon
surrender of the Rights Certificate, with the form of election to purchase and
the certificate contained in the form of election to purchase on the reverse
side thereof duly executed (with such signature duly guaranteed), to the Rights
Agent at the office of the Rights Agent designated for such purpose, together
with payment of the aggregate Purchase Price with respect to the total number of
one one-thousandths of a Junior Preferred Share (or other securities, cash or
other assets, as the case may be, as to which such surrendered Rights are then
exercisable), subject to adjustment as provided in this Agreement, at or prior
to the earlier of (i) the Close of Business on February 19, 2011 (the "Final
Expiration Date"), (ii) the time at which the Rights are redeemed as provided in
Section 23 (such date being herein referred to as the "Expiration Date"), or
(iii) the time at which such Rights are exchanged as provided in Section 24.
(b) The Purchase Price with respect to each Right shall
initially be $45 for each one one-thousandth of a Junior Preferred Share issued
pursuant to the exercise of a Right. The Purchase Price and the number of one
one-thousandths of a Junior Preferred Share or other securities or consideration
to be acquired upon exercise of a Right shall be subject to adjustment
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from time to time as provided in Sections 11 and 13. The Purchase Price shall be
payable in lawful money of the United States of America in accordance with
Section 7(c).
(c) Except as provided in Section 7(e), upon receipt of a
Rights Certificate representing exercisable Rights, with the form of election to
purchase and the certificate contained in the form of election to purchase duly
executed, accompanied by payment of the Purchase Price for the shares or other
securities or assets to be purchased and an amount equal to any applicable
transfer tax, by cash, certified check or official bank check payable to the
order of the Company, the Rights Agent, subject to Section 20(j), shall
thereupon promptly (i) (A) requisition from any transfer agent of the Junior
Preferred Shares (or make available, if the Rights Agent is the transfer agent
for such shares) certificates for the total number of Junior Preferred Shares so
elected to be purchased and the Company will comply and hereby authorizes and
directs such transfer agent to comply with all such requests, or (B) if the
Company shall have elected to deposit the total number of Junior Preferred
Shares issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one one-thousandths of a Junior Preferred Share as are to be purchased
(in which case certificates for the Junior Preferred Shares represented by such
receipts shall be deposited by the transfer agent with the depositary agent) and
the Company hereby directs the depositary agent to comply with such request,
(ii) when appropriate, 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, (iii) promptly after receipt of such certificates or depositary receipts,
cause the same to be delivered to or upon the order of the holder of record of
such Rights Certificate, registered in such name or names as may be designated
by such holder, and (iv) when appropriate, after receipt promptly deliver such
cash to or upon the order of the
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holder of record of such Rights Certificate; provided, however, that in the case
of a purchase of securities, other than Junior Preferred Shares, pursuant to
Section 13, the Rights Agent shall promptly take the appropriate actions
corresponding to the foregoing clauses (i) through (iv). If the Company is
obligated to issue other securities (including Common Shares) of the Company,
pay cash and/or distribute other property pursuant to Section 11(a), the Company
will make all arrangements necessary so that such other 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 an exercise of Rights, a number of Rights be
exercised so that only whole Junior Preferred Shares would be issued.
(d) If the holder of record of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new Rights
Certificate evidencing Rights equivalent to the Rights remaining unexercised
shall be issued by the Rights Agent to the registered holder of such Rights
Certificate or to his duly authorized assigns, subject to the provisions of
Section 14.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the occurrence of a Triggering Event, any Rights
Beneficially Owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee from an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such (and any subsequent transferees of such transferee), or (iii) a
transferee of an Acquiring Person (or 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 the Acquiring Person has any
continuing agreement, arrangement or understanding regarding the transferred
Rights or (B)
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a transfer which the Board of Directors of the Company has determined is part of
a plan, arrangement or understanding which has a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action, and any holder (including any subsequent holder) of such Rights shall
thereupon have no rights whatsoever with respect to such Rights, whether under
any provision of this Agreement or otherwise. The Company shall use all
reasonable efforts to insure that the provisions of this Section 7(e) are
complied with, but shall have no liability to any holder of Right Certificates
or other Person as a result of its failure or inability to make any
determinations with respect to an Acquiring Person or its Affiliates, Associates
or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a holder of record upon the occurrence of
any purported exercise as set forth in this Section 7 unless such holder of
record shall have (i) completed and signed the certificate contained in the form
of election to purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise and (ii) provided such additional evidence of the
identity of the Beneficial Owner (or former Beneficial Owner) or Affiliates or
Associates thereof as the Company shall request.
Section 8. Cancellation and Destruction of Rights Certificates.
All Rights Certificates surrendered for the purpose of exercise, transfer, split
up, combination or exchange shall, if surrendered to the Company or to any of
its agents, be delivered to the Rights Agent for cancellation or in canceled
form, or, if surrendered to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Agreement. The Company shall deliver
to the Rights Agent for cancellation and retirement, and the Rights Agent shall
so cancel and retire, any other Rights
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Certificate purchased or acquired by the Company otherwise than upon the
exercise thereof. The Rights Agent shall deliver all canceled Rights
Certificates to the Company, or shall, at the written request of the Company,
destroy or cause to be destroyed such canceled Rights Certificates, and in such
case shall deliver a certificate of destruction thereof to the Company.
Section 9. Reservation and Availability of Capital Stock.
(a) The Company covenants and agrees that it will cause
to be reserved and kept available, out of and to the extent of its authorized
and unissued Junior Preferred Shares not reserved for another purpose (and,
following the occurrence of a Triggering Event, out of its authorized and
unissued Common Shares or other securities) or shares held in its treasury, the
number of Junior Preferred Shares (and, following the occurrence of a Triggering
Event, Common Shares or other securities) that, as provided in this Agreement,
including Section 11(a)(iii), will be sufficient to permit the exercise in full
of all outstanding Rights. Prior to the occurrence of a Triggering Event, the
Company shall not be obligated to cause to be reserved and kept available out of
its authorized and unissued Common Shares or shares of preferred stock (other
than Junior Preferred Shares), any such Common Shares or any shares of preferred
stock (other than Junior Preferred Shares) to permit exercise of outstanding
Rights.
(b) The Company shall (i) cause, from and after such time
as the Rights become exercisable, the Rights and all Junior Preferred Shares
(and following the occurrence of a Triggering Event, Common Shares, issued or
reserved for issuance upon exercise thereof) to be listed or admitted for
trading by the NASDAQ National Market ("Nasdaq National Market") or any other
national securities exchange upon notice of issuance upon such exercise and (ii)
if then necessary to permit the offer and issuance of such Junior Preferred
Shares (and, following the occurrence of a Triggering Event, Common Shares or
other securities), register and qualify such
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Junior Preferred Shares (and, following the occurrence of a Triggering Event,
Common Shares or other securities) under the Securities Act and any applicable
state securities or "blue sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as possible after such filing and keep such registration and
qualifications effective until the earlier of the Expiration Date or the Final
Expiration Date. The Company may temporarily suspend, for a period of time not
to exceed ninety days, the exercisability of the Rights in order to prepare and
file a registration statement under the Securities Act and permit it to become
effective or to comply with such blue sky laws. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect.
(c) The Company covenants and agrees that it will take
all such action as may be necessary to insure that all Junior Preferred Shares
(and following the occurrence of a Triggering Event, Common Shares 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 in
respect thereof), be duly and validly authorized and issued and fully paid and
nonassessable shares in accordance with applicable law.
(d) The Company further covenants and agrees that it will
pay when due and payable any and all federal and state transfer taxes and
charges which may be payable in respect of the issuance or delivery of the
Rights Certificates or of any Junior Preferred Shares (or Common Shares or other
securities, as the case may be) upon the exercise of Rights. The Company shall
not, however, be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Rights Certificates to a Person other
than, or the issuance or
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delivery of certificates for Junior Preferred Shares (or Common Shares or other
securities, as the case may be) upon exercise of Rights in a name other than
that of, the holder of record of the Rights Certificate, and the Company shall
not be required to issue or deliver a Rights Certificate or certificate for
Junior Preferred Shares (or Common Shares or other securities, as the case may
be) to a Person other than such holder of record, until any such tax shall have
been paid (any such tax being payable by the holder of such Rights Certificate
at the time of surrender) or until it has been established to the Company's
satisfaction that no such tax is due.
Section 10. Preferred Shares Record Date. Each Person in whose
name any certificate for Junior Preferred Shares (or Common Shares 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 the Junior
Preferred Shares (or Common Shares 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) was made; provided,
however, that if the date of such surrender and payment is a date upon which the
Junior Preferred Shares (or Common Shares 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 on, and such certificate shall be
dated, the next succeeding Business Day on which the Junior Preferred Shares (or
Common Shares or other securities) 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
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exercise any preemptive rights and shall not be entitled to receive any notice
of any proceedings of the Company, except as otherwise provided in this
Agreement.
Section 11. Adjustments to Number and Kind of Shares; Number of
Rights or Purchase Price. The number and kind of shares subject to purchase upon
the exercise of each Right, the number of Rights outstanding and the Purchase
Price are subject to adjustment from time to time as provided in this Section
11.
(a) (i) If the Company shall at any time after the
date of this Agreement (A) declare or pay any dividend on Junior Preferred
Shares payable in Junior Preferred Shares, (B) subdivide or split the
outstanding Junior Preferred Shares into a greater number of shares, (C) combine
or consolidate the outstanding Junior Preferred Shares into a smaller number of
shares or effect a reverse split of the outstanding Junior Preferred Shares or
(D) issue any shares of its capital stock in a reclassification of the Junior
Preferred Shares (including any such reclassification in connection with a
consolidation or merger in which the Company is the continuing or surviving
corporation), except as otherwise provided in Section 7(e) or this Section
11(a), the Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision, combination or
reclassification, and the number and kind of Junior Preferred Shares or capital
stock, as the case may be, issuable on such date, shall be proportionately
adjusted so that the holder of any Right exercised after such time shall be
entitled to receive, upon payment of the Purchase Price then in effect, the
aggregate number and kind of Junior Preferred Shares or capital stock, as the
case may be, which, if such Right had been exercised immediately prior to such
date and at a time when the Junior Preferred Shares transfer books of the
Company were open, the holder thereof would have owned upon such exercise and
been entitled to receive by virtue of such dividend, subdivision, combination or
reclassification;
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provided, however, that in no event shall the consideration to be paid upon the
exercise of one such Right be less than the per share par value of the shares of
capital stock of the Company issuable upon exercise of the Right. If an event
occurs which would require an adjustment under both this Section 11(a)(i) and
Section 11(a)(ii), the adjustment provided for in this Section 11(a)(i) shall be
in addition to, and shall be made prior to, any adjustment required pursuant to
Section 11(a)(ii).
(ii) Subject to Section 23(a) and Section 24, if
any Person shall at any time after the date of this Agreement become an
Acquiring Person (a "Section 11(a)(ii) Event"), then, except as otherwise
provided in this Section 11, promptly following the occurrence of such event,
proper provision shall be made so that each holder of a Right (except as
provided in Section 7(e)) shall thereafter have the right to receive, upon
exercise thereof at the then current Purchase Price in accordance with the terms
of this Agreement in lieu of the number of one one-thousandths of a Junior
Preferred Share, such number of Common Shares, as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the then number
of one one-thousandths of a Junior Preferred Share for which a Right was
exercisable immediately prior to the first occurrence of a Section 11(a)(ii)
Event, and (y) dividing that product (such product, following such first
occurrence, shall be referred to as the "Purchase Price" with respect to each
Right for all purposes of this Agreement) by 50% of the Current Market Price
(determined pursuant to Section 11(d)) per share of such class of Common Shares
for which a Right is exercisable on the date of such first occurrence (such
number of shares is herein called the "Adjustment Shares"); provided that the
Purchase Price and the number of Adjustment Shares shall be further adjusted as
provided in this Agreement to reflect any events occurring after the date of
such first occurrence; and provided, further, that if the transaction that would
otherwise
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give rise to the foregoing adjustment is also subject to the
provisions of Section 13, then only the provisions of Section 13 shall apply and
no adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) If the number of Common Shares which are
authorized by the Company's certificate of incorporation but which are 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 Section 11(a)(ii) and the Rights shall become so exercisable,
the Company shall take all such action as may be necessary (including seeking
stockholder approval for the authorization of additional shares) to authorize
additional Common Shares for issuance upon exercise in full of the Rights;
provided, however, that if the Company after using its reasonable best efforts
to do so is unable to cause the authorization of a sufficient number of
additional Common Shares within 120 days (the "Substitution Period"), the
Company shall: (A) determine the value of the Adjustment Shares issuable upon
the exercise of a Right (the "Current Value") and (B) with respect to each Right
(subject to Section 7(e)), upon the exercise of such Right and payment of the
applicable Purchase Price, make adequate provision to substitute for the
Adjustment Shares (1) cash, (2) a reduction in the Purchase Price, (3) Common
Shares or other equity securities of the Company (including, without limitation,
shares, or units of shares, of preferred stock of the Company which, by virtue
of having dividend, voting and liquidation rights substantially comparable to
the class of Common Shares of the Company for which a Right is exercisable are
deemed in good faith by the Board of Directors of the Company to have
essentially the same value as the class of Common Shares of the Company for
which a Right is exercisable (such shares or units of shares of preferred stock
are herein called "Common Share Equivalents")), (4) debt securities of the
Company, (5) other assets, or (6) any combination
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of the foregoing, having an aggregate value which, when added to the value of
the Common Shares of the Company actually issued upon exercise of such Right,
shall have an aggregate value equal to the Current Value (less the amount of any
reduction in the Purchase Price), where such aggregate value has been determined
in good faith by the Board of Directors of the Company based upon the advice of
a nationally recognized independent investment banking firm selected in good
faith by the Board of Directors of the Company; provided, however, that if the
Company shall not have made adequate provision to deliver value pursuant to
clause (B) above within 120 days following the later of (x) the first occurrence
of a Section 11(a)(ii) Event and (y) the date on which the Company's right of
redemption pursuant to Section 23(a) expires (the later of (x) and (y) being
referred to 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, Common Shares of the Company for which
a Right is exercisable (to the extent available) and then, if necessary, cash or
shares of capital stock of the Company, which shares and/or cash have an
aggregate value equal to the excess of the Current Value over the Purchase
Price. To the extent that the Company determines that some action need be taken
pursuant to the first and/or second sentence of this Section 11(a)(iii), the
Company (x) shall provide, subject to Section 7(e), that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect. For purposes of this
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Section 11(a)(iii), the value of each Adjustment Share shall be the Current
Market Price per Common Share of the Company on the Section 11(a)(ii) Trigger
Date and the per share or per unit value of any Common Share Equivalent shall be
deemed to equal the Current Market Price per Common Share of the Company on such
date.
(b) If the Company shall fix a record date for the
issuance of rights (other than the Rights), options or warrants to all holders
of Junior Preferred Shares entitling them to subscribe for or purchase (for a
period expiring within 45 calendar days after such record date) Junior Preferred
Shares, shares having the same rights, privileges and preferences as the Junior
Preferred Shares ("Equivalent Preferred Shares") or securities convertible into
Junior Preferred Shares or Equivalent Preferred Shares at a price per Junior
Preferred Share or Equivalent Preferred Share (or having a conversion price per
share, if a security convertible into Junior Preferred Shares or Equivalent
Preferred Shares) less than the Current Market Price (as determined pursuant to
Section 11(d)) per Junior Preferred Share 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 Junior Preferred Shares
outstanding on such record date, plus the number of Junior Preferred Shares
which the aggregate offering price of the total number of Junior Preferred
Shares and/or Equivalent Preferred Shares so to be offered (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such Current Market Price, and the denominator of which shall be the
number of Junior Preferred Shares outstanding on such record date, plus the
number of additional Junior Preferred Shares and/or Equivalent Preferred Shares
to be offered for subscription or purchase (or into which the convertible
securities so to be offered are initially convertible). If such subscription
price may be
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paid by delivery of consideration, part or all of which may be in a form other
than cash, the value of such consideration shall be as determined in good faith
by the Board of Directors of the Company, whose determination shall be described
in a statement filed with the Rights Agent and shall be binding on the Rights
Agent and the holders of the Rights. Junior Preferred Shares owned by or held
for the account of the Company shall not be deemed outstanding for the purpose
of any such computation. Such adjustment shall be made successively whenever
such a record date is fixed, and if such rights or warrants are not so issued,
the Purchase Price shall be adjusted to be the Purchase Price which would then
be in effect if such record date had not been fixed.
(c) If the Company shall fix a record date for a
distribution to all holders of Junior Preferred Shares (including any such
distribution made in connection with a consolidation or merger in which the
Company is the continuing or surviving corporation) of evidences of
indebtedness, cash (other than a regular quarterly cash dividend out of the
earnings or retained earnings of the Company), assets (other than a dividend
payable in Junior Preferred Shares, but including any dividend payable in stock
other than Junior Preferred Shares) or subscription rights or warrants
(excluding those referred to in Section 11(b)), the Purchase Price to be in
effect after such record date shall be determined by multiplying the Purchase
Price in effect immediately prior to such record date by a fraction, the
numerator of which shall be the Current Market Price (as determined pursuant to
Section 11(d)) per Junior Preferred Share on such record date, less the fair
market value (as determined in good faith by the Board of Directors of the
Company, whose determination shall be described in a statement filed with the
Rights Agent) of the portion of the cash, assets or evidences of indebtedness so
to be distributed or of such subscription rights or warrants applicable to one
Junior Preferred Share and the denominator of which shall be such
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Current Market Price (as determined pursuant to Section 11(d)) per Junior
Preferred Share. Such adjustments shall be made successively whenever such a
record date is fixed; and if such distribution is not so made, the Purchase
Price shall be adjusted to be the Purchase Price which would have been in effect
if such record date had not been fixed.
(d) (i) For the purpose of any computation under
this Agreement, other than computations made pursuant to Section 11(a)(iii), the
"Current Market Price" per Common Share on any date shall be deemed to be the
average of the daily closing prices per share of the Common Shares for the 30
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to such date, and for purposes of computations made pursuant to Section
11(a)(iii), the "Current Market Price" per Common Share on any date shall be
deemed to be the average of the daily closing prices per Common Share for the 10
consecutive Trading Days immediately following such date; provided, however,
that if the Current Market Price per Common Share is determined during a period
following the announcement by the issuer of such Common Shares of (A) any
dividend or distribution on such Common Shares payable in Common Shares or
securities convertible into Common Shares (other than a regular quarterly cash
dividend and other than the Rights), or (B) any subdivision, combination or
reclassification of such Common Shares, and prior to the expiration of the
requisite 30 Trading Day or 10 Trading Day period, as set forth above, the
ex-dividend date for such dividend or distribution, or the record date for such
subdivision, combination or reclassification occurs, 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
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with respect to securities listed or admitted to trading on the Nasdaq National
Market or, if the Common Shares are not listed or admitted to trading on the
Nasdaq National Market, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Common Shares are listed or admitted to trading
or, if the Common Shares are not listed or admitted to trading on any national
securities exchange, the last quoted sale price or, if not so quoted, the
average of the high bid and low asked prices in the over-the-counter market, as
reported by the National Association of Securities Dealers, Inc., Automated
Quotations System or such other system then in use, or, if on any such date the
Common Shares are not quoted by any such organization, the average of the
closing bid and asked prices as furnished by a professional market maker making
a market in the Common Shares selected by the Board of Directors of the Company.
If on any such date no market maker is making a market in the Common Shares, the
fair value of such shares on such date as determined in good faith by the Board
of Directors of the Company shall be used. The term "Trading Day" shall mean a
day on which the principal national securities exchange or national market
system on which the Common Shares are listed or admitted to trading is open for
the transaction of business or, if the Common Shares are not listed or admitted
to trading on any national securities exchange or national market system, a
Business Day. If the Common Shares are not publicly held or not so listed or
traded, "Current Market Price" per share shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation under
this Agreement, the "Current Market Price" of the Junior Preferred Shares shall
be determined in the same manner as
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set forth above for the Common Shares in Section 11(d)(i) (other than the last 2
sentences thereof). If the Current Market Price per Junior Preferred Share
cannot be determined in the manner provided above, the "Current Market Price"
per Junior Preferred Share shall be conclusively deemed to be an amount equal to
1000 (as such number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the Common Shares
of the Company occurring after the date of this Agreement) multiplied by the
Current Market Price per Common Share. If neither the Common Shares nor the
Junior Preferred Shares are publicly held or so listed or traded, "Current
Market Price" per share of the Junior Preferred Shares shall mean the fair value
per share as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent and shall be conclusive for all purposes. For all purposes of this
Agreement, the "Current Market Price" of one one-thousandth of a Junior
Preferred Share shall be equal to the "Current Market Price" of one Junior
Preferred Share divided by 1000.
(e) Anything in this Agreement 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 in
the Purchase Price; provided, however, that any adjustments which by reason of
this Section 11(e) are not required to be made shall be carried forward and
taken into account in any subsequent adjustment. All calculations under this
Section 11 shall be made to the nearest cent or to the nearest ten-thousandth of
a Common Share or other security or one-millionth of a Junior Preferred Share,
as the case may be. Notwithstanding the first sentence of this Section 11(e),
any adjustment required by this Section 11 shall be made no later than the
earlier of (i) three years from the date of the
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transaction which mandates such adjustment, or (ii) immediately prior to the
Expiration Date or the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a) or Section 13(a), the holder of any Right thereafter exercised
shall become entitled to receive any property or shares of capital stock other
than Junior Preferred Shares, thereafter the amount of such property and 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 Junior Preferred Shares contained in this Section 11, and the
provisions of Sections 7, 9, 10, 13 and 14 with respect to the Junior Preferred
Shares shall apply on like terms to any such other property or 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 Junior Preferred Share purchasable from time to time
hereunder upon exercise of the Rights, all subject to further adjustment as
provided herein.
(h) Unless the Company shall have exercised its election
as provided in Section 11(i), upon each adjustment of the Purchase Price as a
result of the calculations made in Sections 11(b) and (c), each Right
outstanding immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Purchase Price, that number of
one one-thousandths of a Junior Preferred Share (calculated to the nearest
one-millionth) 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
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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 or any adjustment to the number of one
one-thousandths of a Junior Preferred Share for which a Right may be exercised,
to adjust the number of Rights, in lieu of any adjustment in the number of one
one-thousandths of a Junior Preferred Share purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of one one-thousandths of a Junior
Preferred Share for which such Right was exercisable immediately prior to such
adjustment. Each Right held of record prior to such adjustment of the number of
Rights shall become that number of Rights (calculated to the nearest one
ten-thousandth) obtained by dividing the Purchase Price in effect immediately
prior to adjustment of the Purchase Price by the Purchase Price in effect
immediately after adjustment of the Purchase Price. The Company shall make a
public announcement 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 10 days later than the date of the public
announcement. If Rights Certificates have been issued, upon each adjustment of
the number of Rights pursuant to this Section 11(i), the Company shall, as
promptly as practicable, cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing, subject to
Section 14, 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
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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 Junior Preferred Share
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 Junior Preferred 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 Junior Preferred Share issuable upon exercise
of the Rights, the Company shall take any corporate action, including using its
best efforts to obtain any required stockholder approvals, which may, in the
opinion of its counsel, be necessary in order that the Company may validly and
legally issue fully paid and nonassessable one one-thousandths of a Junior
Preferred Share 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 of the number of one one-thousandths of a Junior Preferred Share and other
capital stock or securities of the Company, if any, issuable upon such exercise
over and
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above the number of one one-thousandths of a Junior Preferred Share and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares (fractional or otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(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 in its good faith judgment the Board of
Directors of the Company shall determine to be advisable in order that any (i)
consolidation or subdivision of the Junior Preferred Shares, (ii) issuance
wholly for cash of any Junior Preferred Shares at less than the Current Market
Price, (iii) issuance wholly for cash of Junior Preferred Shares or securities
which by their terms are convertible into or exchangeable for Junior Preferred
Shares, (iv) stock dividends or (v) issuance of rights, options or warrants
referred to in this Section 11, hereafter made by the Company to holders of its
Junior Preferred Shares shall not be taxable to such stockholders.
(n) The Company covenants and agrees that it shall not,
at any time after the Distribution Date, (i) consolidate with any other Person
(other than a Subsidiary of the Company in a transaction which complies with
Section 11(o)), (ii) merge with or into any other Person (other than a
Subsidiary of the Company in a transaction which complies with Section 11(o)),
or (iii) sell or transfer (or permit any Subsidiary to sell or transfer), in one
transaction or a series of related transactions not in the ordinary course of
the Company's business, assets, cash flow or earning power aggregating more than
50% of the assets, cash flow or earning power of the
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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)), 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) shall have received a distribution of Rights previously owned by such
Person or any of its Affiliates and Associates.
(o) The Company covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section 23 or Section 27,
take (or permit any Subsidiary to take) any action if at the time such action is
taken it is reasonably foreseeable that such action will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights.
(p) Anything in this Agreement to the contrary
notwithstanding, if the Company shall at any time after the date of this
Agreement and prior to the Distribution Date (i) declare a dividend on the
outstanding Common Shares payable in Common Shares, (ii) subdivide the
outstanding Common Shares, or (iii) combine the outstanding Common Shares into a
smaller number of shares, the number of Rights associated with each Common Share
or share of Series D Preferred Stock, Series E Preferred Stock or Series G
Preferred Stock, as the case may be, 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 Common Share or
share of Series D Preferred Stock, Series E Preferred Stock or Series G
Preferred Stock, as the case may be, following any such event shall equal the
result obtained by multiplying the
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number of Rights associated with each Common Share or share of Series D
Preferred Stock, Series E Preferred Stock or Series G Preferred Stock, as the
case may be, immediately prior to such event by a fraction the numerator which
shall be the aggregate number of Common Shares outstanding immediately prior to
the occurrence of the event (including Common Shares issuable in respect of the
conversion of the Series D Preferred Stock, Series E Preferred Stock and Series
G Preferred Stock) and the denominator of which shall be the aggregate number of
Common Shares outstanding immediately following the occurrence of such event
(including Common Shares issuable in respect of the conversion of the Series D
Preferred Stock, Series E Preferred Stock and Series G Preferred Stock).
Section 12. Certification of Adjustments. Whenever an adjustment
is made as provided in Sections 11 and 13, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief statement of the
facts giving rise to such adjustment, (b) promptly file with the Rights Agent
and with each transfer agent for the Common Shares, Series D Preferred Stock,
Series E Preferred Stock, Series G Preferred Stock or Junior Preferred Shares a
copy of such certificate and (c) if a Distribution Date has occurred, mail a
brief summary thereof to each holder of a Rights Certificate (or, if prior to
the Distribution Date, to each holder of a certificate representing Common
Shares, Series D Preferred Stock, Series E Preferred Stock or Series G Preferred
Stock) in accordance with Section 26. Notwithstanding the foregoing sentence,
the failure of the Company to give such notice shall not affect the validity of
or the force or effect of or the requirement for such adjustment. The Rights
Agent shall be fully protected in relying on any certificate prepared by the
Company pursuant to Sections 11 and 13 and on any adjustment therein contained.
Any adjustment to be made pursuant to Sections 11
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and 13 of this Agreement shall be effective as of the date of the event giving
rise to such adjustment.
Section 13. Consolidation, Merger or Sale or Transfer of Assets
or Earning Power.
(a) If at any time following the time an Acquiring Person
becomes such, directly or indirectly, (x) the Company shall consolidate with, or
merge with and into, any other Person or Persons (other than a Subsidiary of the
Company in a transaction which complies with Section 11(o)), and the Company
shall not be the surviving or continuing corporation of such consolidation or
merger, (y) any Person or Persons (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o)), shall consolidate with, or merge
with and into, the Company, and the Company shall be the continuing or surviving
corporation of such consolidation or merger and, in connection with such
consolidation or merger, all or part of the outstanding Common Shares 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 (z) the Company or one or more
of its Subsidiaries shall sell or otherwise transfer to any other Person or any
Affiliate or Associate of such Person (other than the Company or any Subsidiary
of the Company in one or more transactions each of which complies with Section
11(o)), in one transaction or a series of related transactions not in the
ordinary course of the Company's business, 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), then, on the first occurrence
of any such event, proper provision shall be made so that (i) each holder of
record of a Right, except as provided in Section 7(e), shall thereafter have the
right to receive, upon the exercise thereof at the then current Purchase Price
in accordance with the terms of this Agreement, such number of shares of validly
issued, fully paid and nonassessable and freely tradeable Common Shares of the
Principal
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Party (as defined herein) not subject to any liens, encumbrances, rights of
first refusal or other adverse claims, as shall be equal to the result obtained
by (1) multiplying the then current Purchase Price by the number of one
one-thousandths of a Junior Preferred Share 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 Purchase Price in effect immediately prior to the
first occurrence of a Section 11(a)(ii) Event by the number of one
one-thousandths of a Junior Preferred Share for which a Right was exercisable
immediately prior to such first occurrence of a Section 11(a)(ii) Event) and (2)
dividing that product (such 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 (determined
as provided in Section 11(d)) per Common Share 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); provided that the Purchase Price and the number of Common Shares of
such Principal Party issuable upon exercise of each Right shall be further
adjusted as provided in this Agreement to reflect any events occurring after the
date of the first occurrence of a Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this Agreement;
(iii) the term "Company" for all purposes of this Agreement shall thereafter be
deemed to refer to such Principal Party, it being specifically intended that the
provisions of Section 11 shall only apply to such Principal Party following the
first occurrence of a Section 13 Event; and (iv) such Principal Party shall take
such steps (including, but not limited to, the reservation of a sufficient
number of its Common Shares in accordance with Section 9) in
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connection with the consummation of any such transaction as may be necessary to
assure that the provisions hereof shall thereafter be applicable, as nearly as
reasonably may be, in relation to its Common Shares thereafter deliverable upon
the exercise of the Rights; provided, however, that, upon the subsequent
occurrence of any merger, consolidation, sale of all or substantially all
assets, recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the Purchase Price, such cash, shares, rights, warrants and other
property which such holder would have been entitled to receive had he, at the
time of such transaction, owned the Common Shares of the Principal Party
purchasable upon the exercise of a Right, and such Principal Party shall take
such steps (including, but not limited to, reservation of shares of stock) as
may be necessary to permit the subsequent exercise of the Rights in accordance
with the terms hereof for such cash, shares, rights, warrants and other
property. The provisions of Section 11(a)(ii) shall be of no effect following
the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean
(1) in the case of any transaction described in
clause (x) or (y) of the first sentence of Section 13(a): (A) the Person that is
the issuer of any securities into which Common Shares of the Company are
converted in such merger or consolidation, or, if there is more than one such
issuer, the issuer the Common Shares of which has the greatest market value or
(B) if no securities are so issued, (x) the Person that is the other party to
the merger or consolidation and that survives said merger or consolidation, or,
if there is more than one such Person, the Person the Common Shares of which has
the greatest market value or (y) if the Person that is the other party to the
merger or consolidation does not survive the merger or
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consolidation, the Person that does survive the merger or consolidation
(including the Company if it survives); and
(2) in the case of any transaction described in
clause (z) of the first sentence in Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions, or, if each Person that is a party
to such transaction or transactions receives the same portion of the assets or
earning power so transferred or if the Person receiving the greatest portion of
the assets or earning power cannot be determined, whichever of such Persons as
is the issuer of Common Shares having the greatest market value of shares
outstanding; provided, however, that in any such case described in the foregoing
(b)(i) or (b)(ii), if the Common Shares of such Person are not at such time and
have not been continuously over the preceding 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 Shares of which are and have been so
registered, the term "Principal Party" shall refer to such other Person, or if
such Person is a Subsidiary, directly or indirectly, of more than one Person,
the Common Shares of which are and have been so registered, the term "Principal
Party" shall refer to whichever of such Persons is the issuer of the Common
Shares having the greatest market value of shares outstanding.
(c) The Company shall not consummate any consolidation,
merger, sale or transfer referred to in Section 13(a) unless the Principal Party
shall have a sufficient number of authorized Common Shares 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 the
Principal Party involved therein shall have executed and delivered to the Rights
Agent an agreement confirming that the requirements of Sections 13(a) and (b)
shall
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promptly be performed in accordance with their terms and that such
consolidation, merger, sale or transfer shall not result in a default by the
Principal Party under this Agreement as the same shall have been assumed by the
Principal Party pursuant to Sections 13(a) and (b) hereof and further providing
that, as soon as practicable after executing such agreement pursuant to this
Section 13, the Principal Party will:
(1) prepare and file a registration statement
under the Securities Act, if necessary, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate form, use
its best efforts to cause such registration statement to become effective as
soon as practicable after such filing and use its best efforts to cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Securities Act) until the date of expiration of
the Rights, and similarly comply with applicable state securities laws;
(2) use its best efforts, if the Common Shares
of the Principal Party shall become listed on a national securities exchange, to
list (or continue the listing of) the Rights and the securities purchasable upon
exercise of the Rights on such securities exchange and, if the Common Shares of
the Principal Party shall not be listed on a national securities exchange, to
cause the Rights and the securities purchasable upon exercise of the Rights to
be listed by a national securities exchange or admitted for trading on the
Nasdaq National Market;
(3) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates which
comply in all respects with the requirements for registration on Form 10 (or any
successor form) under the Exchange Act; and
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(4) obtain waivers of any rights of first refusal or preemptive rights
in respect of the Common Shares of the Principal Party subject to purchase upon
exercise of outstanding Rights.
If any of the transactions described in Section 13(a) shall occur at any time
after the occurrence of a transaction described in Section 11(a)(ii), the Rights
which have not theretofore been exercised shall thereafter be exercisable in the
manner described in Section 13(a). The provisions of this Section 13 shall
similarly apply to all successive mergers, consolidations, sales, transfers or
other Section 13 Events.
(d) Furthermore, if the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its certificate of incorporation, articles of
incorporation, bylaws or other instrument governing its corporate affairs, which
provision would have the effect of (i) causing such Principal Party to issue, in
connection with, or as a consequence of, the consummation of a transaction
referred to in this Section 13, Common Shares of such Principal Party at less
than the then Current Market Price per share (determined pursuant to Section
11(d)(i)) or securities exercisable for, or convertible into, Common Shares of
such Principal Party at less than such then Current Market Price (other than to
holders of Rights pursuant to this Section 13) or (ii) providing for any special
payment, tax or similar provisions in connection with the issuance of Common
Shares of such Principal Party pursuant to the provisions of this Section 13;
then, in such event, the Company hereby agrees with each holder of Rights that
it shall not consummate any such transaction unless prior thereto the Company
and such Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing that the provision in question of such
Principal Party shall have been canceled, waived or amended, or that the
authorized securities shall be
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redeemed, so that the applicable provision will have no effect in connection
with, or as a consequence of, the consummation of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
(a) The Company shall not be required to issue fractions of
Rights or to distribute Rights Certificates which evidence fractional Rights. In
lieu of such fractional Rights, there shall be paid to the holders of record 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 then
current market value of a whole Right. For the purposes of this Section 14(a),
the then 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.
(b) The Company shall not be required to issue fractions of
Junior Preferred Shares (other than fractions which are integral multiples of
one one-thousandths of a Junior Preferred Share) upon exercise of the Rights, or
to exchange the Rights pursuant to Section 24 of this Agreement for fractions of
Common Shares. Fractions of Junior Preferred Shares in integral multiples of one
one-thousandth of a Junior Preferred Share may, at the election of the Company,
be evidenced by depositary receipts, pursuant to an appropriate agreement
between the Company and a depositary selected by it, provided that such
agreement shall provide that the holders of such depositary receipts shall have
all the rights, privileges and preferences to which they are entitled as
beneficial owners of the Junior Preferred Shares. With respect to fractional
Junior Preferred Shares that are not integral multiples of one one-thousandth of
a Junior Preferred Share, if the Company does not issue fractional shares or
depositary receipts in lieu thereof, the Company shall pay to the registered
holders of Rights Certificates at the time such Rights
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Certificates 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 Junior
Preferred Share. For purposes of this Section 14(b), the current market value of
one one-thousandth of a Junior Preferred Share shall be the Current Market Price
of one one-thousandth of a Junior Preferred Share (as determined pursuant to
Section 11(d)(ii)).
(c) Following the occurrence of a Triggering Event, the Company
shall not be required to issue fractions of Common Shares upon exercise of the
Rights or to distribute certificates which evidence fractional Common Shares. In
lieu of fractional Common Shares, 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 per share market
value of one Common Share for which a Right is exercisable. For the purposes of
this Section 14(c), the current per share market value of one Common Share for
which a Right is exercisable shall be the closing price of one Common Share (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 a Right
expressly waives his right to receive any fractional Right or any fractional
shares (other than fractions which are integral multiples of one one-thousandths
of a Junior Preferred Share) upon exercise of a Right.
Section 15. Rights of Action. All rights of action in respect of this
Agreement, except the rights of action given to the Rights Agent under Section
18, are vested in the respective holders of record of the Rights Certificates
(and, prior to the Distribution Date, the holders of record of the Common
Shares, Series D Preferred Stock, Series E Preferred Stock and Series X
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Xxxxxxxxx Xxxxx); and any holder of record of any Rights Certificate (or, prior
to the Distribution Date, of the Common Shares, Series D Preferred Stock, Series
E Preferred Stock and Series G Preferred 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 Shares, Series D Preferred Stock, Series E
Preferred Stock and Series G Preferred 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 or any other Person to enforce, or otherwise act
in respect of, his right to exercise the Rights evidenced by such Rights
Certificate (or prior to the Distribution Date, certificates for Common Shares,
Series D Preferred Stock, Series E Preferred Stock and Series G Preferred Stock)
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, accordingly, that they will
be entitled to specific performance of the obligations under, and injunctive
relief against actual or threatened violations of the obligations of any Person
subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right, by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will not be
evidenced by a Rights Certificate and will be transferable only in connection
with the transfer of Common Shares, Series D Preferred Stock, Series E Preferred
Stock or Series G Preferred Stock;
(b) after the Distribution Date, the Rights Certificates will
be transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and certificates
fully executed;
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(c) subject to Section 6(a) and Section 7(f), the Company and
the Rights Agent may deem and treat the Person in whose name the Rights
Certificate (or, prior to the Distribution Date, the associated Common Shares,
Series D Preferred Stock, Series E Preferred Stock or Series G Preferred 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 Certificate or the associated Common Shares, Series D Preferred Stock,
Series E Preferred Stock or Series G Preferred Stock certificate made by anyone
other than the Company or the Rights Agent or the transfer agent of the Common
Shares of the Company, the Series D Preferred Stock, Series E Preferred Stock or
Series G Preferred Stock) for all purposes whatsoever, and, subject to Section
7(e), neither the Company nor the Rights Agent 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 a beneficial interest in a Right or other Person as a result of
its inability to perform any of its obligations under this Agreement by reason
of any preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided,
however, that the Company must use its best efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. Rights Certificate Holder Not Deemed a Stockholder. No
holder of a Right or a Rights Certificate, as such, shall be entitled to vote,
receive dividends in respect of or be deemed for any purpose to be the holder of
Junior Preferred Shares or any other securities of
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the Company which may at any time be issuable upon the exercise of the Rights,
nor shall anything contained in this Agreement 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 set forth
in Section 25), or to receive dividends or subscription rights in respect of any
such stock or securities, or otherwise, until the Right or Rights evidenced by
such certificate for Common Shares, Series D Preferred Stock, Series E Preferred
Stock or Series G Preferred Stock or Rights Certificate, as the case may be,
shall have been exercised in accordance with the provisions of this Agreement.
Section 18. Concerning the Rights Agent.
(a) The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it under this Agreement and, from time
to time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and other disbursements incurred in the administration and execution of this
Agreement and the exercise and performance of its duties under this Agreement.
The Company also agrees to indemnify the Rights Agent for, and to hold it
harmless against, any loss, liability or expense incurred without negligence,
bad faith or willful misconduct on the part of the Rights Agent for anything
done or omitted to be done by the Rights Agent in connection with the acceptance
and administration of this Agreement, including the costs and expenses of
defending against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or omitted by it in
connection with its administration of this Agreement in reliance upon any Rights
Certificate, certificate for Common Shares, Series D
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Preferred Stock, Series E Preferred Stock, Series G Preferred Stock or other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, guaranteed, verified or
acknowledged, by the proper Person or Persons.
Section 19. Merger or Consolidation or Change of Name of Rights Agent.
(a) Any corporation into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any corporation resulting from any merger or consolidation to which the Rights
Agent or any successor Rights Agent shall be a party, or any corporation
succeeding to the corporate trust or stock transfer business of the Rights Agent
or any successor Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or any further act
on the part of any of the parties to this Agreement; provided that such
corporation would be eligible for appointment as a successor Rights Agent under
the provisions of Section 21. If 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 a predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and if 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 a 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.
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(b) If at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall have been
countersigned but not delivered, the Rights Agent may adopt the countersignature
under its prior name and deliver such Rights Certificates so countersigned; and
if at that time any of the Rights Certificates shall not have been
countersigned, the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases such Rights
Certificates shall have the full force provided in the Rights Certificates and
in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes the
duties and obligations imposed by this Agreement upon the following terms and
conditions, by all of which the Company and the holders of Rights Certificates,
by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Company), and the opinion of such counsel shall be full
and complete authorization and protection to the Rights Agent as to any action
taken or omitted by it in good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or established by the Company prior to taking or suffering any
action under this Agreement, such fact or matter (unless other evidence in
respect thereof be specifically prescribed in this Agreement) may be deemed to
be conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Company and delivered to the Rights Agent; and such
certificate shall be full authorization to the Rights Agent
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for any action taken or suffered in good faith by it under the provisions of
this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of
any of the statements of fact or recitals contained in this Agreement or in the
Rights Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery of this
Agreement (except the due execution of this Agreement 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 or any adjustment required under the provisions of
this Agreement or responsible for the manner, method or amount of any such
change or adjustment or the ascertaining of the existence of facts that would
require any such change in the exercisability of the Rights or any change or
adjustment (except with respect to the exercise of Rights evidenced by Rights
Certificates after actual notice of any such change or adjustment); nor shall it
by any act under this Agreement be deemed to make any representation or warranty
as to the authorization or reservation of any Common Shares or Junior Preferred
Shares or other securities to be issued pursuant to this Agreement or any Rights
Certificate or as to whether any Common Shares or Junior Preferred
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Shares or other securities will, when issued, be validly authorized and issued,
fully paid and nonassessable.
(f) The Company agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed, acknowledged and
delivered all such further and other acts, instruments and assurances as may
reasonably be required by the Rights Agent for the carrying out or performing by
the Rights Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to
accept instructions with respect to the performance of its duties hereunder from
any one of the Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Treasurer, any Assistant Treasurer, the
Secretary or any Assistant Secretary of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be taken by it in good faith
in accordance with the instructions of any such officer or for any delay in
acting while waiting for those instructions.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the Rights or other
securities of the Company or become pecuniarily interested in any transaction in
which the Company may be interested, or contract with or lend money to the
Company or otherwise act as fully and freely as though it were not the Rights
Agent under this Agreement. Nothing in this Agreement shall preclude the Rights
Agent from acting in any other capacity for the Company or for any other legal
entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty under this Agreement 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
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resulting from any such act, default, neglect or misconduct, provided reasonable
care was exercised in the selection and continued employment thereof.
(j) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, split up, combination or exchange,
the certificate contained in the form of assignment or the form of election to
purchase set forth on the reverse thereof, as the case may be, has either not
been completed or indicates an affirmative response to clause 1 and/or 2
thereof, the Rights Agent shall not take any further action with respect to such
requested exercise or transfer without first consulting with the Company.
Section 21. Change of Rights Agent. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares, Series D Preferred Stock, Series E Preferred Stock, Series
G Preferred Stock and the Junior Preferred Shares by registered or certified
mail, and to the holders of the Rights Certificates by first-class mail. The
Company may remove the Rights Agent or any successor Rights Agent (with or
without cause) upon 30 days' notice in writing, mailed to the Rights Agent or
any successor Rights Agent, as the case may be, and to each transfer agent of
the Common Shares, Series D Preferred Stock, Series E Preferred Stock, Series G
Preferred Stock and the Junior Preferred Shares 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. Notwithstanding the
foregoing provisions of this Section 21, in no event shall the resignation or
removal of a Rights Agent be effective until a successor Rights Agent shall have
been appointed and have accepted such appointment. If the Company shall fail to
make such appointment within a period of
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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
incumbent Rights Agent or the holder of record of any Rights Certificate may
apply to any court of competent jurisdiction for the appointment of a new Rights
Agent. Any successor Rights Agent, whether appointed by the Company or by such a
court, shall be a corporation organized and doing business under the laws of the
United States or any State thereof, in good standing, which is authorized under
such laws to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has, or
together with its parent entity has, at the time of its appointment as Rights
Agent a combined capital and surplus of at least $100 million. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it under this Agreement, 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 Shares,
the Series D Preferred Stock, the Series E Preferred Stock, the Series G
Preferred Stock and the Junior Preferred Shares, and mail a notice thereof in
writing to the holders of record of the Rights Certificates or, if prior to the
Distribution Date, the holders of record of the Common Shares, the Series D
Preferred Stock, the Series E Preferred Stock and the Series G Preferred Stock.
Failure to give any notice provided for in this Section 21, however, or
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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 of Directors to reflect any adjustment or change
in the Expiration Date, the Purchase Price and the number or kind or class of
shares of stock 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 Common Shares, Series D
Preferred Stock, Series E Preferred Stock or Series G Preferred Stock following
the Distribution Date and prior to the redemption or expiration of the Rights,
the Company (i) shall, with respect to Common Shares, Series D Preferred Stock,
Series E Preferred Stock or Series G Preferred Stock so issued or sold pursuant
to the exercise of stock options or under any employee plan or arrangement,
granted or awarded as of the Distribution Date, or upon the exercise, conversion
or exchange of securities issued by the Company hereinafter but prior to the
Distribution Date, and (ii) may, in any other case, if deemed necessary or
appropriate by the Board of Directors of the Company, issue Rights Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (x) no such Rights Certificate shall be issued
if, and to the extent that, the Company shall be advised by counsel that such
issuance would create a significant risk of material adverse tax consequences to
the Company or the Person to whom such Rights Certificate would be issued, and
(y) no such Rights Certificate shall be issued if, and to the extent that,
appropriate adjustment shall otherwise have been made in lieu of the issuance
thereof.
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Section 23. Redemption and Termination.
(a) The Board of Directors of the Company may, at its option,
at any time prior to the earlier of (i) any Person becoming an Acquiring Person
(or, if any Person becomes an Acquiring Person prior to the Record Date, by
action taken by the Board of Directors of the Company prior to any Person
becoming an Acquiring Person but effective as of the Close of Business on the
Record Date), or (ii) the Final Expiration Date, 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 of this Agreement (such
redemption price being referred to in this Agreement as the "Redemption Price").
The redemption of the Rights by the Board of Directors of the Company may be
made effective at such time, on such basis and with such conditions as the Board
of Directors of the Company may establish in good faith.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the redemption of the Rights pursuant to Section 23(a), and
without any further action and without any notice, the right to exercise the
Rights will terminate and the only right thereafter of the holders of Rights
shall be to receive the Redemption Price. Promptly after such action of the
Board of Directors ordering the redemption of the Rights, the Company shall give
notice of such redemption to the Rights Agent and the holders of the then
outstanding Rights by mailing such notice to all such holders at each holder's
last address as it appears upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent of the
Common Shares, the Series D Preferred Stock, the Series E Preferred Stock and
the Series G Preferred Stock. Any notice which is mailed in the manner herein
provided shall be deemed given, whether or not the holder receives the notice.
Each such notice of
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redemption will state the method by which the payment of the Redemption Price
will be made. The failure to give notice required by this Section 23 or any
defect therein shall not affect the legality or validity of any redemption
hereunder. Neither the Company nor any of its Affiliates or Associates may
redeem, acquire or purchase for value any Rights at any time in any manner other
than that specifically set forth in this Section 23 or in Section 24, and other
than in connection with the purchase of Common Shares, Series D Preferred Stock,
Series E Preferred Stock or Series G Preferred Stock prior to the Distribution
Date.
Section 24. Exchange.
(a) The Board of Directors of the Company 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)) for
Common Shares at an exchange ratio of one Common Share per Right, appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date of this Agreement (such exchange ratio being referred
to in this Agreement as the "Exchange Ratio"). Notwithstanding the foregoing,
the Board of Directors shall not be empowered to effect such exchange at any
time after any Person (other than an Exempt Person), together with all
Affiliates and Associates of such Person, becomes the Beneficial Owner of 50% or
more of the Voting Power of the Common Shares then outstanding.
(b) Immediately upon the action of the Board of Directors of
the Company ordering the exchange of any Rights pursuant to Section 24(a) 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 Common Shares equal to the number of such
Rights held by such holder multiplied by the Exchange Ratio. The Company
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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 shall promptly mail a notice of any such exchange
to all of the holders of such Rights at the last addresses of the holders as
they appear upon the registry books of the Rights Agent. Any notice which is
mailed in the manner herein provided shall be deemed given, whether or not the
holder receives the notice. Each such notice of exchange will state the method
by which the exchange of the Common Shares for Rights will be effected and, in
the event of any partial exchange, the number and kind of Rights which will be
exchanged. The failure to give notice required by this Section 24 or any defect
therein shall not affect the legality or validity of any exchange hereunder.
(c) Any partial exchange shall be effected pro rata based on
the number of Rights being exchanged (other than Rights which have become null
and void pursuant to the provisions of Section 7(e)) held by each holder of
Rights.
(d) If there shall not be sufficient Common Shares 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 Common Shares for issuance
upon exchange of the Rights.
(e) The Company shall not be required to issue fractions of
Common Shares or to distribute certificates which evidence fractional Common
Shares. In lieu of such fractional Common Shares, the Company shall pay to the
registered holders of the Rights Certificates with regard to which such
fractional Common Shares would otherwise be issuable, an amount in cash equal to
the same fraction of the current market value of such whole Common Shares. For
purposes of this Section 24(d), the current market value of a whole Common Share
shall be the
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closing price of a Common Share (as determined pursuant to the second sentence
of Section 11(d)(i)) for the Trading Day immediately prior to the date of
exchange pursuant to this Section 24.
Section 25. Notice of Proposed Actions.
(a) If the Company, at any time after the Distribution Date,
shall propose to (i) effect any of the transactions referred to in Section
11(a)(i) or to pay any dividend to the holders of record of its Junior Preferred
Shares payable in stock of any class or to make any other distribution to the
holders of record of its Junior Preferred Shares (other than a regular quarterly
cash dividend out of earnings or retained earnings of the Company), (ii) offer
to the holders of record of its Junior Preferred Shares options, warrants or
other rights to subscribe for or to purchase Junior Preferred Shares (including
any security convertible into or exchangeable for Junior Preferred Shares) or
shares of stock of any class or any other securities, options, warrants,
convertible or exchangeable securities or other rights, (iii) effect any
reclassification of its Junior Preferred Shares or any recapitalization or
reorganization of the Company, (iv) effect any consolidation or merger with or
into, or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one transaction or a
series of related transactions not in the ordinary course of the Company's
business, of more than 50% of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to, any other Person or Persons, or (v) effect
the liquidation, dissolution or winding up of the Company, then, in each such
case, the Company shall give to each holder of record of Rights, in accordance
with Section 26, notice of such proposed action, which shall specify the record
date for the purposes of such transaction referred to in Section 11(a)(i), or
such dividend or distribution, or the date on which such reclassification,
recapitalization, reorganization, consolidation, merger, sale or
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transfer of assets, liquidation, dissolution, or winding up is to take place and
the record date for determining participation therein by the holders of record
of Junior Preferred Shares, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i) or (ii) above
at least 10 days prior to the record date for determining holders of record of
the Junior Preferred Shares for purposes of such action, and in the case of any
such other action, at least 10 days prior to the date of the taking of such
proposed action or the date of participation therein by the holders of record of
Junior Preferred Shares, whichever shall be the earlier.
(b) If any of the transactions referred to in Section 11(a)(ii)
or Section 13 of this Agreement are proposed, then, in any such case, the
Company shall give to each holder of Rights, in accordance with Section 26,
notice of the proposal of such transaction at least 10 days prior to
consummating such transaction, which notice shall specify the proposed event and
the consequences of the event to holders of Rights under Section 11(a)(ii) or
Section 13, as the case may be, and, upon consummating such transaction, shall
similarly give notice thereof to each holder of Rights.
(c) If any Section 11(a)(ii) Event shall occur, then all
references in this Section 25 to Junior Preferred Shares shall be deemed
thereafter to refer to the class of Common Shares or other securities for which
the Rights are then exercisable.
Section 26. Notices. Except as provided in Section 21, notices or
demands authorized by this Agreement to be given or made by the Rights Agent or
by the holder of record of any Rights Certificate or Right 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:
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Z-Tel Technologies, Inc.
000 Xxxxx Xxxxxxx Xxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxx, Xxxxxxx 00000
Attention: General Counsel
Subject to the provisions of Section 21, any notice or demand authorized by this
Agreement to be given or made by the Company or by the holder of record of any
Rights Certificate or Right 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:
American Stock Transfer & Trust Company
00 Xxxxxx Xxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxx
Notices or demands authorized by this Agreement to be given or made by the
Company or the Rights Agent to the holder of record of any Rights Certificate or
Right (or, if prior to the Distribution Date, to the holder of certificates
representing Common Shares, Series D Preferred Stock, Series E Preferred Stock
or Series G Preferred Stock) shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed to such holder at the address of
such holder as it appears upon the registry books of the Rights Agent or, prior
to the Distribution Date, on the registry books of the transfer agent of the
Company.
Section 27. Supplements and Amendments. Prior to any Person becoming an
Acquiring Person, the Company may and the Rights Agent shall, if the Company so
directs, supplement or amend any provision of this Agreement without the
approval of any holders of the Rights, the Common Shares, the Series D Preferred
Stock, the Series E Preferred Stock or the Series G Preferred Stock. From and
after any Person becoming an Acquiring Person, the Company may and the Rights
Agent shall, if the Company so directs, supplement or amend this
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Agreement without the approval of any holders of Rights in order to (i) cure any
ambiguity, (ii) correct or supplement any provision contained in this Agreement
which may be defective or inconsistent with any other provisions in this
Agreement, or (iii) change or supplement the provisions hereunder in any manner
which the Company may deem necessary or desirable; provided, that no such
supplement or amendment shall adversely affect the interests of the holders of
Rights (other than any interest of an Acquiring Person or an Affiliate or
Associate of an Acquiring Person). Upon the delivery of a certificate from an
appropriate officer of the Company which states that the proposed supplement or
amendment is in compliance with the terms of this Section 27, the Rights Agent
shall execute such supplement or amendment. Prior to the Distribution Date, the
interests of the holders of Rights shall be deemed coincident with the interests
of the holders of the Common Shares, the Series D Preferred Stock, the Series E
Preferred Stock or the Series G Preferred Stock, as the case may be.
Notwithstanding anything contained in this Agreement to the contrary, this
Agreement may not be amended at a time when the Rights are not redeemable.
Section 28. Determinations and Actions by the Board. The Board of
Directors of the Company shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers specifically
granted to the Board of Directors 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 a determination to redeem or not
redeem the Rights or to amend this Agreement). All such actions, calculations,
interpretations and determinations (including, for purposes of clause (y) below,
all omissions with respect to the foregoing) which are done or made by the Board
in
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good faith shall (x) be final, conclusive and binding on the Company, the Rights
Agent, the holders of the Rights and all other parties, and (y) not subject the
Board of Directors of the Company to any liability to the holders of the Rights.
Section 29. Successors. All of 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 under this
Agreement.
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 holders of record of the Rights Certificates (and, prior to the Distribution
Date, the Common Shares, the Series D Preferred Stock, the Series E Preferred
Stock and the Series G Preferred 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 holders of record of
the Rights Certificates (and, prior to the Distribution Date, the Common Shares,
the Series D Preferred Stock, the Series E Preferred Stock and the Series G
Preferred Stock).
Section 31. Governing Law. This Agreement, each Right and each Rights
Certificate issued under this Agreement shall be deemed to be a contract made
under the laws of the State of Delaware and for all purposes shall be governed
by and construed in accordance with the laws of such State applicable to
contracts made and to be performed entirely within such State.
Section 32. Counterparts. This Agreement may be executed in any number
of counterparts and each of such counterparts shall for all purposes be deemed
to be an original, and all such counterparts shall together constitute but one
and the same instrument.
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Section 33. Descriptive Headings. Descriptive headings of the several
Sections of this Agreement are inserted for convenience only and shall not
control or affect the meaning or construction of any of the provisions of this
Agreement.
Section 34. 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, illegal, void or unenforceable, the remainder of
the terms, provisions, covenants and restrictions of this Agreement shall remain
in full force and effect and shall in no way be affected, impaired or
invalidated.
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