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Exhibit 4.2
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YOUNG & RUBICAM INC.
AND
THE BANK OF NEW YORK
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Rights Agent
Rights Agreement
Dated as of April __, 1998
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TABLE OF CONTENTS
Section Page
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1 Certain Definitions................................................... 1
2 Appointment of Rights Agent........................................... 7
3 Issue of Right Certificates........................................... 7
4 Form of Right Certificates............................................ 9
5 Countersignature and Registration..................................... 9
6 Transfer, Split Up, Combination and Exchange of
Right Certificates; Mutilated, Destroyed, Lost or
Stolen Right Certificates............................................. 10
7 Exercise of Rights; Purchase Price; Expiration Date of Rights......... 11
8 Cancellation of Right Certificates.................................... 13
9 Reservation and Availability of Capital Stock......................... 13
10 Preferred Share Record Date........................................... 15
11 Adjustment of Purchase Price, Number of Shares or
Number of Rights...................................................... 15
12 Certification of Adjusted Purchase Price or Number of Shares.......... 23
13 Consolidation, Merger or Sale or Transfer of Assets
or Earning Power...................................................... 24
14 Fractional Rights and Fractional Shares............................... 27
15 Rights of Action...................................................... 28
16 Agreement of Right Holders............................................ 29
17 Right Certificate Holder Not Deemed a Stockholder..................... 30
18 Concerning the Rights Agent........................................... 30
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Section Page
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19 Merger or Consolidation or Change of Name of Rights Agent............. 30
20 Duties of Rights Agent................................................ 31
21 Change of Rights Agent................................................ 34
22 Issuance of New Right Certificates.................................... 35
23 Redemption............................................................ 35
24 Exchange.............................................................. 36
25 Notice of Certain Events.............................................. 37
26 Notices............................................................... 38
27 Supplements and Amendments............................................ 39
28 Successors............................................................ 40
29 Benefits of this Agreement............................................ 40
30 Severability.......................................................... 40
31 Determination and Actions by the Board of Directors, etc.............. 40
32 Governing Law......................................................... 41
33 Counterparts.......................................................... 41
34 Descriptive Headings.................................................. 41
Exhibit A Form of Certificate of Designations
Exhibit B Form of Right Certificate
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RIGHTS AGREEMENT
This Rights Agreement, dated as of April __, 1998, between Young
& Rubicam Inc., a Delaware corporation (the "Company"), and The Bank of New
York, a New York banking 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 (the "Board of
Directors") has authorized and declared a dividend of one right (a "Right") for
each share of Common Stock of the Company outstanding immediately prior to the
date and time of consummation of the Company's initial public offering of shares
of Common Stock (the "Record Date"), and has further authorized and directed the
issuance of one Right (subject to adjustment) with respect to each share of
Common Stock that shall become outstanding (whether originally issued or
delivered from the Company's treasury) between the Record Date and the earlier
of the Distribution Date and the Expiration Date, including any shares of Common
Stock issued in connection with the initial public offering of the shares of
Common Stock, each Right initially representing the right to purchase one
one-hundredth of a Preferred Share upon the terms and subject to the conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
(a) "Acquiring Person" shall mean (i) any Person (other than the H&F
Investors and other than any Permitted H&F 15% Transferee), who or which,
together with all Affiliates and Associates of such Person, shall be or become
the Beneficial Owner of fifteen percent (15%) or more of the then outstanding
shares of Common Stock (other than as a result of an Approved Offer), (ii) the
H&F Investors, if after the Record Date, the H&F Investors, together with all of
their Affiliates and Associates, shall acquire Beneficial Ownership of any
additional shares of Common Stock, such that following the acquisition of such
additional shares of Common Stock, (A) the H&F Investors beneficially own
fifteen percent (15%) or more of the then outstanding shares of Common Stock,
and, (B) if the Management Voting Trust is then in existence, following the
acquisition of such additional shares of Common Stock, the H&F Investors
beneficially own a greater percentage of the Diluted Shares Outstanding than the
percentage of the Diluted Shares Outstanding subject to the Management Voting
Trust at the time of the acquisition of such additional shares of Common Stock
(it being understood that neither sales by, nor termination of, the Management
Voting Trust shall result in the H&F Investors becoming an Acquiring Person
pursuant to this clause (ii) absent a subsequent acquisition of beneficial
ownership of additional shares of Common Stock by the H&F Investors or any of
their Affiliates or
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Associates) or (iii) any person who or which is a Permitted H&F 15% Transferee,
if contemporaneously with or subsequent to the Transfer from the H&F Investors
that resulted in such Person becoming a Permitted H&F 15% Transferee, such
Permitted H&F 15% Transferee, together with all of its Affiliates and
Associates, shall purchase or otherwise become the Beneficial Owner of any
additional shares of Common Stock; provided, however, that (w) a Person shall
not become an Acquiring Person if such Person, together with all of its
Affiliates and Associates, shall become the Beneficial Owner of fifteen percent
(15%) or more of the then outstanding shares of Common Stock (in the case of
clause (i) above) as a result of a reduction in the number of shares of Common
Stock outstanding due to the repurchase of shares of Common Stock by the
Company, unless and until such time as such Person shall purchase or otherwise
become (as a result of actions taken by such Person or any of its Affiliates or
Associates) the Beneficial Owner of any additional shares of Common Stock; (x)
"Acquiring Person" shall not include any Company Entity; and (y) "Acquiring
Person" shall not include any Person who or which, together with all Affiliates
and Associates of such Person, becomes the Beneficial Owner of fifteen percent
(15%) or more of the then outstanding shares of Common Stock (in the case of
clause (i) above) or any additional shares of Common Stock (in the case of
clauses (ii) and (iii) above) but who acquired beneficial ownership of shares of
Common Stock inadvertently, and such Person promptly (and in any event within
ten (10) Business Days after being so requested by the Company) enters into an
irrevocable commitment satisfactory to the Board of Directors promptly (and in
any event within twenty (20) Business Days or such shorter period as shall be
determined by the Board of Directors) to divest, and thereafter promptly divests
as required by such commitment, sufficient shares of Common Stock so that such
Person, together with all of its Affiliates and Associates, ceases to be a
Beneficial Owner of fifteen percent (15%) or more of the then outstanding shares
of Common Stock (in the case of clause (i) above) or such additional shares of
Common Stock (in the case of clauses (ii) and (iii) above).
(b) "Affiliate" shall have the meaning ascribed to such term in Rule
12b-2 of the General Rules and Regulations under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as in effect on the date of this
Agreement.
(c) "Approved Offer" shall mean a tender or exchange offer for all
outstanding shares of Common Stock which is at a price and on terms approved,
prior to the acceptance for payment of shares under such tender or exchange
offer, by the Board of Directors.
(d) "Associate" shall include (x) any Person included in the
definition of "Associate" in Rule 12b-2 under the Exchange Act, as in effect on
the date of this Agreement, and (y) any Affiliate of any such Person.
(e) A Person shall be deemed the "Beneficial Owner" of, and to have
"beneficial ownership" of, and to "beneficially own" any securities:
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(i) which such Person or any of such Person's Affiliates or
Associates beneficially owns or may be deemed to beneficially own, directly or
indirectly (as determined pursuant to Rule 13d-3 or 13d-5 under the Exchange Act
as in effect on the date of this Agreement);
(ii) which such Person or any of such Person's Affiliates or
Associates has, directly or indirectly, (A) the right to acquire (whether such
right is exercisable immediately or only after the passage of time or the
satisfaction of one or more conditions or both) pursuant to any agreement (other
than customary agreements with and between underwriters and selling group
members with respect to a bona fide public offering of securities), arrangement
or understanding (whether in writing or not), or upon the exercise of conversion
rights, exchange rights, rights (other than the Rights), warrants or options, or
otherwise; provided, however, that a Person shall not be deemed to be the
Beneficial Owner of, or to beneficially own, any security solely because such
security has been tendered pursuant to a tender or exchange offer made by such
Person or any of such Person's Affiliates or Associates until such tendered
security is accepted for payment or exchange); or (B) the right to vote or
dispose of, or to direct the vote or disposition of, alone or in concert with
others, pursuant to any agreement, arrangement or understanding (whether in
writing or not); provided, however, that a Person shall not be deemed pursuant
to this clause (ii)(B) to be the Beneficial Owner of, or to beneficially own,
any security if the agreement, arrangement or understanding to vote, or direct
the vote of, such security (1) arises solely from a revocable proxy or consent
given to such Person or any of such Person's Affiliates or Associates in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable rules and regulations under the Exchange Act and
(2) is not also then reportable on Schedule 13D under the Exchange Act (or any
comparable or successor report), other than solely by reason of the existence of
such revocable proxy or consent; or
(iii) which are beneficially owned, directly or indirectly, by any
other Person with which such Person or any of such Person's Affiliates or
Associates has any agreement (other than customary agreements with and between
underwriters and selling group members with respect to a bona fide public
offering of securities), arrangement or understanding (whether or not in
writing) for the purpose of acquiring, holding, voting (except pursuant to a
revocable proxy or consent as described in clause (ii)(B) of this paragraph) or
disposing of any securities of the Company.
Except as otherwise provided in Section 2(k) hereof, if a Person shall be deemed
to be the Beneficial Owner of any securities which are not outstanding, such
securities shall be deemed to be outstanding for purposes of determining the
percentage of the then outstanding shares of Common Stock beneficially owned by
such Person but all other securities (including securities of the same class)
not actually outstanding shall not be deemed outstanding for such purposes.
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(g) "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
(h) "close of business" on any given date shall mean 5:00 P.M., New
York City time, on such date; provided, however, that if such date is not a
Business Day it shall mean 5:00 P.M., New York City time, on the next succeeding
Business Day.
(i) "Common Stock" shall mean the Common Stock, par value $0.01 per
share, of the Company (as it may be constituted from time to time during the
term of this Agreement), except that "Common Stock" when used with reference to
any Person other than the Company (or, in the case of a transaction referred to
in Section 13 hereof, if the Company is the successor to the other Person
referred to in Section 13, or is the surviving corporation, when thereafter used
with reference to the Company) shall mean the capital stock (or, in the case of
a partnership or other unincorporated entity, the equivalent equity interest)
with the greatest voting power of such Person, together with all rights and
benefits (however denominated or constituted) relating to such capital stock
(including, without limitation, any rights or warrants to acquire additional
shares of such capital stock or other securities or assets, or to participate in
any trust for the benefit of holders of such shares, or to share in the benefits
of any agreements or other arrangements for the benefit of such holders),
whether or not such rights are yet exercisable, and together with any other
securities which are represented by the certificates for such shares or are
transferred in connection with transfers of such shares.
(j) "Company Entity" shall mean any of the Company, any wholly owned
Subsidiary of the Company, any employee benefit plan or employee stock plan of
the Company or of any wholly owned Subsidiary of the Company, any Person or
entity holding shares of Common Stock which was organized, appointed or
established by the Company or any such wholly owned Subsidiary for or pursuant
to the terms of any such plan, the Management Voting Trust, the Young & Rubicam
Restricted Stock Trust (the "Restricted Stock Trust"), the trustees under the
Management Voting Trust or the Restricted Stock Trust, any Affiliate or
Associate of the Management Voting Trust or the Restricted Stock Trust or any
trustee under either such trust and any group that includes the Management
Voting Trust, the Restricted Stock Trust, any trustee under either such trust or
any Affiliate or Associate thereof.
(k) "Diluted Shares Outstanding" as of any given time shall mean the
sum of (a) the number of shares of Common Stock then issued and outstanding
(including all shares of Common Stock held in the Restricted Stock Trust) and
(b) the number of shares of Common Stock issuable upon exercise of (1) the HFCP
Options and the Roll-Over Options and (2) all other options, warrants and rights
to acquire, and the conversion of any securities convertible into, shares of
Common Stock, to the extent such rights to acquire shares of Common Stock are
then exercisable. For purposes of Section 1(a)(ii)(B), when calculating
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the percentage of the Diluted Shares Outstanding owned by the H&F Investors or
the Management Voting Trust, as the case may be, the H&F Investors or the
Management Voting Trust, as the case may be, shall be deemed to own all shares
of Common Stock beneficially owned by them assuming the exercise of all of their
options, warrants and rights to acquire, and the conversion by them of any
securities convertible into, shares of Common Stock to the extent, but only to
the extent, such rights to acquire shares of Common Stock are then exercisable
by them. For purposes of calculating the percentage of Diluted Shares
Outstanding owned by the Management Voting Trust, the Management Voting Trust
shall be deemed to own all shares of Common Stock (including all shares of
Common Stock required to be deposited thereunder upon exercise of vested
options) then subject to the Management Voting Trust.
(l) "H&F Investors" shall mean, collectively, Xxxxxxx & Xxxxxxxx
Capital Partners III, L.P., a California limited partnership, H&F Orchard
Partners III, L.P., a California limited partnership and H&F Partners III, L.P.,
a California limited partnership.
(m) "HFCP Options" shall have the meaning given such term in the
Stockholders' Agreement.
(n) "Management Voting Trust" shall mean the trust established
pursuant to the management voting trust agreement dated as of December 12, 1996
by and among the Company, the Restricted Stock Trust, the Voting Trustees (as
defined therein) and each other party thereto.
(o) "Permitted H&F Transferee" shall mean any transferee of Shares
(as defined in the Stockholders' Agreement) from an H&F Investor in a Transfer
that either is not restricted by, or occurs in compliance with, the transfer
restrictions set forth in Articles II and III of the Stockholders' Agreement,
which transferee becomes a party to the Stockholders' Agreement if required
thereby.
(p) "Permitted H&F 15% Transferee" shall mean any Person who is a
Permitted H&F Transferee who or which, immediately after the transfer from the
H&F Investors that resulted in such Person becoming a Permitted H&F Transferee,
together with all Affiliates and Associates of such Person, is the beneficial
owner of 15% or more of the then outstanding shares of Common Stock.
(q) "Person" shall mean any individual, firm, limited liability
company, corporation, partnership, trust, association or other entity.
(r) "Preferred Shares" shall mean shares of Cumulative Participating
Junior Preferred Stock, no par value, of the Company having the rights,
preferences and limitations set forth in the form of Certificate of Designations
attached to this Agreement as Exhibit A and, to the extent that there are not a
sufficient number of shares of Cumulative Participating Junior 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
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of Directors containing terms substantially similar to the terms of the
Cumulative Participating Junior Preferred Stock.
(s) "Roll-Over Options" shall have the meaning set forth in the
Stockholders' Agreement.
(t) "Stock Acquisition Date" shall mean the time and day of the
first public announcement (which for purposes of this definition, shall include,
without limitation, the filing of a report pursuant to the Exchange Act) by the
Company or an Acquiring Person indicating that an Acquiring Person has become
such.
(u) "Stockholders' Agreement" shall mean the amended and restated
stockholders' agreement dated as of April [_], 1998 by and among the H&F
Investors, the Management Investors and the Management Voting Trust (as such
terms are defined therein), such additional signatories as may be deemed added
from time to time pursuant thereto, and the Company.
(v) "Stock Split" shall mean any and all dividends declared on the
outstanding shares of Common Stock payable in shares of Common Stock, if the
declaration of such dividends occurs prior to the date on which the class of
shares of Common Stock is registered under the Exchange Act, regardless of when
such dividends are payable or paid.
(w) "Subsidiary" shall mean, with respect to any Person, any
corporation or other entity as to which such Person beneficially owns, directly
or indirectly, sufficient voting securities or other ownership interests having
ordinary voting power sufficient, in the absence of contingencies, to elect at
least a majority of its directors (or individuals performing similar functions).
(x) "Transfer" shall have the meaning set forth in the Stockholders'
Agreement.
(y) The terms set forth below are defined in the Sections indicated
below:
Term Section
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Act 7(c)
Board of Directors Recitals
Common Stock Equivalent 11(a)(iii)(B)
current market price 11(d)
Current Value 11(a)(iii)(A)
Distribution Date 3(a)
Equivalent Preferred Shares 11(b)
Exchange Act 1(b)
Exchange Ratio 24
Expiration Date 7(a)
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Final Expiration Date 7(a)
NASDAQ 11(d)(i)
NYSE 11(d)(i)
Principal Party 13(b)
Purchase Price 7(b)
Record Date Recitals
Redemption Date 7(a)
Redemption Price 23
Restricted Stock Trust 1(j)
Right Recitals
Right Certificates 3(a)
Rights Agent Recitals
Section 13 Event 13(a)
Security 11(d)(i)
Spread 11(a)(iii)(A)
Substitution Period 11(a)(iii)
Trading Day 11(d)(i)
Trigger Date 11(a)(iii)
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such Co-Rights Agents as it may deem
necessary or desirable upon ten (10) days' prior written notice to the Rights
Agent. The Rights Agent shall have no duty to supervise, and shall in no event
be liable for, the acts or omissions of any such Co-Rights Agent. In the event
that 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. Issue of Right Certificates. (a) Until the close of
business on the earlier of (i) the tenth (10th) Business Day after the Stock
Acquisition Date and (ii) the tenth (10th) Business Day (or such later day as
may be determined by action of the Board of Directors prior to such time as any
Person becomes an Acquiring Person) after the date of the commencement by any
Person (other than any Company Entity) of, or the first public announcement of
the intent of any Person (other than any Company Entity) to commence (which
intention to commence remains in effect for five (5) Business Days after such
announcement), a tender or exchange offer the consummation of which would result
in any Person becoming an Acquiring Person (the earlier of the dates referred to
in clauses (i) and (ii) above being herein referred to as the "Distribution
Date"), (x) the Rights will be evidenced (subject to the provisions of paragraph
(b) of this Section 3) by the certificates for the shares of Common Stock
registered in the names of the holders of the shares of Common Stock (which
certificates for shares of Common Stock shall also be deemed (other than for
purposes of this Section 3 and any provision of this Agreement referring to the
issuance of
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Rights Certificates) to be Right Certificates) and not by separate Right
Certificates, and (y) the Rights (and the right to receive Right Certificates)
will be transferable only simultaneously and together with the transfer of the
underlying shares of Common Stock. The Company shall give the Rights Agent
prompt written notice of the Distribution Date. As soon as practicable after the
Distribution Date, and receipt by the Rights Agent of written notice of the
Distribution Date from the Company, subject to Section 7(e) hereof, 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, at
the expense of the Company) by first-class, postage-prepaid mail, to each record
holder of shares of Common Stock as of the close of business on the Distribution
Date, as shown by the records of the Company, at the address of such holder
shown on such records, a right certificate, substantially in the form of Exhibit
B hereto (a "Right Certificate"), evidencing one Right for each share of Common
Stock so held, subject to adjustment as herein provided. As of and after the
close of business on the Distribution Date, the Rights will be evidenced solely
by such Right Certificates and may be transferred only by the transfer of the
Rights Certificates as permitted hereby, separately and apart from any transfer
of one or more shares of Common Stock.
(b) With respect to certificates for shares of Common Stock
outstanding as of the Record Date or issued prior to the Distribution Date,
until the Distribution Date the Rights will be evidenced solely by such
certificates registered in the names of the holders thereof. Until the
Distribution Date (or the earlier of the Redemption Date or the Expiration
Date), the surrender for transfer of any certificate for shares of Common Stock
outstanding as of the Record Date shall also constitute the transfer of the
Rights associated with the shares of Common Stock represented thereby.
The Company will mail to any record holder of a Right (including,
prior to the Distribution Date, a record holder of shares of Common Stock) a
copy of this Rights Agreement, without charge, promptly after receipt of a
written request therefor.
(c) Rights shall be issued in respect of all shares of Common Stock
that become outstanding after the Record Date and prior to the earlier of the
Distribution Date and the Expiration Date, and all certificates for shares of
Common Stock which become outstanding after the Record Date, but prior to the
earlier of the Distribution Date and the Expiration Date 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 Young & Rubicam Inc. and
The Bank of New York, dated as of April [_], 1998, as it may from time to
time be supplemented or amended pursuant to its terms (the "Rights
Agreement"), the terms of which are hereby incorporated by reference and a
copy of which is on file at the principal executive offices of Young &
Rubicam Inc. Under certain circumstances as set forth
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in the Rights Agreement, such Rights will be evidenced by separate
certificates and will no longer be evidenced by this certificate. Young &
Rubicam Inc. will mail to the registered holder of this certificate a copy
of the Rights Agreement without charge promptly after receipt of a written
request therefor. Under certain circumstances provided for in the Rights
Agreement, Rights issued to or beneficially owned by any Person who is an
Acquiring Person or an Affiliate or Associate thereof (as such terms are
defined in the Rights Agreement) or any subsequent holder of such Rights
shall become null and void.
In the event that the Company purchases or acquires any shares of Common Stock
after the Record Date but prior to the Distribution Date, any Rights associated
with such shares of Common Stock shall be deemed cancelled and retired so that
the Company shall not be entitled to exercise any Rights associated with the
shares of Common Stock which are no longer outstanding.
Section 4. Form of Right Certificates. The Right Certificates (and
the forms of election to purchase shares and of assignment to be printed on the
reverse thereof) shall be substantially in the form of 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 law or with any rule or regulation made pursuant thereto or with
any rule or regulation of any stock exchange or quotation system on which the
Rights may from time to time be listed, or to conform to usage. Subject to the
provisions of Sections 11 and 22 hereof, the Right Certificates, whenever
distributed, shall be dated as of the Record Date, shall show the date of
countersignature and on their face shall entitle the holders thereof to purchase
such number of one-hundredths of a Preferred Share as shall be set forth therein
at the Purchase Price, but the number and type of securities purchasable upon
the exercise of each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
Section 5. Countersignature and Registration. (a) The Right
Certificates shall be executed on behalf of the Company by its Chairman of the
Board, its Chief Executive Officer, its President or any Senior Vice President
or Vice President, or its Treasurer, either manually or by facsimile signature.
The Right Certificates shall be manually countersigned by the Rights Agent and
shall not be valid for any purpose unless so countersigned. In case any officer
of the Company who shall have signed any of the Right Certificates shall cease
to be such officer of the Company before countersignature by the Rights Agent
and issuance and delivery by the Company, such Right Certificates, nevertheless,
may be countersigned by the Rights Agent, and issued and delivered with the same
force and effect as though the person who signed
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such Right Certificates had not ceased to be such officer of the Company; and
any Right Certificate may be signed on behalf of the Company by any person who,
at the actual date of the execution of such Right Certificate, shall be a proper
officer of the Company to sign such Right Certificate, although at the date of
the execution of this Rights Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal stock transfer office or such other office
designated by it for such purpose, books for registration and transfer of the
Right Certificates issued hereunder. Such books shall show the name(s) and
address(es) of the holder(s) of each Right Certificate, the number of Rights
evidenced on its face by each Right Certificate, the certificate number of each
Right Certificate and the date of each Right Certificate.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates. (a)
Subject to the provisions of Sections 7(e), 7(f) and 14 hereof, at any time
after the close of business on the Distribution Date, and at or prior to the
close of business on the Expiration Date, any Right Certificate or Right
Certificates may be transferred, split up, combined or exchanged for another
Right Certificate or other Right Certificates entitling the registered holder to
purchase a like number of one one-hundredths of a Preferred Share (or other
securities, cash and/or assets, as the case may be) as the Right Certificate or
Right Certificates surrendered then entitled such holder to purchase. Any
registered holder desiring to transfer, split up, combine or exchange any Right
Certificate or Right Certificates shall make such request in writing delivered
to the Rights Agent, and shall surrender the Right Certificate or Right
Certificates to be transferred, split up, combined or exchanged at the principal
stock transfer office of the Rights Agent or such other office of the Rights
Agent designated for such purpose. Neither the Rights Agent nor the Company
shall be obligated to take any action whatsoever with respect to the transfer of
any such surrendered Right Certificate unless and until the registered holder
shall have completed and signed the certificate contained in the form of
assignment on the reverse side thereof and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Associates and Affiliates of the foregoing as the Company shall reasonably
request. Thereupon the Rights Agent shall, subject to Sections 7(e), 7(f) and 14
hereof, countersign and deliver to the person entitled thereto a Right
Certificate or Right Certificates, as the case may be, as so requested. The
Company may require payment, by the holders of the Rights, of a sum sufficient
to cover any tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Right Certificates.
(b) Subject to the provisions of Sections 7(e), 7(f) and 14 hereof,
upon receipt by the Company and the Rights Agent of evidence reasonably
satisfactory to them of the loss, theft, destruction or mutilation of a Right
Certificate, and, in case of loss, theft or destruction, of an indemnity or
security reasonably satisfactory to the Company and the Rights Agent, and
reimbursement to the Company and the Rights Agent of all reasonable
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expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will make and
deliver a new Right Certificate of like tenor to the Rights Agent for
countersignature and delivery to the registered holder in lieu of the Right
Certificate so lost, stolen, destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price, Expiration Date of
Rights. (a) Subject to Sections 7(e), 7(f), 9(e) and 11(a)(iii) hereof, the
registered holder of any Right Certificate may exercise the Rights evidenced
thereby (except as otherwise provided herein) in whole or in part at any time
after the Distribution Date upon surrender of the Right Certificate, with the
form of election to purchase and the certificate on the reverse side thereof
duly executed, to the Rights Agent at its principal office or such other office
designated by it for such purpose, together with payment of the Purchase Price
for each one-hundredth of a Preferred Share (or other securities, cash and/or
assets, as the case may be) as to which the Rights are exercised, at or prior to
the earliest of (i) the close of business on May 1, 2008 (the "Final Expiration
Date"), (ii) the date and time at which the Rights are redeemed as provided in
Section 23 hereof (the "Redemption Date"), (iii) the date and time at which the
Rights are exchanged as provided in Section 24 hereof, or (iv) the date and time
at which the Rights expire pursuant to Section 13(d) (such earliest date and
time being referred to herein as the "Expiration Date").
(b) The purchase price for each one one-hundredth of a Preferred
Share purchasable pursuant to the exercise of a Right shall initially be
$[____], shall be subject to adjustment from time to time as provided in
Sections 11 and 13 hereof and shall be payable in lawful money of the United
States of America in accordance with paragraph (c) below (the "Purchase Price").
(c) Except as otherwise provided herein, upon receipt of a Right
Certificate representing exercisable Rights, with the form of election to
purchase and the certificate duly executed, accompanied by payment of the
Purchase Price for the Preferred Shares (or other securities, cash and/or
assets, as the case may be) to be purchased and an amount equal to any
applicable transfer tax (as determined by the Rights Agent) in cash, or by
certified check or bank draft payable to the order of the Company, the Rights
Agent shall, subject to Section 20(j) hereof, thereupon promptly (i) (A)
requisition from any transfer agent of the Preferred Shares certificates (or
make available, if the Rights Agent is the transfer agent) for the number of
Preferred Shares to be purchased and the Company hereby irrevocably authorizes
its transfer agent to comply with all such requests or (B) if the Company has
elected to deposit the Preferred Shares issuable upon exercise of the Rights
hereunder into a depositary, requisition from the depositary agent depositary
receipts representing such number of one one-hundredths of a Preferred Share as
are to be purchased (in which case certificates for the Preferred Shares
represented by such receipts shall be deposited by the transfer agent of the
Preferred Shares 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 to be paid in lieu of issuance of fractional
shares in
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accordance with Section 14 hereof, (iii) after receipt of such certificates or
depositary receipts, cause the same to be delivered to or upon the order of the
registered holder of such Right Certificate, registered in such name or names as
may be designated by such holder and (iv) when appropriate, promptly after
receipt thereof, deliver any such cash to or upon the order of the registered
holder of such Right Certificate. In the event that the Company is obligated to
issue other securities of the Company, pay cash and/or distribute other property
pursuant to Section 11 hereof, the Company will make all arrangements necessary
so that such other securities, cash and/or property are available for
distribution by the Rights Agent, if and when appropriate. Notwithstanding the
foregoing provisions of this Section 7(c), the Company may suspend the issuance
of Preferred Shares or shares of Common Stock or other securities upon exercise
of a Right for a reasonable period, not in excess of ninety (90) calendar days,
during which the Company seeks to register under the Securities Act of 1933, as
amended (the "Act"), and any applicable securities law of any other
jurisdiction, the Preferred Shares or shares of Common Stock or such other
securities to be issued pursuant to the Rights.
(d) In case the registered holder of any Right Certificate shall
exercise less than all the Rights evidenced thereby, a new Right Certificate
evidencing Rights equivalent to the Rights remaining unexercised shall be issued
by the Rights Agent to the registered holder of such Right Certificate or to his
duly authorized assigns, subject to the provisions of Sections 7(e), 7(f) and 14
hereof, or the Rights Agent shall place an appropriate notation on the Right
Certificate with respect to those Rights exercised.
(e) Notwithstanding any other provision of this Agreement to the
contrary, from and after the Stock Acquisition Date, any Rights beneficially
owned by (i) an Acquiring Person or any Affiliate or Associate thereof, (ii) a
transferee of an Acquiring Person (or of any Affiliate or Associate thereof) who
becomes a transferee concurrently with or after the Acquiring Person becomes
such, (iii) a transferee of an Acquiring Person (or of any Affiliate or
Associate thereof) who becomes a transferee prior to the Acquiring Person
becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) by the Acquiring Person to holders of equity
interests in such Acquiring Person (or any Affiliate or Associate thereof) or to
any Person with whom the Acquiring Person (or any Affiliate or Associate
thereof) has any continuing agreement, arrangement or understanding (whether or
not in writing) regarding the transferred Rights or (B) a transfer which the
Board of Directors has determined is part of a plan, arrangement or
understanding (whether or not in writing) which has as a purpose or effect the
avoidance of this Section 7(e) or of Section 11 or 13 with respect to the
limitation of rights beneficially owned by an Acquiring Person (or any Associate
or Affiliate thereof), or (iv) a subsequent transferee of any of the foregoing,
shall become null and void without any further action and no existing or
subsequent holder of such Rights shall have any rights whatsoever with respect
to such Rights, whether under any provision of this Agreement or otherwise. No
Right Certificate shall be issued pursuant to Section 3 hereof that represents
Rights beneficially owned by an Acquiring Person whose Rights would be void
pursuant to the provisions of this Section 7(e)
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or any Associate or Affiliate thereof; no Right Certificate shall be issued at
any time upon the transfer of any Rights to an Acquiring Person whose Rights
would be void pursuant to the provisions of this Section 7(e) or any Associate
or Affiliate thereof or to any nominee of such Acquiring Person, Associate or
Affiliate; and any Right Certificate delivered to the Rights Agent for transfer
to an Acquiring Person whose Rights would be void pursuant to the provisions of
this Section 7(e) shall be cancelled; provided, that if any Right Certificate
that should not have been issued, or should have been cancelled, pursuant to
this sentence is issued or is not cancelled, it shall nevertheless be void as
provided above in this Section 7(e). The Company shall use all reasonable
efforts to insure that the provisions of this Section 7(e) hereof are complied
with, but shall have no liability to any holder of Right Certificates or any
other Person as a result of the failure to make any determination with respect
to an Acquiring Person or its Affiliates or Associates or to transferees of the
foregoing. The Rights Agent shall use all reasonable efforts to comply with the
provisions hereof to the extent it has received instructions from the Company
concerning such matters.
(f) Notwithstanding any other provision of this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to take
any action whatsoever with respect to a registered holder of any Right
Certificate upon the occurrence of any purported transfer or exercise as set
forth in this Section 7 unless and until the registered holder shall have
completed and signed the certificate contained in the form of election to
purchase shares set forth on the reverse side thereof and shall have provided
such additional evidence of the identity of the Beneficial Owner and former
Beneficial Owner (and Associates and Affiliates of the foregoing) as the Company
shall reasonably request.
Section 8. Cancellation of Right Certificates. All Right
Certificates surrendered for the purpose of exercise, transfer, split up,
combination or exchange shall, if surrendered to the Company or to any of its
agents, be delivered to the Rights Agent for cancellation or in cancelled form,
or, if surrendered to the Rights Agent, shall be cancelled by it, and no Right
Certificate shall be issued in lieu thereof except as expressly permitted by any
of the provisions of this Rights Agreement. The Company shall deliver to the
Rights Agent for cancellation and retirement, and the Rights Agent shall so
cancel and retire, any other Right Certificate purchased or acquired by the
Company otherwise than upon the exercise thereof. The Rights Agent shall deliver
all cancelled Right Certificates to the Company.
Section 9. Reservation and Availability of Capital Stock. (a) The
Company covenants and agrees that at all times prior to the Stock Acquisition
Date, it will cause to be reserved and kept available out of its authorized and
unissued Preferred Shares or any authorized and issued Preferred Shares held in
its treasury, the number of Preferred Shares that will be sufficient to permit
the exercise in full of all outstanding Rights and, after the Stock Acquisition
Date, shall to the extent reasonably practicable, so reserve and keep available
a sufficient number of its authorized and unissued shares of Common Stock and/or
other securities or out of its authorized and issued shares of Common Stock
and/or other
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securities held in its treasury which may be required to permit the exercise in
full of the Rights pursuant to this Agreement.
(b) The Company covenants and agrees that it will take all such
action as may be necessary to insure that all Preferred Shares (and following
the Stock Acquisition Date, shares of Common Stock and/or other securities)
delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such shares (subject to payment of the Purchase Price), be duly
and validly authorized and issued and fully paid and nonassessable shares.
(c) The Company covenants and agrees that it will pay when due and
payable any and all U.S. federal and state transfer taxes and charges which may
be payable in respect of the issuance or delivery of the Right Certificates or
of any Preferred Shares (or shares of Common Stock and/or other securities, as
the case may be) upon the exercise of Rights. The Company shall not, however, be
required to pay any transfer tax which may be payable in respect of any transfer
involved in the transfer or delivery of Right Certificates to a person other
than, or the issuance or delivery of certificates or depositary receipts for
Preferred Shares (or shares of Common Stock and/or other securities, as the case
may be) in a name other than that of, the registered holder of the Right
Certificate evidencing Rights surrendered for exercise or to issue or deliver
any certificates or depositary receipts for Preferred Shares (or shares of
Common Stock and/or other securities, as the case may be) upon the exercise of
any Rights until any such tax shall have been paid (any such tax being payable
by the holder of such Right Certificate at the time of surrender) or until it
has been established to the Company's satisfaction that no such tax is due.
(d) So long as the Preferred Shares (or shares of Common Stock
and/or other securities, as the case may be) issuable upon the exercise of the
Rights may be listed on any national securities exchange, the Company shall use
its best efforts to cause, from and after such time as the Rights become
exercisable, all shares reserved for such issuance to be listed on such exchange
upon official notice of issuance upon such exercise.
(e) The Company shall use its best efforts to (i) file as soon as
practicable following the Stock Acquisition Date (or, if required by law, at
such earlier time following the Distribution Date as so required) a registration
statement under the Act with respect to the securities purchasable upon exercise
of the Rights on an appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing and (iii) cause such
registration statement to remain effective (with a prospectus at all times
meeting the requirements of the Act and the rules and regulations thereunder)
until the earlier of (A) the date as of which the Rights are no longer
exercisable for such securities and (B) the expiration of the Rights. The
Company will also take such action as may be appropriate to ensure compliance
with the securities or "blue sky" laws of the various states. The Company may
temporarily suspend, in accordance with applicable law, for a period of time not
to exceed ninety (90) calendar days after the date set forth in clause (i) of
the first
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sentence of this Section 9(e), the exercisability of the Rights in order to
prepare and file such registration statement and permit it to become effective.
Upon any such suspension, the Company shall issue a public announcement, and
shall simultaneously send written notice to the Rights Agent, stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction if the requisite qualification in
such jurisdiction shall not have been obtained, the exercise thereof shall not
be permitted under applicable law or a registration statement shall not have
been declared effective. The Rights Agent may assume that any Right exercised is
permitted to be exercised under applicable law and shall have no liability for
acting in reliance upon such assumption.
Section 10. Preferred Share Record Date. Each Person in whose name
any certificate or depositary receipt for Preferred Shares (or shares of Common
Stock and/or other securities, as the case may be) is issued upon the exercise
of Rights shall for all purposes be deemed to have become the holder of record
of the Preferred Shares (or shares of Common Stock and/or other securities, as
the case may be) represented thereby on, and such certificate or depositary
receipt shall be dated, the date upon which the Right Certificate evidencing
such Rights was duly surrendered and payment of the Purchase Price (and any
applicable transfer taxes) was made; provided, however, that if the date of such
surrender and payment is a date upon which the 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 or depositary receipt shall be dated, the next
succeeding Business Day on which the transfer books of the Company are open.
Prior to the exercise of the Rights evidenced thereby, the holder of a Right
Certificate shall not be entitled to any rights of a stockholder of the Company
with respect to shares for which the Rights shall be exercisable, including,
without limitation, the right to vote, to receive dividends or other
distributions or to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
Section 11. Adjustment of Purchase Price, Number of Shares or Number
of Rights. The Purchase Price, the number and kind of securities, or fractions
thereof, covered by each Right and the number of Rights outstanding are subject
to adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Company shall at any time after the date of
this Agreement (A) declare or pay a dividend on the Preferred Shares payable in
Preferred Shares, (B) subdivide or split the outstanding Preferred Shares, (C)
combine or consolidate the outstanding Preferred Shares into a smaller number of
Preferred Shares or (D) issue any shares of its capital stock in a
reclassification of the 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 this Section 11(a)
and Section 7(e), the Purchase Price in effect at the time of the record date
for such dividend or
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of the effective date of such subdivision, split, combination, consolidation or
reclassification, and the number and kind of shares of Preferred Shares or
capital stock, as the case may be, issuable upon exercise of a Right on such
date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares of
Preferred 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 transfer
books of the Company were open, such holder would have owned upon such exercise
and been entitled to receive by virtue of such dividend, subdivision, split,
combination, consolidation or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of one Right be less
than the aggregate par value of the shares of Preferred Shares or capital stock,
as the case may be, issuable upon exercise of one Right. If an event occurs
which would require an adjustment under both this Section 11(a)(i) and Section
11(a)(ii), 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) Immediately upon the Stock Acquisition Date, proper provision
shall be made so that each holder of a Right (except as otherwise provided in
Section 7(e) hereof) shall thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the terms of this
Agreement and subject to Sections 9(e), 11(a)(iii) and 24, in lieu of Preferred
Shares, such number of shares of Common Stock of the Company as shall equal the
result obtained by (x) multiplying the then current Purchase Price by the then
number of one one-hundredths of a Preferred Share for which a Right was or would
have been exercisable immediately prior to the Stock Acquisition Date (whether
or not such Right was then exercisable) and (y) dividing that product by fifty
percent (50%) of the current market price per share of the Common Stock
(determined pursuant to Section 11(d) hereof) on the Stock Acquisition Date
(such number of shares being hereinafter referred to as the "Adjustment
Shares"); provided, however, if the transaction that would otherwise give rise
to the foregoing adjustment is also subject to the provisions of Section 13
hereof, then only the provisions of Section 13 hereof shall apply and no
adjustment shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that the number of shares of Common Stock which
are authorized by the Company's certificate of incorporation but not outstanding
or reserved for issuance for purposes other than upon exercise of the Rights is
not sufficient to permit the exercise in full of the Rights in accordance with
the foregoing clause (ii) of this Section 11(a), and the Rights become so
exercisable, the Company (acting by resolution of the Board of Directors) shall:
(A) determine the excess of (1) the value of the Adjustment
Shares issuable upon the exercise of a Right (the "Current Value") over
(2) the then current Purchase Price attributable to each Right (such
excess being referred to herein as the "Spread"), and
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(B) with respect to each Right, make adequate provision to
substitute for the Adjustment Shares, upon payment of the Purchase Price,
(1) shares of Common Stock or other equity securities of the Company
(including, without limitation, shares, or units of shares, of preferred
stock which the Board of Directors has deemed to have substantially the
same value as shares of Common Stock (such shares of preferred stock being
referred to herein as "Common Stock Equivalents")), (2) a reduction in the
Purchase Price, (3) cash, (4) debt securities of the Company, (5) other
assets, or (6) any combination of the foregoing (provided, that in making
any such provision, Rights shall, to the fullest extent feasible in view
of the number of authorized shares of Common Stock not outstanding or
reserved for issuance for purposes other than upon exercise of the rights,
be exercisable for shares of Common Stock), in each case having an
aggregate value equal to the Current Value, where such aggregate value has
been determined by the Board of Directors based upon the advice of a
nationally recognized investment banking firm selected by the Board of
Directors;
provided, however, that if the Company shall not have made adequate provision to
deliver value pursuant to clause (B) above within thirty (30) calendar days
following the Stock Acquisition Date (the "Trigger Date"), then the Company
shall be obligated to deliver, upon the surrender for exercise of a Right and
without requiring payment of the Purchase Price, shares of Common Stock (to the
extent available) and then, if necessary, cash, securities and/or assets that
have an aggregate value equal to the Spread. Notwithstanding the immediately
preceding sentence, if the Board of Directors shall determine in good faith that
it is likely that sufficient additional shares of Common Stock could be
authorized for issuance upon exercise in full of the Rights, the thirty (30)
calendar day period set forth above may be extended to the extent necessary, but
not to more than ninety (90) calendar days after the Trigger Date, in order that
the Company may seek stockholder approval for the authorization of such
additional shares (such period, as it may be extended, being referred to herein
as the "Substitution Period"). To the extent that the Company determines that
some action need be taken pursuant to the foregoing provisions 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 the first sentence of
this Section 11(a)(iii) and to determine the value thereof. In the event of any
such suspension, the Company shall issue a public announcement stating that the
exercisability of the Rights has been temporarily suspended, as well as a public
announcement at such time as the suspension is no longer in effect, in each case
with simultaneous notice to the Rights Agent. For purposes of this Section
11(a)(iii), the terms of any Common Stock Equivalent shall be determined so that
the per share or per unit value of such Common Stock Equivalent shall have the
same value as the "current market price" per
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share of Common Stock (as determined pursuant to Section 11(d) hereof on the
date of the first occurrence of the Stock Acquisition Date).
(b) In case the Company shall fix a record date for the issuance of
rights, options or warrants to all holders of Preferred Shares entitling them
(for a period expiring within forty-five (45) calendar days after such record
date) to subscribe for or purchase Preferred Shares (or shares having
substantially the same rights, privileges, and preferences as the Preferred
Shares ("Equivalent Preferred Shares")) or securities convertible into Preferred
Shares or Equivalent Preferred Shares at a price per Preferred Share or
Equivalent Preferred Share (or having a conversion price per share, if a
security convertible into Preferred Shares or Equivalent Preferred Shares) less
than the current market price per Preferred Share (as determined pursuant to
Section 11(d) hereof) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, of which the
numerator shall be the number of Preferred Shares and Equivalent Preferred
Shares outstanding on such record date plus the number of Preferred Shares which
the aggregate offering price of the total number of Preferred Shares and/or
Equivalent Preferred Shares to be so offered (and/or the aggregate initial
conversion price of the convertible securities to be so offered) would purchase
at such current market price and of which the denominator shall be the number of
Preferred Shares and Equivalent Preferred Shares outstanding on such record date
plus the number of additional 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). In case such
subscription price may be paid in a consideration part or all of which shall be
in a form other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent. Preferred Shares owned by
or held for the account of the Company or any of its Subsidiaries shall not be
deemed outstanding for the purpose of any such computation. Such adjustment
shall be made successively whenever such a record date is fixed; and in the
event that such rights, options or warrants are not so issued, the Purchase
Price shall again be adjusted to be the Purchase Price which would then be in
effect if such record date had not been fixed.
(c) In case the Company shall fix a record date for the making of a
distribution to all holders of 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 or assets
(other than a regular quarterly cash dividend at a rate per Preferred Share not
in excess of the greater of (x) two hundred (200) times the rate of the last
quarterly cash dividend per share of Common Stock theretofore paid and (y) $5.00
per quarter, or a dividend payable in Preferred Shares) or subscription rights
or warrants (excluding those referred to in Section 11(b) hereof), the Purchase
Price to be in effect after such record date shall be determined by multiplying
the Purchase Price in effect immediately prior to such record date by a
fraction, the numerator of which shall be the current market price per Preferred
Share (as determined pursuant to
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Section 11(d) hereof) on such record date, less the fair market value (as
determined in good faith by the Board of Directors, whose determination shall be
described in a statement filed with the Rights Agent) of the portion of the
assets or evidences of indebtedness so to be distributed or of such subscription
rights or warrants applicable to one Preferred Share and of which the
denominator shall be such current market price per Preferred Share. Such
adjustments shall be made successively whenever such a record date is fixed; and
in the event that such distribution is not so made, the Purchase Price shall
again be adjusted to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, and subject to
Section 11(d)(ii), the "current market price" for any security (a "Security" for
purposes of this Section 11(d)(i)) on any date shall be deemed to be the average
of the daily closing prices per share of such Security for the thirty (30)
consecutive Trading Days immediately prior to such date; provided, however, that
in the event that the current market price per share of the Security is
determined during a period following the announcement by the issuer of such
Security of a dividend or distribution on such Security payable in such Security
or securities convertible into or exercisable or exchangeable for such Security,
or any subdivision, split, combination, consolidation or reclassification of
such Security, and prior to the expiration of thirty (30) Trading Days after the
ex-dividend date for such dividend or distribution or the record date for such
subdivision, split, combination, consolidation or reclassification, then, and in
each such case, the current market price shall be appropriately adjusted to
reflect ex-dividend or ex-distribution trading. The closing price for each day
shall be the last sale price, regular way, or, in case no such sale takes place
on such day, the average of the closing bid and asked prices, regular way, in
either case as reported in the principal consolidated transaction reporting
system with respect to securities listed or admitted to trading on the New York
Stock Exchange, Inc. ("NYSE") or, if the Security is not listed or admitted to
trading on the NYSE, as reported in the principal consolidated transaction
reporting system with respect to securities listed on the principal national
securities exchange on which the Security is listed or admitted to trading or,
if the Security is not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by the
National Association of Securities Dealers, Inc. Automated Quotation System or
any successor ("NASDAQ") or such other system then in use, or, if on any such
date the Security is 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 Security selected by the Board of Directors. If on such date no
such market maker is making a market in the Security, the fair value of such
shares on such date as determined in good faith by the Board of Directors shall
be used, such determination to be described in a statement filed with the Rights
Agent. The term "Trading Day" shall mean a day on which the principal national
securities exchange on which the Security is listed or admitted to trading is
open for the transaction of business or, if the Security is not listed or
admitted to trading on any national securities exchange but is quoted on NASDAQ,
a day on which NASDAQ is
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in operation or if the Security is neither listed nor admitted to trading on any
national securities exchange nor quoted on NASDAQ, a Business Day.
(ii) For the purpose of any computation hereunder, the "current
market price" of the Preferred Shares shall be determined in accordance with the
method set forth in Section 11(d)(i), except that if the Preferred Shares are
not publicly traded, the "current market price" of the Preferred Shares shall be
conclusively deemed to be the current per share market price of the Common Stock
as determined pursuant to Section 11(d)(i), multiplied by one hundred (as such
number may be appropriately adjusted for stock splits, stock dividends,
recapitalizations and similar events after the date of this Agreement). If
neither the shares of Common Stock nor the Preferred Shares are publicly held or
so listed or traded, the "current per share market price" shall mean the fair
value per share as determined in good faith by an independent investment banking
firm selected in good faith by the Board of Directors, whose determination shall
be described in a statement filed with the Rights Agent and shall be conclusive
for all purposes.
(e) Notwithstanding any other provision of this Agreement to the
contrary, no adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%) in
such price; provided, however, that any adjustments which by reason of this
Section 11(e) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Section
11 shall be made to the nearest cent or to the nearest ten-thousandth of a share
of Common Stock or other security or to the nearest one one-millionth of a
Preferred Share. Notwithstanding the first sentence of this Section 11(e), any
adjustment required by this Section 11 shall be made no later than the earlier
of (i) three years from the date of the transaction which mandates such
adjustment and (ii) the date of the expiration of the right to exercise any
Rights.
(f) In the event that at any time, 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 securities other than Preferred
Shares, thereafter the number or amount of such other securities so receivable
upon exercise of any Right shall be subject to adjustment from time to time in a
manner and on terms as nearly equivalent as practicable to the provisions with
respect to the securities contained in Sections 11(a), (b), (c), (e), (g), (h),
(i), (j), (k) and (m), and the provisions of Sections 7, 9, 10, 13 and 14 of
this Agreement with respect to the Preferred Shares shall apply on like terms to
any such other securities.
(g) All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of one one-hundredths of a
Preferred Share purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
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(h) Unless the Company shall have exercised its election as provided
in Section 11(i) of this Agreement, upon each adjustment of the Purchase Price
as a result of the calculations made in Section 11(b) and (c) of this Agreement,
each Right outstanding immediately prior to the making of such adjustment shall
thereafter evidence the right to purchase, at the adjusted Purchase Price, that
number of one one-hundredths of a Preferred Share (calculated to the nearest one
one-millionth of a Preferred Share) obtained by (i) multiplying (x) the number
of one one-hundredths of a Preferred Share covered by a Right immediately prior
to such adjustment by (y) the Purchase Price in effect immediately prior to such
adjustment of the Purchase Price and (ii) dividing the product so obtained by
the Purchase Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Company may elect on or after the date of any adjustment of
the Purchase Price to adjust the number of Rights, in substitution for any
adjustment in the number of one one-hundredths of a Preferred Share purchasable
upon the exercise of a Right. Each of the Rights outstanding after such
adjustment of the number of Rights shall be exercisable for the number of one
one-hundredths of a Preferred Share for which it 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 Right
Certificates have been issued, shall be at least ten (10) calendar days later
than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i) the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date, Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and 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 Right Certificates
on the record date specified in the public announcement.
(j) Irrespective of any adjustment or change in the Purchase Price
or the number of one one-hundredths of a Preferred Share issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase
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Price per share and the number of one one-hundredths of a Preferred Share which
were expressed in the initial Right Certificates issued hereunder.
(k) Before taking any action that would cause an adjustment reducing
the Purchase Price below one-hundredth of the then par value, if any, of the
Preferred Shares issuable upon exercise of the Rights, the Company shall take
any corporate action which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable Preferred Shares 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 issuing to the holder of any Right exercised after such record date of
the Preferred Shares and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the Preferred Shares and other
capital stock or securities of the Company, if any, issuable upon such exercise
on the basis of the Purchase Price in effect prior to such adjustment; provided,
however, that the Company shall deliver to such holder a due xxxx or other
appropriate instrument evidencing such holder's right to receive such additional
shares upon the occurrence of the event requiring such adjustment.
(m) Notwithstanding any provision of this Section 11 to the
contrary, the Company shall be entitled to make such reductions in the Purchase
Price, in addition to those adjustments expressly required by this Section 11,
as and to the extent that the Board of Directors shall, in its sole discretion
determine to be advisable in order that any (i) consolidation or subdivision of
the Preferred Shares, (ii) issuance wholly for cash of any Preferred Shares at
less than the current market price, (iii) issuance wholly for cash of Preferred
Shares or securities which by their terms are convertible into or exercisable or
exchangeable for Preferred Shares, (iv) stock dividends or (v) issuance of
rights, options or warrants referred to hereinabove in this Section 11,
hereafter made by the Company to holders of its Preferred 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
wholly-owned Subsidiary of the Company in a transaction which does not violate
Section 11(o) hereof), (ii) merge with or into any other Person (other than a
wholly-owned Subsidiary of the Company in a transaction which does not violate
Section 11(o) hereof), or (iii) sell or transfer (or permit any Subsidiary to
sell or transfer), in one transaction, or a series of related transactions,
assets or earning power aggregating more than fifty percent (50%) of the assets
or earning power of the Company and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Company and/or any of its Subsidiaries
in one or more transactions each of which does not violate Section 11(o)
hereof), if (x) at the time of or immediately after such consolidation, merger,
sale or transfer there are any charter or by-law provisions or any rights,
warrants or other instruments or securities outstanding or
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agreements in effect or other actions taken, which would materially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after such consolidation, merger or
sale, the stockholders of the Person who constitutes, or would constitute, the
"Principal Party" for purposes of Section 13(a) hereof shall have received a
distribution of Rights previously owned by such Person or any of its Affiliates
and Associates. The Company shall not consummate any such consolidation, merger,
sale or transfer unless prior thereto the Company and such other Person shall
have executed and delivered to the Rights Agent a supplemental agreement
evidencing compliance with this Section 11(n).
(o) The Company covenants and agrees that, after a Stock Acquisition
Date it will not, except as permitted by Section 24 or Section 27 hereof, take
(or permit any Subsidiary to take) any action the purpose of which is to, or if
at the time such action is taken it is reasonably foreseeable that the effect of
such action is to, materially diminish or eliminate the benefits intended to be
afforded by the Rights.
(p) Notwithstanding any other provision of this Agreement to the
contrary, in the event that the Company shall, at any time after the date of
this Agreement and prior to the Distribution Date, (i) declare or pay any
dividend on the outstanding shares of Common Stock payable in shares of Common
Stock (other than the Stock Split), (ii) subdivide the outstanding shares of
Common Stock, (iii) combine or consolidate the outstanding shares of Common
Stock into a smaller number of shares, or (iv) effect a reclassification of its
outstanding shares of Common Stock, the number of one one-hundredths of a
Preferred Share so purchasable after such event upon proper exercise of each
Right shall be determined by multiplying the number of one one-hundredths of a
Preferred Share so purchasable immediately prior to such event by a fraction,
the numerator of which shall be the total number of shares of Common Stock
outstanding immediately prior to such event and the denominator of which shall
be the total number of shares of Common Stock outstanding immediately following
such event. The adjustments provided for in this Section 11(p) shall be made
successively whenever such a dividend is declared or paid or such a subdivision,
combination or consolidation is effected. If an event occurs which would require
an adjustment under Section 11(a)(ii) and this Section 11(p), the adjustments
provided for in this Section 11(p) shall be in addition and prior to any
adjustment required pursuant to Section 11(a)(ii).
Section 12. Certification of Adjusted Purchase Price or Number of
Shares. Whenever an adjustment is made as provided in Sections 11 or 13 hereof,
the Company shall (a) promptly prepare a certificate setting forth such
adjustment and a brief statement of the facts accounting for such adjustment,
(b) promptly file with the Rights Agent and with each transfer agent for the
Preferred Shares or the shares of Common Stock a copy of such certificate. The
Rights Agent shall be fully protected in relying on such certificate and on any
adjustment contained therein and shall not be deemed to have knowledge of any
such adjustment unless and until it shall have received such certificate.
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Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. (a) In the event (a "Section 13 Event") that, following the Stock
Acquisition Date, directly or indirectly, (x) the Company shall consolidate
with, or merge with and into, any Person or Persons, (y) any Person or Persons
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
(other than, in the case of any transaction described in (x) or (y), a merger or
consolidation which would result in all of the securities generally entitled to
vote in the election of directors ("voting securities") of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into securities of the surviving
entity) all of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation and holders of such
securities not having changed as a result of such merger or consolidation), or
(z) the Company shall sell or otherwise transfer (or one or more of its
Subsidiaries shall sell or otherwise transfer), in one or a series of related
transactions, assets or earning power aggregating more than fifty percent (50%)
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole and calculated on the basis of the Company's most recent regularly
prepared financial statements) to any Person or Persons (other than the Company
or any Subsidiary of the Company in one or more transactions each of which does
not violate Section 11(o) hereof), then, and in each such case (except as
provided in Section 13(d) hereof), proper provision shall be made so that (i)
each holder of a Right, except as provided in Section 7(e) hereof, shall
thereafter have the right to receive, upon the exercise thereof at the then
current Purchase Price in accordance with the terms of this Agreement and in
lieu of the Preferred Shares, shares of Common Stock and other securities or
assets of the Company, such number of validly authorized and issued, fully paid,
non-assessable and freely tradable shares of Common Stock of the Principal
Party, not subject to any liens, encumbrances, rights of first refusal,
preemptive rights or other adverse claims, as shall be equal to the result
obtained by (A) multiplying the then current Purchase Price by the number of one
one-hundredths of a Preferred Share for which a Right was exercisable
immediately prior to the first occurrence of a Section 13 Event (without taking
into account any adjustment previously made pursuant to Section 11(a)(ii)) and
(y) dividing that product by fifty percent (50%) of the current market price per
share of the Common Stock of such Principal Party (determined pursuant to
Section 11(d) hereof) on the date of consummation of such Section 13 Event; (ii)
such Principal Party shall thereafter be liable for, and shall assume, by virtue
of such Section 13 Event, all the obligations and duties of the Company pursuant
to this Agreement; (iii) the term "Company" shall thereafter be deemed to refer
to such Principal Party, it being specifically intended that the provisions of
Section 11 hereof shall apply only to such Principal Party following the first
occurrence of a Section 13 Event; and (iv) such Principal Party shall take such
steps (including, but not limited to, the reservation of a sufficient number of
shares of its Common Stock in accordance with Section 9 hereof (applying the
provisions thereof with respect to Preferred Shares of the Company to the shares
of Common Stock of such Principal Party)) in connection with such consummation
as may be necessary to assure that the provisions hereof shall thereafter be
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applicable, as nearly as reasonably may be possible, in relation to the shares
of its Common Stock thereafter deliverable upon the exercise of the Rights.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a): (A) the Person that is the
issuer of any securities into which Common Stock of the Company is
converted in such merger or consolidation, or, if there is more than one
such issuer, the issuer of whose Common Stock has the greatest aggregate
market value or (B) if no securities are so issued, the Person that is the
other party to such merger or consolidation, or, if there is more than one
such Person, the Person whose Common Stock has the greatest aggregate
market value (including, if applicable, the Company if it is the surviving
corporation); and
(ii) in the case of any transaction described in clause (z) of
the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions or if the Person receiving
the greatest portion of the assets or earning power cannot be determined,
whichever of such Persons whose Common Stock has the greatest aggregate
market value;
provided, however, that in any of the cases described in Section 13(b)(i) or
(b)(ii) above, (1) if the shares of Common Stock of such Person are not at such
time and have not been continuously over the preceding twelve (12) month period
registered under Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the shares of Common Stock of which are
and have been so registered, "Principal Party" shall refer to such other Person;
(2) in case such Person is a Subsidiary, directly or indirectly, of more than
one Person, the shares of Common Stock of two or more of which are and have been
so registered, "Principal Party" shall refer to whichever of such Persons whose
Common Stock has the greatest aggregate market value; and (3) in case such
Person is owned, directly or indirectly, by a joint venture formed by two or
more Persons that are not owned, directly or indirectly, by the same Person, the
rules set forth in (1) and (2) above shall apply to each of the chains of
ownership having an interest in such joint venture as if such party were a
"Subsidiary" of both or all of such joint ventures and the Principal Parties in
each such chain shall bear the obligations set forth in this Section 13 in the
same ratio as their direct or indirect interests in such Person bear to the
total of such interests.
(c) The Company shall not consummate any such consolidation, merger,
sale or transfer unless the Principal Party shall have a sufficient number of
its authorized shares of Common Stock which have not been issued or reserved for
issuance to permit the exercise in full of the Rights in accordance with this
Section 13 and unless prior thereto the Company and such Principal Party shall
have executed and delivered to the Rights Agent a
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supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and that all rights of first refusal or preemptive rights
in respect of the issuance of shares of Common Stock of the Principal Party upon
exercise of the outstanding Rights have been waived and that such transaction
shall not result in a default by the Principal Party under this Agreement, and
further providing that, as soon as practicable after the date of any
consolidation, merger, sale or transfer mentioned in paragraph (a) of this
Section 13, the Principal Party at its own expense shall:
(i) prepare and file a registration statement under the Act
with respect to the Rights and the securities purchasable upon the exercise of
the Rights on an appropriate form, and use its best efforts to cause such
registration statement to become effective as soon as practicable after such
filing and to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Final Expiration Date;
(ii) use its best efforts to qualify or register the Rights
and the securities purchasable upon exercise of the Rights under the blue sky
laws of such jurisdictions as may be necessary or appropriate;
(iii) deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with the
requirements for registration on Form 10 under the Exchange Act; and
(iv) use its best efforts to list (or continue the listing of)
the Rights and the securities purchasable upon exercise of the Rights on a
national securities exchange or to meet the eligibility requirements for
quotation on NASDAQ.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that a Section 13 Event shall occur at any time after the occurrence of a Stock
Acquisition Date, the Rights which have not theretofore been exercised pursuant
to Section 11(a)(ii) shall thereafter become exercisable in the manner described
in Section 13(a).
(d) Notwithstanding any other provision of this Agreement to the
contrary, Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if: (i) such transaction is
consummated with a Person or Persons who acquired shares of Common Stock
pursuant to an Approved Offer (or an Affiliate of any such Person or Persons) as
promptly as reasonably practical (and in any event within one year) following
consummation of such Approved Offer; (ii) the price per share of Common Stock
offered in such transaction is not less than the price per share of Common Stock
paid to all holders of Common Stock whose shares were purchased pursuant to such
Approved Offer; and (iii) the form of consideration offered in such transaction
is the same as the form of consideration paid pursuant to such Approved Offer.
Upon consummation of any such transaction contemplated by this Section 13(d),
all Rights hereunder shall expire.
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(e) In case the Principal Party which is to be a party to a
transaction referred to in this Section 13 has provision in any of its
authorized securities or in its Certificate of Incorporation or By-Laws or other
instrument governing its corporate affairs, which provision would have the
effect of (i) causing such Principal Party to issue, in connection with, or as a
consequence of, the consummation of a transaction referred to in this Section
13, shares of Common Stock of such Principal Party at less than the then current
market price per share (determined pursuant to Section 11(d) hereof) or
securities exercisable or exchangeable for, or convertible into, Common Stock of
such Principal Party at less than such then current market price (other than to
holders of Rights pursuant to this Section 13) or (ii) providing for any special
payment, tax or similar provisions in connection with the issuance of the Common
Stock of such Principal Party pursuant to the provisions of Section 13, then, in
such event, the Company shall not consummate any such transaction unless prior
thereto the Company and such Principal Party shall have executed and delivered
to the Rights Agent a supplemental agreement providing that the provision in
question of such Principal Party shall have been cancelled, waived or amended,
or that the authorized securities shall be redeemed, so that the applicable
provision will have no effect in connection with, or as a consequence of, the
consummation of the proposed transaction.
(f) In no event shall the Rights Agent have any liability in respect
of any such Principal Party transaction, including without limitation, the
propriety thereof. The Rights Agent may rely and be fully protected in relying
upon a certificate of the Company stating that the provisions of this Section 13
have been fulfilled. Notwithstanding anything in this Agreement to the contrary,
the prior written consent of the Rights Agent must be obtained in connection
with any supplemental agreement which alters the rights or duties of the Rights
Agent.
Section 14. Fractional Rights and Fractional Shares. (a) The Company
shall not be required to issue fractions of Rights (except, prior to the
Distribution Date, as provided in Section 11 hereof) or to distribute Right
Certificates which evidence fractional Rights. In lieu of such fractional
Rights, there shall be paid to the registered holders of the Right Certificates
with regard to which such fractional Rights would otherwise be issuable, an
amount in cash equal to the same fraction of the current market value of a whole
Right. For the purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the Trading Day
immediately prior to the date on which such fractional Rights would have been
otherwise issuable. The closing price of the Rights for any day shall be the
last sale price, regular way, or, in case no such sale takes place on such day,
the average of the closing bid and asked prices, regular way, in either case as
reported in the principal consolidated transaction reporting system with respect
to securities listed or admitted to trading on the NYSE or, if the Rights are
not listed or admitted to trading on the NYSE, as reported in the principal
consolidated transaction reporting system with respect to securities listed on
the principal national securities exchange on which the Rights are listed or
admitted to trading or, if the Rights are not listed or admitted to trading on
any national securities exchange, the last quoted price or, if not so quoted,
the average of the high bid and
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low asked prices in the over-the-counter market, as reported by NASDAQ or such
other system then in use or, if on any such date the Rights are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Rights, as
selected by the Board of Directors. If on any such date the Rights are not
quoted by any such organization and no professional market maker is making such
a market in the Rights, the fair value of the Rights on such date as determined
in good faith by the Board of Directors shall be used.
(b) The Company shall not be required to issue fractions of
Preferred Shares (other than fractions which are integral multiples of one
one-hundredth of a Preferred Share) upon exercise of the Rights or to distribute
certificates which evidence fractional Preferred Shares (other than fractions
which are integral multiples of one one-hundredth of a Preferred Shared).
Fractions of Preferred Shares in integral multiples of one one-hundredth of a
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 Preferred
Shares represented by such depositary receipts. In lieu of fractional Preferred
Shares that are not integral multiples of one one-hundredth of a Preferred
Share, the Company shall pay to the registered holders of Right Certificates at
the time such Rights are exercised as herein provided an amount in cash equal to
the same fraction of the current market value of one Preferred Share. For
purposes of this Section 14(b), the current market value of a Preferred Share
shall be the closing price of a Preferred Share (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of such exercise.
(c) Following the occurrence of the Stock Acquisition Date or a
Section 13 Event, the Company shall not be required to issue fractions of shares
of its Common Stock upon exercise of the Rights or to distribute certificates
which evidence fractional shares of its Common Stock. In lieu of fractional
shares of its Common Stock, the Company may pay to the registered holders of
Right Certificates at the time such Rights are exercised as herein provided an
amount in cash equal to the same fraction of the current market value of one
share of its Common Stock. For purposes of this Section 14(c), the current
market value of one share of Common Stock of the Company shall be the closing
price of one share of Common Stock of the Company (as determined pursuant to
11(d)(i)) for the Trading Day immediately prior to the date of such exercise.
(d) The holder of a Right by the acceptance thereof expressly waives
any right to receive any fractional Rights or any fractional shares upon
exercise of a Right (except as provided above).
Section 15. Rights of Action. All rights of action in respect of
this Agreement, other than the rights of action vested in the Rights Agent
pursuant to Section 18,
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are vested in the respective registered holders of the Right Certificates (and,
prior to the Distribution Date, the registered holders of the shares of Common
Stock); and any registered holder of any Right Certificate (or, prior to the
Distribution Date, of the shares of Common Stock), without the consent of the
Rights Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, any holder of the shares of Common Stock), may, on his or her
own behalf and for his or her own benefit, enforce, and may institute and
maintain any suit, action or proceeding against the Company to enforce, or
otherwise act in respect of, his or her right to exercise the Rights evidenced
by such Right Certificate in the manner provided in such Right Certificate and
in this Agreement. Without limiting the foregoing or any remedies available to
the holders of Rights, it is specifically acknowledged that the holders of
Rights would not have an adequate remedy at law for any breach of this Agreement
and will be entitled to specific performance of the obligations under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same, consents and agrees with the Company and the Rights Agent
and with every other holder of a Right that:
(a) prior to the Distribution Date, the Rights will be transferable
only simultaneously and together with the transfer of shares of Common Stock;
(b) after the Distribution Date, the Right Certificates are
transferable only on the registry books of the Rights Agent if surrendered at
the principal office or such other office of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper instrument of transfer
and with the appropriate forms and certificates fully executed;
(c) subject to Section 6, Section 7(f) and Section 11(a) hereof, the
Company and the Rights Agent may deem and treat the person in whose name the
Right Certificate (or, prior to the Distribution Date, the associated Common
Stock certificate) is registered as the absolute owner thereof and of the Rights
evidenced thereby (notwithstanding any notations of ownership or writing on the
Right Certificates or the associated Common Stock certificate made by anyone
other than the Company or the Rights Agent) for all purposes whatsoever, and
neither the Company nor the Rights Agent shall be required to be affected by any
notice to the contrary; and
(d) notwithstanding any other provision of this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling issued by a court of
competent jurisdiction or by a governmental, regulatory or administrative agency
or commission, or any statute, rule, regulation or executive order promulgated
or enacted by any governmental authority, prohibiting or otherwise restraining
performance of
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such obligation; provided, however, that the Company must use its best efforts
to have any such injunction, order, decree or ruling lifted, dissolved or
otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Stockholder. No
holder, as such, of any Right Certificate shall be entitled to vote, receive
dividends or be deemed for any purpose the holder of Preferred Shares or any
other securities of the Company which may at any time be issuable on the
exercise of the Rights represented thereby, nor shall anything contained herein
or in any Right Certificate be construed to confer upon the holder of any Right
Certificate as such, any of the rights of a stockholder of the Company or any
right to vote for the election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
stockholders (except as provided in Section 25 hereof), or to receive dividends
or other distributions or to exercise any preemptive or subscription rights, or
otherwise, until the Right or Rights evidenced by such Right Certificate shall
have been exercised in accordance with the provisions hereof.
Section 18. Concerning the Rights Agent. The Company agrees to pay
to the Rights Agent such compensation as shall be agreed in writing between the
Company and the Rights Agent for all services rendered by it hereunder and, from
time to time, on demand of the Rights Agent, its reasonable expenses and counsel
fees and other disbursements incurred in the administration and execution of
this Agreement and the exercise and performance of its duties hereunder. The
Company also agrees to indemnify the Rights Agent for, and to hold it harmless
against, any and all loss, liability, damage, claim or expense, incurred without
gross negligence, bad faith or willful misconduct on the part of the Rights
Agent, for anything done or omitted by the Rights Agent in connection with the
acceptance and administration of this Agreement, including the costs and
expenses of defending against any claim of liability.
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 Right Certificate or
certificate for Common Stock or for other securities of the Company, instrument
of assignment or transfer, power of attorney, endorsement, affidavit, letter,
notice, direction, consent, certificate, opinion, statement, or other paper or
document believed by it to be genuine and to be signed and executed by the
proper person or persons and, where necessary, to be verified or acknowledged.
The provisions of this Section 18 shall survive the expiration of
the Rights and the termination of this Agreement.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent. 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
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consolidation to which the Rights Agent or any successor Rights Agent shall be a
party, or any corporation succeeding to all or substantially all the corporate
trust or stock transfer business of the Rights Agent or any successor Rights
Agent, shall be the successor to the Rights Agent under this Agreement without
the execution or filing of any paper or any further act on the part of any of
the parties hereto, provided that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the Right Certificates shall have been
countersigned but not delivered, any such successor Rights Agent may adopt the
countersignature of the predecessor Rights Agent and deliver such Right
Certificate so countersigned; and in case at that time any of the Right
Certificates shall not have been countersigned, any successor Rights Agent may
countersign such Right Certificate either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificate shall have the full force provided in the Right Certificate
and in this Agreement.
In case at any time the name of the Rights Agent shall be changed
and at such time any of the Right Certificates shall have been countersigned but
not delivered, the Rights Agent may adopt the countersignature under its prior
name and deliver Right Certificates so countersigned; and in case at that time
any of the Right Certificates shall not have been countersigned, the Rights
Agent may countersign such Right Certificates either in its prior name or in its
changed name; and in all such cases such Right Certificates shall have the full
force provided in the Right Certificates and in this Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes only
those duties and obligations imposed by this Agreement upon the following terms
and conditions, and no implied duties or obligations shall be read into this
Agreement against the Rights Agent, by all of which the Company and the holders
of Right Certificates, by their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel of its own
selection (who may be legal counsel for the Company), and the opinion of such
counsel shall be full and complete authorization and protection to the Rights
Agent as to any action taken or omitted by it in good faith and in accordance
with such opinion.
(b) Whenever in the performance of its duties under this Agreement
the Rights Agent shall deem it necessary or desirable that any fact or matter
(including, without limitation, the identity of any Acquiring Person or any
Affiliate or Associate thereof and the determination of the current market price
per share of any Security) be proved or established by the Company prior to
taking or suffering any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by the Chairman
of the Board, the Chief Executive Officer, the President, any Vice President,
the Treasurer or the Secretary of the Company and delivered to the Rights Agent;
and such certificate shall be full
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authorization to the Rights Agent for any action taken or omitted by it in good
faith under the provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence, bad faith or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Agreement or in the Right
Certificates (except its countersignature thereof), or be required to verify the
same, but all such statements and recitals are and shall be deemed to have been
made by the Company only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and delivery hereof
(except the due execution hereof by the Rights Agent) or in respect of the
validity or execution of any Right Certificate (except its countersignature
thereof); nor shall it be responsible for any breach by the Company of any
covenant or condition contained in this Agreement or in any Right Certificate;
nor shall it be responsible for any change in the exercisability of the Rights
(including Rights becoming null and void pursuant to Section 7(e) hereof); nor
shall it be responsible for any adjustment required under the provisions of
Sections 11 or 13 hereof or responsible for the manner, method or amount of any
such adjustment or the ascertaining of the existence of facts that would require
any such adjustment (except with respect to the exercise of Rights evidenced by
Right Certificates after the Rights Agent's actual receipt of a certificate
described in Section 12 hereof); nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of
any Preferred Shares or shares of Common Stock or other securities to be issued
pursuant to this Agreement or any Right Certificate or as to whether any
Preferred Shares or shares of Common Stock or other securities will, when
issued, be validly authorized and issued, fully paid and nonassessable; and nor
shall it be responsible for the legality of the terms hereof in its capacity as
an administrative agent.
(f) The Company agrees that it will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the Company, and to apply to such
officers for advice or instructions in connection with its duties, and it shall
not be liable for any action taken or suffered to be taken by it in good faith
in accordance with instructions of any such officer or for any delay in acting
while waiting for such instructions. Any application by the Rights Agent for
written instructions from the Company may, at the option of the Rights Agent,
set forth in writing any action
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proposed to be taken or omitted by the Rights Agent under this Rights Agreement
and the date on and/or after which such action shall be taken or such omission
shall be effective. The Rights Agent shall not be liable for any action taken
by, or omission of, the Rights Agent in accordance with a proposal included in
any such application on or after the date specified in such application (which
date shall not be less than five (5) Business Days after the date any officer of
the Company actually receives such application, unless any such officer shall
have consented in writing to an earlier date) unless, prior to taking any such
action (or the effective date in the case of an omission), the Rights Agent
shall have received written instructions in response to such application
specifying the action to be taken or omitted.
(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 Rights Agent
under this Agreement. Nothing herein shall preclude the Rights Agent from acting
in any other capacity for the Company or for any other legal entity, except it
may not act for an Acquiring Person in an investment banking capacity, or
otherwise assist an Acquiring Person in ways hostile to the Company, without the
written consent of the Company.
(i) The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, omission, default, neglect or misconduct of any such
attorneys or agents or for any loss to the Company resulting from any such act,
omission, default, neglect or misconduct, provided reasonable care was exercised
in the selection thereof.
(j) If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate attached to the form of
assignment or form of election to purchase, as the case may be, has either not
been completed or indicates an affirmative response to any item therein, the
Rights Agent shall not take any further action with respect to such requested
exercise or transfer without first consulting with the Company.
(k) No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
there shall be reasonable grounds for
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believing that repayment of such funds or adequate indemnification against such
risk or liability is not reasonably assured to it.
(l) In addition to the foregoing, the Rights Agent shall be
protected and shall incur no liability for, or in respect of, any action taken
or omitted by it in connection with its administration of this Agreement if such
acts or omissions are in reliance upon (i) the proper execution of the
certificates concerning beneficial ownership appended to the form of assignment
and the form of election to purchase attached hereto unless the Rights Agent
shall have actual knowledge that, as executed, any such certificate is untrue,
or (ii) the non-execution of any such certificate including, without limitation,
any refusal to honor any otherwise permissible assignment or election by reason
of such non-execution.
(m) The Company agrees to give the Rights Agent prompt written
notice of any event or ownership which would prohibit the exercise or transfer
of the Right Certificates.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Agreement upon thirty (30) days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock by registered or certified mail. The
Company may remove the Rights Agent or any successor Rights Agent upon thirty
(30) days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock and
Preferred Shares by registered or certified mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of acting, the Company
shall appoint a successor to the Rights Agent. If the Company shall fail to make
such appointment within a period of sixty (60) 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
Right Certificate (who shall, with such notice, submit his or her Right
Certificate for inspection by the Company), then the Rights Agent or the
registered holder of any Right Certificate may apply at the expense of the
Company 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, bank or trust company organized and doing
business under the laws of the United States or of the State of New York (or any
other state of the United States so long as such corporation is authorized to do
business as a banking institution in the State of New York) in good standing,
having an office in the State of New York, which is authorized under such laws
to exercise corporate trust or stock transfer powers and is subject to
supervision or examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and surplus of at
least $50,000,000. After appointment, the successor Rights Agent shall be vested
with the same powers, rights, duties and responsibilities as if it had been
originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further
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assurance, conveyance, act or deed necessary for the purpose. Not later than the
effective date of any such appointment, the Company shall file notice thereof in
writing with the predecessor Rights Agent and each transfer agent of the Common
Stock and Preferred Shares, and mail a notice thereof in writing to the
registered holders of the Right Certificates. Failure to give any notice
provided for in this Section 21, however, or any defect therein, shall not
affect the legality or validity of the resignation or removal of the Rights
Agent or the appointment of the successor Rights Agent, as the case may be.
Notwithstanding the foregoing provision, in the event of resignation, removal or
incapacity of the Rights Agent, the Company shall have the authority to act as
the Rights Agent until a successor Rights Agent shall have assumed the duties of
the Rights Agent hereunder.
Section 22. Issuance of New Right Certificate. Notwithstanding any
of the provisions of this Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by the Board of Directors to reflect any adjustment
or change in the Purchase Price and the number or kind or class of shares of
stock or other securities or property purchasable under the Right Certificates
made in accordance with the provisions of this Agreement.
In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date (other than upon exercise or
exchange of a Right) and prior to the Expiration Date, the Company, subject to
Section 7(e) hereof, (a) shall, with respect to shares of Common Stock so issued
or sold pursuant to the exercise of stock options or under any employee plan or
arrangement, or upon the exercise, conversion or exchange of securities, notes
or debentures issued by the Company, and (b) may, in any other case, if deemed
necessary or appropriate by the Board of Directors, issue Right Certificates
representing the appropriate number of Rights in connection with such issuance
or sale; provided, however, that (i) the Company shall not be obligated to issue
any Right Certificate if, and to the extent that, the Company shall be advised
by counsel that such issuance would create a significant risk of material
adverse tax consequences to the Company or the Person to whom such Rights
Certificate would be issued, and (ii) no such Rights Certificate shall be issued
if, and to the extent that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
Section 23. Redemption. (a) The Company may, by resolution of the
Board of Directors, at its option, at any time prior to the earlier of (x) the
Stock Acquisition Date and (y) the close of business on the Final Expiration
Date, redeem all but not less than all of the then outstanding Rights at a
redemption price of $0.01 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). The redemption of the Rights by the
Board of Directors may be made effective at such time, on such basis and with
such conditions as the Board of Directors in its sole discretion may establish.
The Company may, at its option, pay the Redemption Price in cash, shares of
Common Stock (based on the current market price of the Common Stock
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39
determined pursuant to Section 11(d)(i) hereof) or any other form of
consideration deemed appropriate by the Board of Directors.
(b) Immediately upon adoption of an effective resolution of the
Board of Directors ordering the redemption of the Rights in compliance with
Section 23(a) (or upon the subsequent satisfaction of all conditions to such
redemption established by such resolution), evidence of which shall have been
filed with the Rights Agent, and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price.
Within ten (10) Business Days after the action of the Board of Directors
ordering the redemption of the Rights (or such subsequent satisfaction of all
such conditions), the Company shall give notice of such redemption to the
holders of the then outstanding Rights by mailing such notice to all such
holders at their last addresses as they appear upon the registry books of the
Rights Agent or, prior to the Distribution Date, on the registry books of the
transfer agent for the shares of Common Stock. Any notice which is mailed in the
manner herein provided shall be deemed given, whether or not the holder receives
the notice. Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. Neither the Company nor any of its
Affiliates or Associates may redeem, acquire or purchase any Rights at any time
in any manner other than that specifically set forth in this Section 23 or in
Section 24 hereof, and other than in connection with the repurchase of shares of
Common Stock of the Company prior to the Distribution Date.
(c) In the event that the Board of Directors adopts an effective
resolution ordering the redemption of the Rights in compliance with Section
23(a), the Company may, at its option, discharge all of its obligations with
respect to the Rights by (i) issuing a press release announcing the manner of
redemption of the Rights in accordance with this Agreement and (ii) mailing
payment of the Redemption Price to the registered holders of the Rights at their
last addresses as they appear on the registry books of the Rights Agent or,
prior to the Distribution Date, on the registry books of the transfer agent of
the Common Stock, and upon such action, all outstanding Rights and Right
Certificates shall be null and void without any further action by the Company.
Section 24. Exchange. (a) The Board of Directors may, at its option,
at any time after the Stock Acquisition Date exchange all or part of the
then-outstanding and exercisable Rights (which shall not include Rights that
have become void pursuant to the provisions of Section 7(e) hereof) for shares
of Common Stock (or Common Stock Equivalents) at an exchange ratio of one share
of Common Stock per Right, appropriately adjusted to reflect any stock split,
stock dividend or similar transaction occurring after the date hereof (such
exchange ratio being hereinafter referred to as the "Exchange Ratio").
Notwithstanding the foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than any Company
Entity), together with all
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Affiliates and Associates of such Person, becomes the Beneficial Owner of fifty
percent (50%) or more of the shares of Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors ordering
the exchange of Rights pursuant to and in compliance with subsection (a) of this
Section 24 and without any further action and without any notice, the right to
exercise such Rights shall terminate and the only right thereafter of a holder
of such Rights, which excludes Rights that have become void pursuant to the
provisions of Section 7(e) hereof, shall be to receive that number of shares of
Common Stock, or Common Stock Equivalents, equal to the number of such Rights
held by such holder multiplied by the Exchange Ratio. The Company shall promptly
file notice of such Board action with the Rights Agent and 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 their last addresses as they appear upon the registry books of the
Rights Agent. Any notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice. Each such notice of
exchange will state the method by which the exchange of the shares of Common
Stock for Rights will be effected and, in the event of any partial exchange, the
number of Rights which will be exchanged. Any partial exchange shall be effected
pro rata based on the number of Rights (other than Rights which have become void
pursuant to the provisions of Section 7(e)) held by each holder of Rights.
(c) In the event that there shall not be sufficient shares of Common
Stock issued but not outstanding or authorized but unissued to permit any
exchange of Rights as contemplated in accordance with this Section 24, the
Company shall take all such action as may be necessary to authorize additional
shares of Common Stock for issuance upon exchange of the Rights.
(d) The Company shall not be required, pursuant to this Section 24,
to issue fractions of shares of Common Stock or to distribute certificates which
evidence fractional shares of Common Stock. In lieu of such fractional shares of
Common Stock, the Company shall pay to the registered holders of the Right
Certificates, with regard to which such fractional shares of Common Stock would
otherwise be issuable, an amount in cash equal to the same fraction of the
current market value of a whole share of Common Stock. For the purposes of this
paragraph (d), the current market value of a whole share of Common Stock shall
be the closing price of a share of Common Stock (as determined pursuant to the
second sentence of Section 11(d)(i) hereof) for the Trading Day immediately
prior to the date of exchange pursuant to this Section 24, and the value of any
Common Stock Equivalent shall be deemed to have the same current market value as
the Common Stock on such date.
Section 25. Notice of Certain Events. (a) In case the Company shall
propose (a) to pay any dividend payable in stock of any class to the holders of
its Preferred Shares (or, after the Distribution Date, holders of the shares of
Common Stock) or to make any
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other distribution to the holders of its Preferred Shares (or, after the
Distribution Date, holders of the shares of Common Stock), other than a regular
quarterly cash dividend at a rate per Preferred Share not in excess of the
greater of (x) two hundred (200) times the rate of the last quarterly cash
dividend per share of Common Stock theretofore paid and (y) $5.00 per quarter or
(b) to offer to the holders of its Preferred Shares (or, after the Distribution
Date, holders of the shares of Common Stock) rights, options or warrants to
subscribe for or to purchase any additional Preferred Shares or shares of stock
of any class or any other securities, rights or options, or (c) to effect any
reclassification of its Preferred Shares (other than a reclassification
involving only the subdivision of outstanding Preferred Shares), or (d) after
the Distribution Date, to effect any merger, consolidation or other combination
with or into any Person (other than a Subsidiary of the Company in a transaction
which does not violate Section 11(o) hereof), or to effect any sale or other
transfer (or to permit one or more of its Subsidiaries to effect any sale or
other transfer), in one or more transactions, of more than fifty percent (50%)
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons (other than the Company and/or any of its
Subsidiaries in one or more transactions each of which does not violate Section
11(o) hereof), or (e) after the Distribution Date, to effect the liquidation,
dissolution or winding up of the Company, then, in each such case, the Company
shall give to each holder of a Right, in accordance with Section 26 hereof, a
notice of such proposed action to the extent feasible and file a certificate
with the Rights Agent to that effect, which shall specify the record date for
the purposes of such stock dividend, distribution of rights or Rights, or the
date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the date of
participation therein by the holders of shares of Common Stock and/or 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 (a) or (b) above at least ten (10) days
prior to the record date for determining holders of the Preferred Shares for
purposes of such action, and in the case of any such other action, at least
twenty (20) days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of shares of Common Stock and/or
Preferred Shares, whichever shall be earlier. The failure to give notice
required by this Section 24 or any defect therein shall not affect the legality
or validity of the action taken by the Company or the vote upon any such action.
(b) Upon the Stock Acquisition Date (i) the Company shall as soon as
practicable thereafter give to the Rights Agent and each holder of a Right
Certificate, to the extent feasible and in accordance with Section 26 hereof, a
notice of the occurrence of such event, which notice shall describe such event
and the consequences of such event to holders of Rights under Sections 7(e) and
11(a) hereof and (ii) all references in Section 25(a) hereof to Preferred Shares
shall be deemed thereafter to refer also to shares of Common Stock or other
securities issuable in respect of the Rights.
Section 26. Notices. Notices or demands authorized by this Agreement
to be given or made by the Rights Agent or by the holder of any Right
Certificate to or on the
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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:
Young & Rubicam Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
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 any Right
Certificate to or on the Rights Agent shall be sufficiently given or made if
sent by first-class mail, postage prepaid, addressed (until another address is
filed in writing with the Company) as follows:
The Bank of New York
000 Xxxxxxx Xxxxxx, Xxxxx 00X
Xxx Xxxx, Xxx Xxxx 00000
Attention: Stock Transfer Administration
Notices or demands authorized by this Agreement to be given or made
by the Company or the Rights Agent to the holder of any Right Certificate (or,
if prior to the Distribution Date, to the holder of any certificate for shares
of Common Stock) shall be sufficiently given or made if sent by first-class
mail, postage prepaid, addressed to such holder at the address of such holder as
shown on the registry books of the Company.
Section 27. Supplements and Amendments. Prior to the Stock
Acquisition Date, the Company and the Rights Agent shall, if the Company so
directs, supplement or amend this Agreement without the approval of any holders
of Rights Certificates or certificates representing shares of Common Stock. From
and after the Stock Acquisition Date, the Company and the Rights Agent shall, if
the Company so directs, supplement or amend this Agreement without the approval
of any holders of Right Certificates or certificates representing shares of
Common Stock in order (i) to cure any ambiguity, (ii) to correct or supplement
any provision contained herein which may be defective or inconsistent with any
other provisions herein, (iii) to shorten or lengthen any time period hereunder
or (iv) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable and which shall not adversely affect the
interests of the holders of Right Certificates (other than an Acquiring Person
or an Affiliate or Associate thereof); provided, however, that this Agreement
may not be supplemented or amended to lengthen, pursuant to clause (iii) of this
sentence, (A) a time period relating to when the Rights may be redeemed or to
modify the ability (or inability) of the Board of Directors to redeem the
Rights, in either case at such time as the Rights are not then redeemable or (B)
any other time period unless such lengthening is for the purpose of protecting,
enhancing or clarifying the rights of and/or the benefits to the holders of
Rights (other than an Acquiring Person or an Affiliate or Associate of any such
Person). Upon the delivery of a certificate
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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 provided that such
supplement or amendment does not adversely affect the rights or obligations of
the Rights Agent under Section 18 or Section 20 hereof. Prior to the
Distribution Date, the interests of the holders of Rights shall be deemed
coincident with the interests of the holders of shares of Common Stock.
Section 28. Successors. All the covenants and provisions of this
Agreement by or for the benefit of the Company or the Rights Agent shall bind
and inure to the benefit of their respective successors and assigns hereunder.
Section 29. Benefits of this Agreement. Nothing in this Agreement
shall be construed to give to any Person other than the Company, the Rights
Agent and the registered holders of the Right Certificates (and, prior to the
Distribution Date, of the shares of Common Stock of the Company) any legal or
equitable right, remedy or claim under this Agreement; but this Agreement shall
be for the sole and exclusive benefit of the Company, the Rights Agent and the
registered holders of the Right Certificates (and, prior to the Distribution
Date, of the shares of Common Stock of the Company).
Section 30. Severability. If any term, provision, covenant or
restriction of this Agreement or the Rights is held by a court of competent
jurisdiction or other authority to be invalid, void or unenforceable, the
remainder of this Agreement and the Rights shall remain in full force and effect
and shall in no way be affected, impaired or invalidated; provided, however,
that notwithstanding any other provision of this Agreement to the contrary, if
any such term, provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of Directors
determines in its good faith judgment that severing the invalid language from
this Agreement would adversely affect the purpose or effect of this Agreement,
the right of redemption set forth in Section 23 hereof shall be reinstated and
shall not expire until the close of business on the tenth (10th) Business Day
following the date of such determination by the Board of Directors.
Section 31. Determination and Actions by the Board of Directors,
etc. The Board of Directors 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, without limitation, a
determination to redeem or not to redeem the Rights pursuant to Section 23
hereof or to supplement or amend the Agreement and whether any proposed
supplement or amendment adversely affects the interests of the holders of Right
Certificates and comports with the requirements of Section 27 hereof, or to
approve any tender offer or exchange offer for
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purposes of the definition of "Approved Offer," or to determine whether any
acquisition of beneficial ownership of shares of Common Stock is inadvertent
within the meaning of the definition of "Acquiring Person," or to find or to
announce publicly that any Person has become an Acquiring Person). All such
actions, calculations, interpretations and determinations (including for purpose
of clause (y) below, all omissions with respect to the foregoing) which are done
or made by the Board of Directors in good faith, shall (x) be final, conclusive
and binding on the Company, the Rights Agent, the holders of the Right
Certificates and all other parties, and (y) not subject the Board of Directors
or any director to any liability to the holders of the Right Certificates.
Section 32. Governing Law. This Agreement and each Right Certificate
issued hereunder shall be deemed to be a contract made under the laws of the
State of Delaware and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts to be made and
performed entirely within such State, provided, however, that the rights and
obligations of the Rights Agent shall be governed by and construed in accordance
with the laws of the State of New York.
Section 33. Counterparts. This Agreement may be executed in any
number of counterparts and each of such counterparts shall for all purposes be
deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 34. Descriptive Headings. Descriptive headings of the
several Sections of this Agreement are inserted for convenience only and shall
not control or affect the meaning or construction of any of the provisions
hereof.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, all as of the date and the year first above written.
Young & Rubicam Inc.
By
-----------------------------
Name:
Title:
The Bank of New York, as Rights Agent
By
-----------------------------
Name:
Title:
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Exhibit A
FORM
of
CERTIFICATE OF DESIGNATIONS
of
CUMULATIVE PARTICIPATING JUNIOR PREFERRED STOCK
of
YOUNG & RUBICAM INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
--------------------
Young & Rubicam Inc., a corporation organized and existing under the
Delaware General Corporation Law (hereinafter called the "Corporation"), hereby
certifies that the following resolution was duly adopted by the Board of
Directors of the Corporation as required by Section 151 of the Delaware General
Corporation Law at a meeting duly called and held on [__________], 1998:
RESOLVED, that pursuant to the authority vested in the Board of
Directors of this Corporation (hereinafter called the "Board of Directors" or
the "Board") in accordance with the provisions of the Amended and Restated
Certificate of Incorporation of the Corporation, the Board of Directors hereby
creates a series of Preference Stock, no par value, of the Corporation and
hereby states the designation and number of shares, and fixes the relative
rights, preferences, and limitations thereof as follows:
Cumulative Participating Junior Preferred Stock
Section 1. Designation and Amount. The shares of such series shall
be designated as "Cumulative Participating Junior Preferred Stock" (the "Junior
Preferred Stock") and the number of shares initially constituting the Junior
Preferred Stock shall be 2,500,000. Such number of shares may be increased or
decreased by resolution of the Board of Directors; provided, that no such
decrease shall reduce the number of authorized shares of
47
Junior Preferred Stock to a number less than the number of shares of Junior
Preferred Stock then outstanding plus the number of shares of Junior Preferred
Stock then reserved for issuance upon the exercise of any outstanding options,
rights or warrants or upon the exercise of any conversion or exchange privilege
contained in any outstanding securities issued by the Corporation. The
Corporation's stated capital with respect to each issued and outstanding share
of Junior Preferred Stock shall be $1.00.
Section 2. Dividends and Distributions.
(A) Subject to the rights of the holders of any shares of any series
of Preference stock ranking senior to the Junior Preferred stock with respect to
dividends, including the Corporation's Money Market Preferred Stock, the holders
of shares of Junior Preferred Stock, in preference to the holders of shares of
Common Stock, par value $0.01 per share (the "Common Stock"), of the
Corporation, and in preference to the holders of shares of any other class of
capital stock of the Corporation ranking junior to the Junior Preferred Stock
with respect to dividends, shall be entitled to receive, when, as and if
declared by the Board of Directors out of funds legally available for the
purpose, quarterly dividends payable in cash on the first days of January,
April, July and October in each year (each such date being referred to herein as
a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend
Payment Date after the first issuance of a share or fraction of a share of
Junior Preferred Stock, in an amount per share (rounded to the nearest cent)
equal to the greater of (a) $1.00 and (b) subject to the provision for
adjustment hereinafter set forth, one hundred (100) times the aggregate per
share amount of all cash dividends, and one hundred (100) times the aggregate
per share amount (payable in kind) of all non-cash dividends or other
distributions, other than a dividend payable in shares of Common Stock or a
subdivision of the outstanding shares of Common Stock (by reclassification or
otherwise), declared on the Common Stock since the immediately preceding
Quarterly Dividend Payment Date or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share or fraction of a share of
Junior Preferred Stock. In the event the Corporation shall at any time declare
or pay any dividend on the Common Stock payable in shares of Common Stock (other
than any and all dividends declared on the outstanding Shares of Common Stock
payable in Common Stock, if the declaration of such dividends occurs prior to
the date on which the Common Stock is registered under the Exchange Act,
regardless of when such dividends are payable or are paid (a "Stock Split")), or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise), then in each such case the
amount to which holders of shares of Junior Preferred Stock were entitled
immediately prior to such event under clause (b) of the preceding sentence shall
be adjusted by multiplying such amount by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately after such event
and the denominator of which is
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the number of shares of Common Stock that were outstanding immediately prior to
such event.
(B) The Corporation shall declare, out of funds legally available
therefor, a dividend or distribution on the Junior Preferred Stock as provided
in paragraph (A) of this Section immediately after it declares a dividend or
distribution on the Common Stock (other than a dividend payable in shares of
Common Stock); provided that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period between any Quarterly
Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a
dividend of $1.00 per share on the Junior Preferred Stock shall nevertheless be
payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on outstanding
shares of Junior Preferred Stock from the Quarterly Dividend Payment Date next
preceding the date of issue of such shares, unless the date of issue of such
shares of Junior Preferred Stock is prior to the record date for the first
Quarterly Dividend Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or unless the date of
issue is a Quarterly Dividend Payment Date or is a date after the record date
for the determination of holders of shares of Junior Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly Dividend Payment Date, in
either of which events such dividends shall begin to accrue and be cumulative
from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall
not bear interest. Dividends paid on the shares of Junior Preferred Stock in an
amount less than the total amount of such dividends at the time accrued and
payable on such shares shall be allocated pro rata on a share-by-share basis
among all such shares at the time outstanding. The Board of Directors may fix a
record date for the determination of holders of shares of Junior Preferred Stock
entitled to receive payment of a dividend or distribution declared thereon,
which record date shall be not more than fifty (50) calendar days prior to the
date fixed for the payment thereof.
Section 3. Voting Rights. In addition to any other voting rights
required by applicable law, the holders of shares of Junior Preferred Stock
shall have the following voting rights:
(A) Each share of Junior Preferred Stock shall entitle the holder
thereof to one hundred (100) votes (subject to adjustment as set forth below) on
all matters submitted to a vote of the stockholders of the Corporation
(including, without limitation, the election of directors). In the event the
Corporation shall at any time declare any dividend on the Common Stock payable
in shares of Common Stock (other than the Stock Split), or effect a subdivision
or combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise), then in each such case the number of votes per
share to which holders of shares of Junior Preferred Stock were entitled
immediately prior to such event shall be adjusted by multiplying such number by
a fraction, the numerator of which is the
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number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in the Amended and Restated
Certificate of Incorporation, in any other Certificate of Designations creating
a series of Preference Stock or any similar stock or by law, the holders of
shares of Junior Preferred Stock, the holders of shares of Common Stock and the
holders of any other capital stock of the Corporation having general voting
rights shall vote together as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) (i) If at any time dividends on any Junior Preferred Stock in an
amount equal to the full accrued dividends for six (6) or more quarterly
dividend periods, whether or not consecutive, shall not have been paid or
declared and a sum sufficient for the payment thereof irrevocably set aside in
trust for the holders of all of such shares, the Board of Directors of the
Corporation shall promptly take all necessary actions to increase the authorized
number of directors of the Corporation by one (1) and the holders of the shares
of the Junior Preferred Stock then outstanding shall be entitled (by series,
voting as a single class) to elect one (1) person as a director to the Board of
Directors of the Corporation (such right to elect one (1) director being
hereinafter sometimes referred to as the "special voting rights"), each
outstanding share having such right being entitled for such purpose to one vote;
provided, however, that at such time as the arrearage in payment of dividends
which gave rise to the exercise of the special voting rights has been cured with
regard to the Junior Preferred Stock by waiver or payment of all accrued
dividends, the right of the holders of such shares so to vote as provided in
this paragraph (C)(i) of this Section 3 shall cease (subject to renewal from
time to time upon the same terms and conditions) and the term of office of the
person who is at that time a director elected by such holders shall terminate
and the number of directors of the Corporation shall be automatically reduced by
one (1).
(ii) At any time after the special voting rights shall have become
vested in the holders of the shares of the Junior Preferred Stock as provided in
paragraph (C)(i) of this Section 3, the Secretary of the Corporation, as
promptly as possible but in any event within twenty (20) calendar days after
receipt of the written request of the holders of not less than ten percent (10%)
of the shares of the Junior Preferred Stock then outstanding, addressed to the
Corporation at its principal office, shall call a special meeting of the holders
of the shares of the Junior Preferred Stock for the purpose of electing such
additional director, such meeting to be held at any place as provided by the
By-Laws of the Corporation for meetings of the Corporation's stockholders, and
upon not less than ten (10) nor more than sixty (60) calendar days' notice. If
such meeting shall not be so called within sixty (60) calendar days after
receipt of the request by the Secretary of the Corporation, then the holders of
not less than ten percent (10%) of the shares of the Junior Preferred Stock then
outstanding may, by
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written notice to the Secretary of the Corporation, designate any person to call
such meeting, and the person so designated may call such meeting, at any such
place as provided above and upon not less than ten (10) nor more than sixty (60)
calendar days' notice and for that purpose shall have access to the stockholder
record books of the Corporation. No such special meeting of the holders of the
shares of the Junior Preferred Stock and no adjournment thereof shall be held on
a date later than thirty (30) calendar days before the annual meeting of
stockholders of the Corporation. At any meeting so called or at any annual
meeting held at any time when the special voting rights are in effect, the
holders of a majority of the shares of the Junior Preferred Stock then
outstanding, present in person or by proxy, shall be sufficient to constitute a
quorum for the election of such additional director, and such additional
director, together with any and all other directors who are then members of the
Board of Directors, shall constitute the duly elected directors of the
Corporation.
(iii) With respect to a vacancy arising in the directorship referred
to in paragraph (C)(i) of this Section 3 at any time when the special voting
rights are in effect pursuant to paragraph (C)(i) of this Section 3, upon the
written request of the holders of not less than ten percent (10%) of the shares
of the Junior Preferred Stock then outstanding, addressed to the Corporation at
its principal office, the Secretary of the Corporation shall give notice of a
special meeting of holders of the shares of the Junior Preferred Stock of the
election of a director to fill such vacancy caused by the death, resignation or
other inability to serve as a director elected by such holders, to be held not
less than ten (10) nor more than twenty (20) calendar days following receipt by
the Secretary of the Corporation of such written request. So long as special
voting rights are in effect pursuant to paragraph (c)(i) of this Section 3, any
director who shall have been so elected by the holders of the Junior Preferred
Stock may be removed at any time, either with or without cause, only by the
affirmative vote of the holders of the shares at the time entitled to cast a
majority of the votes entitled to be cast for the election of such director at a
special meeting of such holders called for that purpose, and any vacancy thereby
created may be filled by the vote of such holders.
(D) Except as set forth herein, or as otherwise provided by the
Amended and Restated Certificate of Incorporation or by law, holders of Junior
Preferred Stock shall have no special voting rights and their consent shall not
be required (except to the extent they are entitled to vote with holders of
Common Stock as set forth herein) for taking any corporate action.
(E) Holders of Junior Preferred Stock shall be entitled to such
notice of each meeting of stockholders as is furnished to the holders of Common
Stock with respect to such meeting.
Section 4. Certain Restrictions.
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(A) Subject to the provisions of the Amended and Restated
Certificate of Incorporation, whenever quarterly dividends or other dividends or
distributions payable on the Junior Preferred Stock as provided in Section 2 are
in arrears as of any Quarterly Dividend Payment Date, thereafter and until all
accrued and unpaid dividends and distributions, whether or not declared, on
shares of Junior Preferred Stock outstanding shall have been paid in full, the
Corporation shall not:
(i) declare or pay dividends, or make any other distributions, on
any shares of stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Preferred Stock;
(ii) declare or pay dividends, or make any other distributions, on
any shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Junior Preferred Stock, except
dividends paid ratably on the Junior Preferred Stock and all such parity stock
on which dividends are payable or in arrears in proportion to the total amounts
to which the holders of all such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for consideration
shares of any stock ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Junior Preferred Stock, provided that the
Corporation may at any time redeem, purchase or otherwise acquire shares of any
such junior stock in exchange for shares of any stock of the Corporation ranking
junior (both as to dividends and upon dissolution, liquidation or winding up) to
the Junior Preferred Stock; or
(iv) purchase or otherwise acquire for consideration any shares of
Junior Preferred Stock, or any shares of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution or winding up) with the Junior
Preferred Stock or redeem any shares of such parity stock, except in accordance
with the terms of the Amended and Restated Certificate of Incorporation and with
a purchase offer made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as the Board of
Directors, after consideration of the respective annual dividend rates and other
relative rights and preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable treatment among the
respective series or classes.
(B) The Corporation shall not permit any subsidiary of the
Corporation to purchase or otherwise acquire for consideration any shares of
stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares. Any shares of Junior Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and cancelled promptly after such purchase or acquisition. All
such shares shall upon
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their cancellation become authorized but unissued shares of Preferred Stock and
may be reissued as part of a new series of Preference Stock to be created by
resolution or resolutions of the Board of Directors, subject to the conditions
and restrictions on issuance set forth herein, in the Amended and Restated
Certificate of Incorporation, or in any other Certificate of Designations
creating a series of Preference Stock or any similar stock or as otherwise
required by law.
Section 6. Liquidation, Dissolution or Winding Up. (A) Upon any
liquidation (voluntary or otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation, dissolution or
winding up) to the Junior Preferred Stock unless, prior thereto, the holders of
shares of Junior Preferred Stock shall have received $1.00 per share, plus an
amount equal to accrued and unpaid dividends and distributions thereon, whether
or not declared, to the date of such payment (the "Junior Preferred Liquidation
Preference"). Following the payment of the full amount of the Junior Preferred
Liquidation Preference, no additional distributions shall be made to the holders
of shares of Junior Preferred Stock unless, prior thereto, the holders of shares
of Common Stock shall have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing (i) the Junior Preferred
Liquidation Preference by (ii) 100 (as appropriately adjusted as set forth in
subparagraph (C) below to reflect such events as stock splits, stock dividends
and recapitalizations with respect to the Common Stock) (such number in clause
(ii) immediately above being referred to as the "Adjustment Number"). Following
the payment of the full amount of the Junior Preferred Liquidation Preference
and the Common Adjustment in respect of all outstanding shares of Junior
Preferred Stock and Common Stock, respectively, holders of Junior Preferred
Stock and holders of shares of Common Stock shall receive their ratable and
proportionate share of the remaining assets to be distributed in the ratio of
the Adjustment Number to one (1) with respect to such Junior Preferred Stock and
Common Stock, on a per share basis, respectively.
(B) In the event, however, that there are not sufficient assets
available to permit payment in full of the Junior Preferred Liquidation
Preference and the liquidation preferences of all other series of preferred
stock, if any, which rank on a parity with the Junior Preferred Stock, then such
remaining assets shall be distributed ratably to the holders of such parity
shares in proportion to their respective liquidation preferences. In the event,
however, that there are not sufficient assets available to permit payment in
full of the Common Adjustment, then such remaining assets shall be distributed
ratably to the holders of Common Stock.
(C) In the event the Corporation shall at any time (i) declare any
dividend on Common Stock payable in shares of Common Stock (other than the Stock
Split), (ii) subdivide the outstanding Common Stock, or (iii) combine the
outstanding Common Stock
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into a smaller number of shares, then in each such case the Adjustment Number in
effect immediately prior to such event shall be adjusted by multiplying such
Adjustment Number by a fraction the numerator of which is the number of shares
of Common Stock outstanding immediately after such event and the denominator of
which is the number of shares of Common Stock that were outstanding immediately
prior to such event.
Section 7. Consolidation, Merger, etc. In case the Corporation shall
enter into any consolidation, merger, combination or other transaction in which
the shares of Common Stock are exchanged for or changed into other stock or
securities, cash and/or any other property, then in any such case each share of
Junior Preferred Stock shall at the same time be similarly exchanged or changed
into an amount per share, subject to the provision for adjustment hereinafter
set forth, equal to one hundred (100) times the aggregate amount of stock,
securities, cash and/or any other property (payable in kind), as the case may
be, into which or for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare any dividend on the
Common Stock payable in shares of Common Stock (other than the Stock Split), or
effect a subdivision or combination or consolidation of the outstanding shares
of Common Stock (by reclassification or otherwise) into a greater or lesser
number of shares of Common Stock, then in each such case the amount set forth in
the preceding sentence with respect to the exchange or change of shares of
Junior Preferred Stock shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator of which is the
number of shares of Common Stock that were outstanding immediately prior to such
event.
Section 8. Ranking. The Junior Preferred Stock shall rank senior, as
to dividends and upon liquidation, dissolution or winding up, to the Common
Stock, and junior, as to dividends and upon liquidation, dissolution or winding
up, to all other classes and series of capital stock of the Corporation,
including all series of Preference Stock of the Corporation, unless the terms of
any such class or series shall expressly provide otherwise.
Section 9. No Redemption. The shares of Junior Preferred Stock shall
not be redeemable.
Section 10. Fractional Shares. The Junior Preferred Stock may be
issued in fractions of a share which shall entitle the holder, in proportion to
such holder's fractional shares, to exercise voting rights, receive dividends,
participate in distributions and to have the benefit of all other rights of
holders of shares of Junior Preferred Stock.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its [Chief Executive Officer] as of the ___ day of
________, 1998.
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-------------------------------
[Chief Executive Officer]
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Exhibit B
[Form of Right Certificate]
Certificate No. R-_____________ Rights
NOT EXERCISABLE AFTER May 1, 2008 OR EARLIER IF NOTICE OF
REDEMPTION IS GIVEN BY THE COMPANY OR IF EXCHANGED BY THE COMPANY.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY,
AT $0.01 PER RIGHT AND TO EXCHANGE ON THE TERMS SET FORTH IN THE
RIGHTS AGREEMENT. UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY
OWNED BY AN ACQUIRING PERSON OR ANY ASSOCIATES OR AFFILIATES THEREOF
(AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY
SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID.
Right Certificate
YOUNG & RUBICAM INC.
This certifies that , or registered assigns, is the registered owner
of the number of Rights set forth above, each of which entitles the owner
thereof, subject to the terms, provisions and conditions of the Rights Agreement
dated as of April [_], 1998 (the "Rights Agreement") between Young & Rubicam
Inc., a Delaware corporation (the "Company"), and The Bank of New York (the
"Rights Agent"), to purchase from the Company at any time after the Distribution
Date and prior to 5:00 P.M. (New York City time) on the Expiration Date (as such
terms are defined in the Rights Agreement) at the principal stock transfer
office or such other office of the Rights Agent designated for such purpose, or
of its successors as Rights Agent, one one-hundredth of a fully-paid,
nonassessable share of Cumulative Participating Junior Preferred Stock, no par
value (the "Junior Preferred Shares"), of the Company, at a purchase price of
$[____] per one one-hundredth of a Junior Preferred Share (the "Purchase
Price"), upon presentation and surrender of this Right Certificate with the Form
of Election to Purchase Shares and related Certificate duly executed. The number
of Rights evidenced by this Right Certificate (and the number of shares which
may be purchased upon exercise thereof) set forth above, and the Purchase Price
per share set forth above, are the number and Purchase Price as of April [_],
1998.
56
From and after the Stock Acquisition Date (as such term is defined
in the Rights Agreement), if the Rights evidenced by any Right Certificate are
beneficially owned by (i) an Acquiring Person or any Affiliate or Associate
thereof (as such terms are defined in the Rights Agreement), (ii) a transferee
of an Acquiring Person (or of any Affiliate or Associate thereof), (iii) under
certain circumstances specified in the Rights Agreement, a transferee of a
person who, after such transfer, became an Acquiring Person or any Affiliate or
Associate thereof or (iv) a subsequent transferee of any of the foregoing, such
Rights shall become null and void and no holder hereof shall have any rights
whatsoever with respect to such Rights, whether under any provision of the
Rights Agreement or otherwise.
As provided in the Rights Agreement, the Purchase Price and the
number and kind of Junior Preferred Shares or other securities which may be
purchased upon the exercise of the Rights evidenced by this Right Certificate
are subject to modification and adjustment upon the happening of certain events,
and in certain circumstances may be exercised to purchase securities of issuers
other than the Company.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are hereby incorporated herein by reference and made a part hereof and to which
Rights Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities hereunder of the
Rights Agent, the Company and the holders of the Right Certificates, which
limitations of rights include the temporary suspension of the exercisability of
such Rights under the circumstances set forth in the Rights Agreement. Copies of
the Rights Agreement are on file at the above-mentioned office of the Rights
Agent and are available free of charge upon written request from the Company at:
Young & Rubicam Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: General Counsel
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent or such other office
designated by it for such purpose, may be exchanged for another Right
Certificate or Right Certificates of like tenor and date evidencing Rights
entitling the holder to purchase a like aggregate number of one one-hundredths
of a Junior Preferred Share as the Rights evidenced by the Right Certificate or
Right Certificates surrendered shall have entitled such holder to purchase. If
this Right Certificate shall be exercised in part, the holder shall be entitled
to receive, upon surrender hereof, another Right Certificate or Right
certificates for the number of whole Rights not exercised.
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Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate (i) may be redeemed by the Company at its
option at a redemption price of $0.01 per Right (payable in cash, shares of
Common Stock or other consideration), appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring after the date
hereof, at any time prior to the earlier of (x) the Stock Acquisition Date and
(y) the Final Expiration Date, or (ii) exchanged, in whole or in part, for
Common Stock or Common Stock Equivalents.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Right Certificate (and the Rights Agreement itself) may be
amended by action of the Company's Board of Directors without the approval of
the holders of any of the Rights.
No fractional Junior Preferred Shares will be issued upon the
exercise of any Right or Rights evidenced hereby (other than fractions which are
integral multiples of one one-hundredth, which may, at the election of the
Company, be evidenced by depositary receipts), but in lieu thereof a cash
payment will be made, as provided in the Rights Agreement.
No holder of this Right Certificate, as such, shall be entitled to
vote or receive dividends or be deemed for any purpose the holder of Junior
Preferred Shares or of any other securities of the Company which may at any time
be issuable on the exercise hereof, nor shall anything contained in the Rights
Agreement or herein be construed to confer upon the holder hereof, as such, any
of the rights of a stockholder of the Company or any right to vote for the
election of directors or upon any matter submitted to stockholders at any
meeting thereof, or to give or withhold consent to any corporate action, or to
receive notice of meetings or other actions affecting stockholders (except as
provided in the Rights Agreement), or to receive dividends or subscription
rights, or otherwise, until the Right or Rights evidenced by this Right
Certificate shall have been exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
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WITNESS the facsimile signature of the proper officers of the
Company.
Dated as of _____________, 19__
YOUNG & RUBICAM INC.
By
---------------------------------
Name:
Title:
Countersigned:
The Bank of New York, as Rights Agent
By
----------------------------
Authorized Signatory
Date of Countersignature:
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[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such
holder desires to transfer the Right Certificate)
FOR VALUE RECEIVED ________________________ hereby sells, assigns
and transfers unto _______________________________________________
_____________________________________________ (Please print name and address of
transferee) this Right Certificate, together with all right, title and interest
therein, and does hereby irrevocably constitute and appoint
__________________________ Attorney, to transfer the within Right Certificate on
the books of the within-named Company, with full power of substitution.
Dated: _________________, 19__
-----------------------------
Signature
Signature Guaranteed:
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Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) this Right Certificate is |_| is not |_| being sold,
assigned or transferred by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it did |_| did not |_| acquire the Rights evidenced by this Right
Certificate from any Person who is, was or subsequently became an Acquiring
Person or an Affiliate or Associate of an Acquiring Person.
Dated: ________________, 19__ ----------------------------
Signature
Signature Guaranteed:
NOTICE
The signature of the foregoing Assignment and Certificate must
correspond to the name as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
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FORM OF ELECTION TO PURCHASE SHARES
(To be executed if holder desires
to exercise Rights represented by the Right Certificate)
To Young & Rubicam Inc.:
The undersigned hereby irrevocably elects to exercise
_________________ Rights represented by this Right Certificate to purchase the
Junior Preferred Shares issuable upon the exercise of the Rights (or such other
securities of the Company or of any other person which may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of and delivered to:
Please insert Social Security or other identifying number: ____________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance of such Rights shall be
registered in the name of and delivered to:
Please insert Social Security or other identifying number: ____________________
________________________________________________________________________________
(Please print name and address)
________________________________________________________________________________
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Dated: __________________, 19__
------------------------------
Signature
Signature Guaranteed:
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Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate are |_| are
not |_| being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined in the Rights Agreement);
(2) after due inquiry and to the best knowledge of the
undersigned, it did |_| did not |_| acquire the Rights evidenced by this Right
Certificate from any Person who is, was or became an Acquiring Person or an
Affiliate or Associate of an Acquiring Person.
Dated: ___________________, 19__
-----------------------------
Signature
Signature Guaranteed:
NOTICE
The signature to the foregoing Election to Purchase and Certificate
must correspond to the name as written upon the face of this Right Certificate
in every particular, without alteration or enlargement or any change whatsoever.
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