EXHIBIT 4.1
RIGHTS AGREEMENT
between
XXXXXXXXX INTERNATIONAL INC.
and
MELLON INVESTOR SERVICES LLC,
as Rights Agent
Dated: As of January 25, 2004
19
RIGHTS AGREEMENT
Rights Agreement (the "AGREEMENT"), dated as of January 25, 2004
between Xxxxxxxxx International Inc., a Delaware corporation (the "COMPANY"),
and Mellon Investor Services LLC, a New Jersey limited liability company, as
Rights Agent (the "RIGHTS AGENT", which term shall include any successor Rights
Agent hereunder).
WHEREAS, the Corporate Review Committee (the "COMMITTEE") of the Board
of Directors of the Company, having all of the power of the Board of Directors
of the Company (the "BOARD") delegated to it, with certain limited exceptions
not here relevant, by action of the Board at a meeting duly held on January 20,
2004 (the "DELEGATED POWER"), deems it desirable and in the best interests of
the Company and its stockholders that steps be taken to maximize for its
stockholders the long-term value of the Company in the event of a direct or
indirect takeover;
WHEREAS, the Company's controlling stockholder has purported to amend
the By-laws of the Company by action of written consent delivered to the Company
on January 23, 2004;
WHEREAS, the Committee does not accept the validity or legality of such
action and believes in good faith that if it were to accept such action without
challenge irreparable injury would be done to the the interests of the Company
and its stockholders;
WHEREAS, the Committee believes timing of its actions are critical to
protecing the Company and its stockholders and that current action is needed to
prevent further damage to their interests;
WHEREAS, the Committee desires that the Company seek a determination
(preliminary or final) of a court of competant jurisdiction that the Committee
remains, without further Board action, a duly constituted and authorized
standing committee of the Board with full power and authority to act on matters
within the Delegated Power (the date of first publication or public announcement
of any such determination, a "DETERMINATION DATE" provided that the
Determination Date shall not be deemed to have occurred for purposes of payment
of the dividend described in the next paragraph as having occurred earlier than
the Record Date);
WHEREAS, the Committee has authorized and declared a dividend, payable
on the Determination Date, of one preferred share purchase right (a "RIGHT") for
each Common Share (as hereinafter defined) of the Company outstanding at the
close of business on February 5, 2004 (the "RECORD DATE"), each Right
representing the right to purchase, upon the terms and subject to the conditions
set forth herein, one one-thousandth (1/1000) of a share of Series Z Preferred
Stock, par value $0.01 per share, of the Company ("SERIES Z PREFERRED STOCK")
having the rights and preferences set forth in the Certificate of Designations
of Preferred Stock with respect to the Series Z Preferred Stock, a copy of which
is attached hereto as EXHIBIT A. The Committee has further authorized and
directed the issuance upon and after the Determination Date, of one Right with
respect to each Common Share that shall become outstanding (whether originally
issued or delivered from the Company's treasury)
2
after the Record Date and on or prior to the earliest of the Separation Date,
the Redemption Date and the Final Expiration Date (each as hereinafter defined).
Accordingly, in consideration of the premises and the mutual agreements
herein set forth, the parties hereby agree as follows:
SECTION 1. CERTAIN DEFINITIONS. For purposes of this Agreement, the
following terms have the meanings indicated:
(a) "ACQUIRING PERSON" shall mean any Person who,
together with all Affiliates and Associates of such Person, shall hereafter
become the Beneficial Owner of the Specified Percentage, but shall not include
(i) the Company, (ii) any Subsidiary of the Company, (iii) any employee benefit
plan of the Company or any Subsidiary of the Company, or any entity holding
Common Shares for or pursuant to the terms of any such plan or for purposes of
funding or providing Common Shares to any such plan, and (iv) any Exempt
Stockholder (as hereinafter defined). Notwithstanding the foregoing, no Person
shall become an "Acquiring Person" as a result of an acquisition of Common
Shares by the Company, or the conversion of any outstanding Common Shares held
by Persons other than such Person or its Affiliates or Associates, which
acquisition or conversion, by reducing the number of shares outstanding, or the
voting power of certain shares outstanding, increases the number, or the
relative voting power, of shares Beneficially Owned by such Person to the
Specified Percentage; PROVIDED, HOWEVER, that if a Person shall become the
Beneficial Owner of the Specified Percentage by reason of such share purchases
by the Company or such conversion and shall, after such share purchases or
conversion, become the Beneficial Owner of any additional Common Shares of the
Company, then such Person shall be deemed to be an "Acquiring Person" unless
such Person would not be an Acquiring Person by reason of clauses (i) through
(iv) of the immediately preceding sentence. Notwithstanding the foregoing, if
the Board of Directors (or following a Determination Date, the Committee) of the
Company determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing provision, has become
such inadvertently, and such Person divests as promptly as practicable a
sufficient number of Common Shares so that such Person would no longer be an
"Acquiring Person," as defined pursuant to the foregoing provisions, then such
Person shall not be deemed to be an "Acquiring Person" for any purposes of this
Agreement.
(b) "AFFILIATE" and "ASSOCIATE" shall have the
respective meanings ascribed to such terms in Rule 12b-2 of the General Rules
and Regulations (the "RULES") under the Securities Exchange Act of 1934, as
amended (the "EXCHANGE ACT"), as in effect on the Record Date.
(c) A Person shall be deemed the "BENEFICIAL OWNER"
of and shall be deemed to "BENEFICIALLY OWN" any securities:
(i) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, now or hereafter owns or
has the right to acquire (whether such right is exercisable immediately or
only after the passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing) or upon the exercise of
conversion rights, exchange rights, rights (other than the
3
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, securities (or any securities that would otherwise be
deemed beneficially owned through the ownership of such securities)
tendered pursuant to a tender or exchange offer made by or on behalf of
such Person or any of such Person's Affiliates or Associates until such
tendered securities are accepted for purchase or exchange; and PROVIDED
FURTHER, that a Person shall not be deemed to be the Beneficial Owner of,
or to beneficially own, securities that such Person has the right to
acquire (whether such right is exercisable immediately or only after the
passage of time) upon the exercise of (a) employee stock options now or
hereafter (but prior to the Separation Date) issued by the Company, or (b)
conversion rights conferred in any class or series of Preferred Stock of
the Company issued prior to the Separation Date if the resolutions of the
Board providing for the issuance of such class or series of Preferred Stock
shall specifically refer to this Rights Agreement and provide that the
right to acquire securities upon the exercise of conversion rights so
conferred shall not be deemed to constitute beneficial ownership of such
securities;
(ii) that such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right to vote
(except as hereinafter provided) or dispose of, or of which any of them,
directly or indirectly, has "beneficial ownership" (as determined pursuant
to Rule 13d-3 of the Rules, as in effect on the Record Date) (including,
except as hereinafter provided, pursuant to any agreement, arrangement or
understanding, whether or not in writing); PROVIDED, HOWEVER, that a Person
shall not be deemed to be the Beneficial Owner of, or to beneficially own,
any security under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if such agreement,
arrangement or understanding arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to, and in
accordance with, the applicable provisions of the Rules and is not also
then reportable on Schedule 13D under the Exchange Act (or any comparable
or successor report);
(iii) that are beneficially owned, directly or
indirectly, by any other Person (or any Affiliate or Associate thereof)
with which such Person (or any of such Person's Affiliates or Associates)
has any agreement, arrangement or understanding (whether or not in
writing), for the purpose of, or with respect to, acquiring, holding,
voting (except as described in the proviso to subparagraph (ii) of this
paragraph (c)) or disposing of any voting securities of the Company; and
(iv) that are, pursuant to the foregoing
subparagraphs of this paragraph (c), or otherwise, deemed to be owned by a
voting trust, voting agent, recipient of a proxy that is not immediately
revocable (a "NON-REVOCABLE PROXY") or any other Person to whom such Person
(the "GRANTOR PERSON") has contributed, conveyed, delegated, given,
granted, tendered, transferred or otherwise assigned or conferred
(collectively, "GIVEN") some or all of the voting rights attributable to
the Common Shares of which the Grantor Person (alone or in conjunction with
any other Person) is also deemed to be a Beneficial Owner. Solely for
purposes of this Agreement, the Grantor Person shall be deemed to be the
Beneficial Owner of all Common Shares that such voting trust, voting Agent,
proxy holder or other Person
4
has the right, by Non-revocable Proxy, agreement, assignment, tender, grant
or otherwise, to exercise some or all of the voting rights attributable
thereto, whether or not the Grantor Person shall have contributed or given
voting rights that constitute all or less (even substantially less) than
all of the voting rights held by the voting trust, voting Agent, proxy
holder or other Person to whom or to which the Grantor Person has given
some or all of the voting rights attributable to Common Shares otherwise
beneficially owned by the Grantor Person;
PROVIDED, HOWEVER, that nothing in this paragraph (c) shall cause a person
engaged in business as an underwriter of securities to be the "Beneficial Owner"
of or to "beneficially own" any securities acquired through such person's
participation in good faith in a firm commitment underwriting until the
expiration of 40 days after the date of such acquisition; and PROVIDED, FURTHER,
that solely for purposes of determining if a Person is an Acquiring Person a
Person shall be deemed to beneficially own securities owned by each of such
Person's non-controlled Affiliates or Associates only to the extent of such
Person's beneficial ownership of such Affiliate or Associate and, if the
resulting beneficial ownership is less than the Specified Percentage, such
Person's non-controlled Affiliates' or Associates' beneficial ownership in
excess of the Specified Percentage shall not cause such Person to be an
Acquiring Person; PROVIDED, FURTHER, that solely for purposes hereof (and
expressly not for purposes of Section 203 of the Delaware General Corporation
Law) the mere execution and delivery, without purchase of any securities
pursuant thereto, under the PHIL Agreement shall not be considered to cause PHIL
or its Affiliates and Associates to be considered an Acquiring Person.
(d) "BOARD" means the Board of Directors of the
Company.
(e) "BUSINESS DAY" shall mean any day other than a
Saturday, Sunday, or a day on which banking institutions in New York or New
Jersey are authorized or obligated by law or executive order to close.
(f) "CLASS A COMMON SHARES" shall mean shares of
Class A Common Stock, par value $0.01 per share, of the Company.
(g) "CLOSE OF BUSINESS" on any given date shall mean
5:00 P.M., New York time, on such date; PROVIDED, HOWEVER, that if such date is
not a Business Day it shall mean 5:00 P.M., New York time, on the next
succeeding Business Day.
(h) "COMMON SHARES" when used with reference to the
Company shall mean Class A Common Shares and shares of Class B Common Stock, par
value $0.01 per share, of the Company "COMMON SHARES" or "COMMON SHARES," when
used with reference to any Person other than the Company, shall mean the capital
stock of such Person with the greatest voting power or the equity securities or
other equity interest having power to control or direct the management of such
Person.
(i) "CONTROL" shall have the meaning ascribed thereto
in Rule 12(b)(2) promulgated under the Exchange Act (or any successor
provision).
(j) "EXEMPT STOCKHOLDER" shall mean Xxxx Xxxxx of
Crossharbour and any Person that is and remains a controlled Affiliate of Xxxx
Xxxxx of Crossharbour,
5
including as of the date hereof Xxxxxxxxx Inc.; PROVIDED, that each such Person
shall only be deemed to be an Exempt Stockholder for so long as Xxxx Xxxxx
together with all his controlled Affiliates Beneficially Own no more Class B
Common Shares or Class A Common Shares than Xxxx Xxxxx and his Affiliates
beneficially own as of the date hereof, which represent approximately 73% of the
voting power represented by all Common Shares; and PROVIDED, FURTHER that any
equity securities of the Company that may be issued, granted or purchased by
Xxxx Xxxxx following the date of this Agreement pursuant to any employee benefit
plan of the Company or any of its Subsidiaries or otherwise received as
compensation from the Company shall not be counted for purposes of calculating
the percentage Beneficially Owned by Xxxx Xxxxx for purposes of the immediately
preceding proviso..
(k) "PERSON" shall mean any individual, firm,
corporation, partnership, limited liability company or other entity and shall
include any successor (by merger or otherwise) of such entity.
(l) "PHIL" shall mean Press Holdings International
Limited.
(m) "PHIL AGREEMENT" shall mean the Tender and
Shareholder Support And Acquisition Agreement dated January 18, 2004 among PHIL,
the Ravelston Corporation Limited and Xxxx Xxxxx of Crossharbour in the form
attached to the Schedule 13D Amendment No. 15 filed by Xxxx Xxxxx and certain of
his Affiliates with the the U.S. Securities and Exchange Commission in regards
to securities of the Company on or about January 20, 2004.
(n) "SECTION 11(A)(II) EVENT" shall mean an event
described in Section 11(a)(ii).
(o) "SECTION 13(A) EVENT" shall mean any event
described in clause (x) or (y) or (z) of Section 13(a).
(p) "SERIES Z PREFERRED SHARES" shall mean shares of
Series Z Preferred Stock, par value $0.01 a share, of the Company, including any
authorized fraction of a Series Z Preferred Shares, unless the context otherwise
requires.
(q) "SHARES ACQUISITION DATE" shall mean the first
date of public announcement (including, without limitation, a report filed
pursuant to Section 13(d) or 14(d) under the Exchange Act) by the Company or an
Acquiring Person indicating that an Acquiring Person has become such (or, if
earlier, the later of (i) the latest day permitted under Section 13(d) or
Section 14(d) under the Exchange Act for an Acquiring Person to disclose that
such Acquiring Person has become an Acquiring Person and (ii) the Company aware
of such Acquiring Person having become an Acquiring Person).
(r) "SPECIAL COMMITTEE" shall mean the Special
Committee of the Board formed on June 17, 2003.
(s) "SPECIFIED PERCENTAGE" shall mean any Common
Shares representing in the aggregate 20% or more of the voting power represented
by all outstanding Common Shares of the Company.
6
(t) "SUBSIDIARY" shall mean, with reference to any
Person, any corporation or other entity of which a majority of the voting power
of the voting securities or voting interests is owned, directly or indirectly,
by such Person, or otherwise controlled by such Person.
(u) "TRIGGERING EVENT" shall mean any Section
11(a)(ii) Event or Section 13(a) Event.
The following additional terms have the meanings indicated in the
specified Sections of this Agreement set forth below:
(i) "ACT" -- Section 9(c).
(ii) "ADJUSTMENT SHARES" -- Section 11(a)(ii).
(iii) "COMMON SHARE EQUIVALENT" -- Section
11(a)(iii).
(iv) "CURRENT VALUE" -- Section 11(a)(iii).
(v) "EQUIVALENT SHARES" -- Section 11(b).
(vi) "EXCHANGE ACT" -- Section 1(b). (vii) "FINAL
EXPIRATION DATE" -- Section 7(a).
(viii) "GRANTOR PERSON" -- Section 1(c)(iv).
(ix) "NON-REVOCABLE PROXY" -- Section 1(c)(iv)
(x) "PRINCIPAL PARTY" -- Section 13(b).
(xi) "PURCHASE PRICE" -- Sections 4(a), 11(a)(ii)
and 13(a).
(xii) "RECORD DATE" -- Preamble.
(xiii) "REDEMPTION DATE" -- Section 7(a).
(xiv) "REDEMPTION PRICE" -- Section 23(a).
(xv) "RULES" -- Section 1(b).
(xvi) "SEPARATION DATE" -- Section 3(a).
(xvii) "SERIES Z PREFERRED STOCK" -- Preamble.
(xviii) "SPREAD" -- Section 11(a)(iii).
(xix) "SUBSTITUTION PERIOD" -- Section 11(a)(iii).
7
(xx) "SUMMARY OF RIGHTS" -- Section 3(b).
(xxi) "TRADING DAY" -- Section 11(d)(i).
SECTION 2. APPOINTMENT OF RIGHTS AGENT. The Company hereby appoints the
Rights Agent to act as rights 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. The Rights Agent shall have no duty to supervise, and in
no event shall be liable for, the acts or omissions of any such co-Rights Agent.
SECTION 3. ISSUE OF RIGHT CERTIFICATES.
(a) Until the earlier of (i) the close of business on
the tenth Business Day following the Shares Acquisition Date or (ii) the close
of business on the fifteenth Business Day (or such later date as may be
determined by action of the Board (or following a Determination Date, the
Committee) prior to the time as any Person becomes an Acquiring Person) after
the date on which a tender or exchange offer by any Person (other than any
Exempt Stockholder, the Company, any Subsidiary of the Company, any employee
benefit plan of the Company or of any Subsidiary of the Company, or any Person
or entity organized, appointed or established by the Company for or pursuant to
the terms of any such plan) is first commenced within the meaning of Rule
14d-2(a) of the Rules, if upon consummation thereof, such Person would be the
Beneficial Owner of the Specified Percentage (the earlier of (i) and (ii) being
herein referred to as the "SEPARATION DATE"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by the
certificates for Common Shares registered in the names of the holders thereof
(which certificates shall also be deemed to be Right Certificates) and not by
separate Right Certificates;(y) the right to receive Right Certificates will be
transferable only in connection with the transfer of Common Shares and (z) any
conversion of a Common Share into another class of Common Share shall be treated
hereunder as a transfer of such Common Share to the Company and an issuance of a
new Common Share by the Company. As soon as practicable after the Separation
Date, the Company must promptly notify the Rights Agent thereof in writing and
request the transfer agent to provide the Rights Agent with the names and
addresses of all record holders of Common Shares. As soon as practicable after
the Rights Agent receives such written notice and stockholders list, the Company
will prepare and execute, the Rights Agent will countersign, and the Company
will send or cause to be sent (and Rights Agent will, if requested and if
provided with all necessary information, send) by first-class, insured,
postage-prepaid mail, to each record holder of Common Shares as of the close of
business on the Separation Date, at the address of such holder shown on the
records of the Company or the transfer agent or registrar for the Common Shares,
one or more Right Certificates, in substantially the form of EXHIBIT B hereto,
evidencing one Right for each Common Share so held. In the event that an
adjustment in the number of Rights per Common Share has been made pursuant to
Section 11(p) hereof, at the time of distribution of the Right Certificates, the
Company may make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a) hereof) so that Right Certificates representing
only whole numbers of Rights are distributed and cash may be paid in lieu of any
fractional Rights. As of and after the Separation Date, the Rights will be
evidenced solely by such Right Certificates. The Company shall promptly notify
the Rights Agent in writing upon the occurrence of the
8
Separation Date and, if such notification is given orally, the Company shall
confirm same in writing on or prior to the Business Day next following. Until
such notice is received by the Rights Agent, the Rights Agent may presume
conclusively for all purposes that the Separation Date has not occurred.
(b) As soon as practicable following the later of the
Record Date and the Determination Date, the Company will send a copy of a
Summary of Rights to Purchase Series Z Preferred Stock, in substantially the
form attached hereto as EXHIBIT C (the "SUMMARY OF RIGHTS"), by first-class,
postage-prepaid mail, to each record holder of Common Shares as of the close of
business on the Record Date, at the address of such holder shown on the records
of the Company or the transfer agent or registrar for the Common Shares. With
respect to certificates for Common Shares outstanding as of the Record Date,
until the Separation Date, the Rights will be evidenced by such certificates
registered in the names of the holders thereof, together with a copy of the
Summary of Rights attached thereto, and the registered holders of the Common
Shares shall also be the registered holders of the associated Rights. Until the
earliest of the Separation Date, the Redemption Date or the Final Expiration
Date, the surrender for transfer of any certificate for Common Shares
outstanding on the Record Date, with or without a copy of the Summary of Rights
attached thereto, shall also constitute the transfer of the Rights associated
with the Common Shares represented thereby.
(c) Certificates for Common Shares issued after the
Record Date but prior to the earliest of the Separation Date, the Redemption
Date or the Final Expiration Date shall have impressed on, printed on, written
on or otherwise affixed to them the following legend:
THIS CERTIFICATE ALSO EVIDENCES AND ENTITLES THE HOLDER HEREOF
TO CERTAIN RIGHTS AS SET FORTH IN THE RIGHTS AGREEMENT BETWEEN
XXXXXXXXX INTERNATIONAL INC. (THE "CORPORATION") AND THE
RIGHTS AGENT THEREUNDER, AS IT MAY FROM TIME TO TIME BE
AMENDED OR SUPPLEMENTED IN ACCORDANCE WITH ITS TERMS (THE
"RIGHTS AGREEMENT"), THE TERMS OF WHICH ARE HEREBY
INCORPORATED HEREIN BY REFERENCE AND A COPY OF WHICH IS ON
FILE AT THE PRINCIPAL OFFICES OF THE CORPORATION. UNDER
CERTAIN CIRCUMSTANCES, AS SET FORTH IN THE RIGHTS AGREEMENT,
SUCH RIGHTS WILL BE EVIDENCED BY SEPARATE CERTIFICATES AND
WILL NO LONGER BE EVIDENCED BY THIS CERTIFICATE. THE
CORPORATION WILL MAIL TO THE HOLDER OF THIS CERTIFICATE A COPY
OF THE RIGHTS AGREEMENT, AS IN EFFECT ON THE DATE OF MAILING,
WITHOUT CHARGE, PROMPTLY AFTER RECEIPT OF A WRITTEN REQUEST
THEREFOR. UNDER CERTAIN CIRCUMSTANCES SET FORTH IN THE RIGHTS
AGREEMENT, RIGHTS ISSUED TO, OR HELD BY, ANY PERSON WHO IS,
WAS OR BECOMES AN ACQUIRING
9
PERSON OR AN AFFILIATE OR ASSOCIATE THEREOF (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT), WHETHER CURRENTLY HELD BY OR
ON BEHALF OF SUCH PERSON OR BY ANY SUBSEQUENT HOLDER, MAY
BECOME NULL AND VOID.
SECTION 4. FORM OF RIGHT CERTIFICATES.
(a) The Right Certificates (and the forms of election
to purchase Series Z Preferred Shares, exercise notice and of assignment to be
printed on the reverse thereof) shall be substantially the same as 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, which do not affect the rights, duties or responsibilities of the
Rights Agent and as are not inconsistent with the provisions of this Agreement,
or as may be required to comply with any applicable law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed, or to conform to
usage. Subject to the provisions of Section 11 and Section 22 hereof, the Right
Certificates, whenever distributed, shall be dated as of the Record Date and on
their face shall entitle the holders thereof to purchase such number of one
one-thousandth of a share of Series Z Preferred Stock as shall be set forth
therein at the price per one one-thousandth of a Series Z Preferred Share set
forth therein (the "PURCHASE PRICE"), but the amount and type of the securities
purchasable (or other consideration to be made available) upon the exercise of
each Right and the Purchase Price thereof shall be subject to adjustment as
provided herein.
(b) Any Right Certificate issued pursuant to Section
3(a) or Section 22 hereof that represents Rights beneficially owned by (i) an
Acquiring Person or an Associate or Affiliate of an Acquiring Person, (ii) a
transferee of an Acquiring Person (or such Associate or Affiliate) who becomes a
transferee after the Acquiring Person becomes such or (iii) a transferee of an
Acquiring Person (or such Associate or Affiliate) who becomes a transferee prior
to or concurrently with the Acquiring Person becoming such and receives such
Rights pursuant to either (A) a transfer (whether or not for consideration) from
the Acquiring Person to holders of equity interests in such Acquiring Person or
to any Person with whom the Acquiring Person has any continuing agreement,
arrangement or understanding regarding the transferred Rights or (B) a transfer
that the Board (or following a Determination Date, the Committee) has determined
is part of a plan, arrangement or understanding that has as a primary purpose or
effect avoidance of Section 7(e) hereof, and any Right Certificate issued
pursuant to Section 6 or Section 11 hereof upon transfer, exchange, replacement
or adjustment of any other Right Certificate referred to in this sentence, shall
contain (to the extent feasible) the following legend:
THE RIGHTS REPRESENTED BY THIS RIGHT CERTIFICATE ARE OR WERE
BENEFICIALLY OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR
AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHT CERTIFICATE
AND THE RIGHTS REPRESENTED HEREBY
10
MAY BECOME VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.
SECTION 5. COUNTERSIGNATURE AND REGISTRATION.
(a) The Right Certificates shall be executed on
behalf of the Company by its Chairman of the Board or its President, Chief
Executive Officer or any Vice President, either manually or by facsimile
signature, and shall have affixed thereto the Company's seal, attested by the
Secretary, the Treasurer or any Assistant Secretary or Assistant Treasurer of
the Company, or shall bear a facsimile thereof. The Right Certificates shall not
be valid for any purpose unless countersigned by the Rights Agent, whether
manually or by facsimile signature. 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 by the Company with the same force and
effect as though the person who signed 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 Separation Date and receipt by the
Rights Agent of the written notice, list of record holders of Rights and all
other relevant information referred to in Section 3(a), the Rights Agent will
keep or cause to be kept, at its office designated pursuant to Section 26 hereof
or agency designated for such purpose, books for registration and transfer of
the Right Certificates issued or to be issued hereunder. Such books shall show
the names and addresses of the respective holders of the Right Certificates, the
number of Rights evidenced on its face by each of the Right Certificates, the
certificate number of each of the Right Certificates and the date of each of the
Right Certificates.
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 4(b), 7(e)
and 14 hereof, at any time after the close of business on the Separation Date,
and at or prior to the close of business on the earlier of the Redemption Date
or the Final Expiration Date, any Right Certificate or Right Certificates may be
transferred, split up, combined or exchanged for another Right Certificate or
Right Certificates, entitling the registered holder to purchase a like number of
Series Z Preferred Shares (or, following a Section 11(a)(ii) Event or Section
13(a) Event, Common Shares, other securities or property, 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 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
office of the Rights Agent designated for such purpose. The Rights Certificates
are transferable only on the registry books of the Rights Agent. Neither the
Rights Agent nor the Company shall be obligated to take any action whatsoever
with respect to the transfer of any
11
such surrendered Right Certificate until the registered holder shall have
completed and signed the certificate contained in the form of assignment on the
reverse side of such Right Certificate and shall have provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company shall reasonably request.
Thereupon the Rights Agent shall 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 of a sum sufficient to cover any tax
or charge that may be imposed in connection with any transfer, split up,
combination or exchange of Right Certificates. The Rights Agent shall not be
required to process the transaction until it receives evidence in writing that
all taxes and charges have been paid by the Company.
(b) Upon receipt by the Company and the Rights Agent
of evidence reasonably satisfactory to them of the loss, theft, destruction or
mutilation of a Right Certificate, and, in case of loss, theft or destruction,
of indemnity or security satisfactory to them, and, at the Company's request,
reimbursement to the Company and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and cancellation of
the 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 owner 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 Section 7(e) 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
Separation Date upon surrender of the Right Certificate, with the form of
election to purchase on the reverse side thereof duly executed, to the Rights
Agent at the office of the Rights Agent designated for such purpose, together
with payment of the Purchase Price for each one one-thousandth of a Series Z
Preferred Share as to which the Rights are exercised, and an amount equal to any
applicable tax or charge required to be paid by the holder of such Right
Certificate in accordance with Section 9 hereof, in cash, or by certified check
or cashier's check payable to the order of the Company, at or prior to the close
of business on the earliest of (i) February 5, 2014 (the "FINAL EXPIRATION
DATE"), (ii) the date on which the Rights are redeemed as provided in Section 23
hereof (the "REDEMPTION DATE") or (iii) the time at which such Rights are
exchanged as provided in Section 24 hereof.
(b) The Purchase Price for each one one-thousandth of
a Series Z Preferred Share pursuant to the exercise of a Right shall initially
be $50, 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.
(c) Upon receipt of a Right Certificate representing
exercisable Rights, with the form of election to purchase duly executed,
accompanied by payment of the Purchase Price for the Series Z Preferred Shares
(or other shares, securities or property, as the case may be) to be purchased
and an amount equal to any applicable tax or charge required to be paid by the
holder of such Right Certificate in accordance with Section 9 hereof, in cash,
or by certified check or cashier's check payable to the order of the Company,
the Rights Agent shall, subject to Section 20(k) hereof, thereupon promptly (i)
either (A) requisition from any transfer agent of the Series Z Preferred Shares
(or make available, if the Rights Agent is the
12
transfer agent for such shares) certificates for the number of Series Z
Preferred Shares (or fractions thereof) to be purchased (and the Company hereby
irrevocably authorizes its transfer agent to comply with all such requests) or
(B) if the Company shall have elected to deposit the Series Z Preferred Shares
issuable upon exercise of the Rights hereunder with a depositary agent,
requisition from the depositary agent depositary receipts representing such
number of one one-thousandth of a Series Z Preferred Share as are to be
purchased (in which case certificates for the Series Z Preferred Shares
represented by such receipts shall be deposited by the transfer agent with the
depositary agent) and the Company hereby directs the depositary agent to comply
with such request, (ii) if and when necessary to comply with this Agreement,
requisition from the Company the amount of cash to be paid in lieu of issuance
of fractional shares in accordance with Section 14 hereof, (iii) promptly after
receipt of such certificates or depositary receipts, cause the same to be
delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder and (iv) if and when necessary to comply with this Agreement, after
receipt, promptly deliver 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 (including Common Shares) or assets pursuant to Section
11(a) hereof, the Company will make all arrangements necessary so that such
other securities or assets are available for distribution by the Rights Agent,
if and when appropriate.
(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
Section 6 and Section 14 hereof.
(e) Notwithstanding anything in this Agreement to the
contrary, from and after the occurrence of a Triggering Event, any Rights
beneficially owned by (i) an Acquiring Person or an Associate or Affiliate of an
Acquiring Person, (ii) a transferee from an Acquiring Person (or of any such
Associate or Affiliate) who becomes a transferee after the Acquiring Person
becomes such or (iii) a transferee of an Acquiring Person (or such Associate or
Affiliate) who becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either (A) a transfer
(whether or not for consideration) from the Acquiring Person to holders of
equity interests in such Acquiring Person or to any Person with whom the
Acquiring Person has any continuing agreement, arrangement or understanding
regarding the transferred Rights or (B) a transfer that the Board (or following
a Determination Date, the Committee) has determined is part of a plan,
arrangement or understanding that has as a primary purpose or effect the
avoidance of this Section 7(e), shall become null and void without any further
action, and any holder of such Rights shall thereupon have no rights whatsoever
with respect to such Rights, whether under any provision of this Agreement or
otherwise. The Company shall use all reasonable efforts to insure that the
provisions of this Section 7(e) and Section 4(b) hereof are complied with, but
shall have no liability to any holder of Right Certificates or other Person as a
result of its failure to make any determinations with respect to an Acquiring
Person or its Affiliates, Associates or transferees hereunder. The Company shall
give the Rights Agent written notice of the identity of any such Acquiring
Person, Associate or Affiliate, or the nominee of any of the foregoing, and the
Rights Agent may rely on such notice in carrying out its duties under this
Agreement and shall be deemed not to have knowledge of the identity of any such
13
Acquiring Person, Associate or Affiliate, or the nominee of any of the foregoing
unless and until it shall have received such notice.
(f) Notwithstanding anything in this Agreement to the
contrary, neither the Rights Agent nor the Company shall be obligated to
undertake any action with respect to a registered holder upon the occurrence of
any purported exercise as set forth in this Section 7 unless such registered
holder shall have (i) properly completed and signed the certificate contained in
the form of election to purchase set forth on the reverse side of the Right
Certificate surrendered for such exercise and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former Beneficial Owner) or
Affiliates or Associates thereof as the Company or the Rights Agent shall
reasonably request.
SECTION 8. CANCELLATION AND DESTRUCTION OF 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 canceled form,
or, if surrendered to the Rights Agent, shall be canceled by it, and no Right
Certificates 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 canceled Right Certificates to the Company, or shall, at the written request
of the Company, destroy such canceled Right Certificates, and in such case shall
deliver a certificate of destruction thereof to the Company.
SECTION 9. RESERVATION AND AVAILABILITY OF SERIES Z PREFERRED SHARES;
REGISTRATION.
(a) The Company covenants and agrees that it will
cause to be reserved and kept available out of its authorized and unissued
Series Z Preferred Shares the number of Series Z Preferred Shares that will be
sufficient to permit the exercise in full of all outstanding Rights. Prior to
the occurrence of a Triggering Event, the Company shall not be obliged to cause
to be reserved and kept available out of its authorized and unissued Common
Shares or shares of preferred stock (other than Series Z Preferred Shares), any
such Common Shares or any shares of preferred stock (other than the Series Z
Preferred Shares) to permit exercise of outstanding Rights. The Company will
take all such action as may be necessary to ensure that all Series Z Preferred
Shares delivered upon exercise of Rights shall, at the time of delivery of the
certificates for such Series Z Preferred Shares (subject to the payment of
Purchase Price), be duly and validly authorized and issued and fully paid and
nonassessable shares.
(b) If the Series Z Preferred Shares issuable upon
the exercise of Rights are listed on any national securities exchange, the
Company shall use its best efforts to cause, from and after such time as the
Rights become exercisable, all shares reserved for such issuance to be listed on
such exchange upon official notice of issuance upon such exercise.
(c) If then required by applicable law, the Company
shall use its best efforts to (i) file, as soon as practicable following the
earliest date after the occurrence of a Triggering Event as to which the
consideration to be delivered by the Company upon
14
exercise of the Rights has been determined pursuant to this Agreement, or as
soon as is required by law following the Separation Date, as the case may be, a
registration statement under the Securities Act of 1933 (the "ACT"), with
respect to the securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to become effective as
soon as practicable after such filing and (iii) cause such registration
statement to remain effective (with a prospectus at all times meeting the
requirements of the Act) until the earlier of (A) the date as of which the
Rights are no longer exercisable for such securities and (B) the Final
Expiration Date. If then required by applicable law, the Company will also take
such action as may be appropriate under the securities or "blue sky" laws of the
various states. The Company may temporarily suspend, for a period of time not to
exceed 90 days after the date set forth in clause (i) of this Section 9(c), the
exercisability of the Rights in order to prepare and file such registration
statement. Upon any such suspension, the Company shall promptly notify the
Rights Agent thereof and issue a public announcement (provide Rights Agent a
copy of such announcement) stating that the exercisability of the Rights has
been temporarily suspended and, at such time as the suspension is no longer in
effect, shall promptly notify the Rights Agent thereof and issue a further
public announcement (provide Rights Agent a copy of such announcement) thereof.
Notwithstanding any provision of this Agreement to the contrary, the Rights
shall not be exercisable in any jurisdiction unless the requisite qualification
in such jurisdiction shall have been obtained.
(d) The Company covenants and agrees that it will
take all such action as may be necessary to ensure that all Series Z Preferred
Shares 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.
(e) The Company covenants and agrees that it will pay
when due and payable any and all taxes and charges that may be payable in
respect of the issuance or delivery of the Right Certificates or of any Series Z
Preferred Shares (or Common Shares and/or other securities, as the case may be)
upon the exercise of Rights. The Company shall not, however, be required to pay
any tax or charge that may be payable in respect of any transfer or delivery of
Right Certificates to a Person other than, or the issuance or delivery of
certificates for the Series Z Preferred Shares (or Common Shares 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 for Series Z Preferred Shares (or Common
Shares and/or other securities, as the case may be) upon the exercise of any
Rights until any such tax or charge shall have been paid (any such tax or charge
being payable by the holder of such Right Certificate at the time of surrender)
or until it has been established to the Company's or the Rights Agent's
satisfaction that no such tax or charge is due.
SECTION 10. SERIES Z PREFERRED SHARES RECORD DATE. Each Person in whose
name any certificate for Series Z Preferred Shares (or Common Shares 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
Series Z Preferred Shares (or Common Shares and/or other securities, as the case
may be) represented thereby on, and such certificate 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 taxes and charges) was
15
made; PROVIDED, HOWEVER, that if the date of such surrender and payment is a
date upon which the Series Z Preferred Shares (or Common Shares and/or other
securities, as the case may be) transfer books of the Company are closed, such
person shall be deemed to have become the record holder of such shares on, and
such certificate shall be dated, the next succeeding Business Day on which the
Series Z Preferred Shares (or Common Shares and/or other securities, as the case
may be) transfer books of the Company are open. Prior to the exercise of the
Rights evidenced thereby, the holder of a Right Certificate shall not be
entitled (in such holder's capacity as such) 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 any shares, to receive
dividends or other distributions with respect to any shares or to exercise any
preemptive rights with respect to any shares, and shall not be entitled to
receive any notice of any proceedings of the Company, except as provided herein.
SECTION 11. ADJUSTMENT OF PURCHASE PRICE, NUMBER AND KIND OF SHARES OR
NUMBER OF RIGHTS. The Purchase Price, the number and kind of shares covered by
each Right, and the number of Rights outstanding are subject to adjustment from
time to time as provided in this Section 11.
(a) (i) In the event that the Company shall at any
time after the date of this Agreement (A) declare a dividend on the Series Z
Preferred Shares payable in Series Z Preferred Shares, (B) subdivide the
outstanding Series Z Preferred Shares, (C) combine the outstanding Series Z
Preferred Shares into a smaller number of Series Z Preferred Shares or (D) issue
any shares of its capital stock in a reclassification of the Series Z 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) hereof, the
Purchase Price in effect at the time of the record date for such dividend or of
the effective date of such subdivision, combination or reclassification, and the
number and kind of shares of capital stock issuable on such date, shall be
proportionately adjusted so that the holder of any Right exercised after such
time shall be entitled to receive the aggregate number and kind of shares of
capital stock that, if such Right had been exercised immediately prior to such
date and at a time when the Series Z Preferred Shares 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, combination or
reclassification; PROVIDED, HOWEVER, that in no event shall the consideration to
be paid upon the exercise of one Right be less than the aggregate par value of
the shares of capital stock of the Company issuable upon exercise of one Right.
(ii) Subject to Section 24 hereof, in the
event that there is a Shares Acquisition Date and a Separation Date, then proper
provision shall be made so that each holder of a Right, except as provided below
and in Section 7(e) hereof, shall thereafter have a right to receive, upon
exercise thereof at the Purchase Price in effect as of the date of the Section
11(a)(ii) Event, in lieu of Series Z Preferred Shares, and subject to the
provisions of Section 11(a)(iii) below, such number of Class A Common Shares as
shall equal the result obtained by (x) multiplying such Purchase Price by the
number of one one-thousandth of a Series Z Preferred Share for which a Right is
exercisable as of date of the Section 11(a)(ii) Event and (y) dividing that
product (which, following the first occurrence of such event, shall be referred
to as the "PURCHASE PRICE" for all purposes of this Agreement) by 50% of the
current per share market price of the Class A Common Shares (determined pursuant
to
16
Section 11(d) hereof), but not less than the par value thereof, on the date of
the first occurrence of such Section 11(a)(ii) Event (such number of shares, the
"ADJUSTMENT SHARES").
(iii) In the event that (x) the total of the
Common Shares that are issued but not outstanding and authorized but unissued
(excluding Common Shares reserved for issuance pursuant to the specific terms of
any indenture, option plan or other agreement) is not sufficient to permit the
exercise in full of the Rights in accordance with Section 11(a)(ii) hereof or
(y) the total number of Common Shares available for exercise of the Rights in
accordance with Section 11(a)(ii) hereof is sufficient to permit the exercise in
full of the Rights in accordance with Section 11(a)(ii) but the Board (or
following a Determination Date, the Committee) determines that such exercise of
the Rights will not afford adequate protection to the stockholders of the
Company and that stockholders should be given an option to acquire a substitute
for the Adjustment Shares, and subject to such limitations as are necessary to
prevent a default under any agreement for money borrowed to which the Company is
a party and to comply with applicable law, then the Board (or following a
Determination Date, the Committee) shall: (A) determine the excess of (1) the
value, based upon the current per share market price of the Class A Common
Shares (determined pursuant to Section 11(d) hereof), of the Adjustment Shares
issuable upon the exercise of a Right (the "CURRENT VALUE") over (2) the
Purchase Price (such excess, the "SPREAD") and (B) with respect to each Right,
make adequate provision to substitute for, or provide an election to acquire in
lieu of, the Adjustment Shares, upon payment of the applicable Purchase Price
(which term shall include any reduced Purchase Price) any combination of the
following having an aggregate value equal to the Current Value (such aggregate
value to be determined by the Board (or following a Determination Date, the
Committee) based upon the advice of a nationally recognized investment banking
firm selected by the Board (or following a Determination Date, the Committee)):
(1) a reduction in the Purchase Price, (2) Common Shares and/or other equity
securities of the Company (including, without limitation, shares or units of
shares of any series of preferred stock that the Board (or following a
Determination Date, the Committee) has deemed to have the same value as Common
Shares (such shares or units of share of preferred stock hereinafter referred to
as "COMMON SHARE EQUIVALENTS")) and/or (3) debt securities of the Company and/or
cash and other assets; PROVIDED, HOWEVER, that if this Section 11(a)(iii) is
applicable and the Company shall not have made adequate provision to deliver
value pursuant to clause (B) above within 30 days following the first occurrence
of a Triggering Event, then the Company shall be obligated to deliver, upon the
surrender for exercise of a Right and without requiring payment of the Purchase
Price, Common Shares (to the extent available) and then, if necessary, cash,
which securities and/or cash in the aggregate are equal to the Spread. If the
Board (or following a Determination Date, the Committee) shall determine in good
faith that it is likely that sufficient additional Common Shares could be
authorized for issuance upon exercise in full of the Rights, the 30 day period
set forth above may be extended to the extent necessary, but not more than 90
days following the first occurrence of a Triggering Event, in order that the
Company may seek stockholder approval for the authorization of such additional
shares (such period, as it may be extended, the "SUBSTITUTION PERIOD"). If the
Company determines that some action needs to be taken pursuant to the first
and/or second sentences of this Section 11(a)(iii), the Company (x) shall
provide, subject to Section 7(e) hereof, that such action shall apply uniformly
to all outstanding Rights and (y) may suspend the exercisability of the Rights
until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to
17
be made pursuant to such first sentence and to determine the
value thereof. In the event of any such suspension, the Company shall issue a
public announcement (with prompt written notice thereof to the Rights Agent)
stating that the exercisability of the Rights has been temporarily suspended, as
well as a public announcement (with prompt written notice thereof to the Rights
Agent) at such time as the suspension is no longer in effect. For purposes of
this Section 11(a)(iii), the value of the Common Shares shall be the current per
share market price (as determined pursuant to Section 11(d) hereof) of the
Common Shares on the date of the first occurrence of a Triggering Event.
(b) In case the Company shall fix a record date for
the issuance of rights, options or warrants to all holders of Series Z Preferred
Shares entitling them (for a period expiring within 45 calendar days after such
record date) to subscribe for or purchase Series Z Preferred Shares (or shares
having the same rights, privileges and preferences as the Series Z Preferred
Shares ("EQUIVALENT SHARES")) or securities convertible into Series Z Preferred
Shares or equivalent shares at a price per Series Z Preferred Share or
equivalent share (or having a conversion price per share, if a security
convertible into Series Z Preferred Shares or equivalent shares) less than the
then current per share market price of the Series Z Preferred Shares (as defined
in Section 11(d) hereof) on such record date, the Purchase Price to be in effect
after such record date shall be determined by multiplying the Purchase Price in
effect immediately prior to such record date by a fraction, the numerator of
which shall be the number of Series Z Preferred Shares outstanding on such
record date plus the number of Series Z Preferred Shares that the aggregate
offering price of the total number of Series Z Preferred Shares and/or
equivalent shares so to be offered (and/or the aggregate initial conversion
price of the convertible securities so to be offered) would purchase at such
current market price and the denominator of which shall be the number of Series
Z Preferred Shares outstanding on such record date plus the number of additional
Series Z Preferred Shares and/or equivalent 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
(or following a Determination Date, the Committee), whose determination shall be
described in a statement filed with the Rights Agent and shall be binding on the
holders of the Rights. Series Z Preferred Shares owned by or held for the
account of the Company shall not be deemed outstanding for the purpose of any
such computation. Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such rights or warrants are not so
issued, the Purchase Price shall be adjusted to be the Purchase Price that 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 distribution to all holders of the Series Z 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 any debt securities, cash
or assets (other than a regular quarterly cash dividend or a dividend payable in
Series Z 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 then current per share market price of the Series Z Preferred
Shares (as defined in Section 11(d) hereof) on such record date, less the fair
market value (as determined in good faith by the
18
Board (or following a Determination Date, the Committee), whose determination
shall be described in a statement filed with the Rights Agent and binding on the
holders of Rights) of the portion of the assets or debt securities so to be
distributed or of such subscription rights or warrants applicable to one Series
Z Preferred Share and the denominator of which shall be such current per share
market price of the Series Z Preferred Shares (as determined pursuant to Section
11(d) hereof). 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 that would
then be in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation
hereunder, the "current per share market price" of the Common Shares on any date
shall be deemed to be the lesser of (x) the average of the daily closing prices
per Common Share for the 30 consecutive Trading Days immediately prior to such
date or (y) the average of the daily closing prices per Common Share for the 30
consecutive Trading Days immediately following such date; PROVIDED, HOWEVER,
that in the event that the current per share market price of the Common Shares
is determined during a period following the announcement by the issuer of such
Common Shares of a dividend or distribution on such Common Shares payable in
such Common Shares or securities convertible into such Common Shares (other than
the Rights), or any subdivision, combination or reclassification of such Common
Shares, and prior to the expiration of 20 Trading Days after the ex-dividend
date for such dividend or distribution, then, and in each such case, the current
market price shall be appropriately adjusted to reflect the current market price
per Common Share equivalent. 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 on the principal national securities exchange, if any, on
which the Common Shares are then listed or admitted to trading or, if the Common
Shares are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use, or, if on any such date the Common Shares are
not quoted by any such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a market in the Common
Shares selected in good faith by the Board (or following a Determination Date,
the Committee). The term "TRADING DAY" shall mean a day on which the principal
national securities exchange or NASDAQ on which the Common Shares are listed or
traded or are admitted to trading is open for the transaction of business or, if
the Common Shares are not listed or admitted to trading on any national
securities exchange or NASDAQ, a Business Day.
(ii) For the purpose of any computation
hereunder, the "current per share market price" of the Series Z Preferred Shares
shall be determined in the same manner as set forth above for Common Shares in
clause (i) of this Section 11(d). If the current per share market price of the
Series Z Preferred Shares cannot be determined in the manner provided above, the
"current per share market price" of the Series Z Preferred Shares shall be
conclusively deemed to be the current per share market price of the Common
Shares (appropriately adjusted to reflect any stock split, stock dividend or
similar transaction occurring after the date hereof), multiplied by 1,000. If
neither the Common Shares nor the Series Z Preferred Shares are publicly held or
so listed or traded, "current per share market
19
price" shall mean the fair value per share as determined in good faith by the
Board (or following a Determination Date, the Committee), whose determination
shall be described in a statement filed with the Rights Agent and binding on the
holders of Rights.
(e) No adjustment in the Purchase Price shall be
required unless such adjustment would require an increase or decrease of at
least 1% in the Purchase Price; PROVIDED, HOWEVER, that any adjustments that 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 the nearest one
one-hundredth of a Common Share or other share or one one-ten thousandth of a
Series Z Preferred Share, as the case may be. Notwithstanding the first sentence
of this Section 11(e), any adjustment provided for in this Section 11 shall be
made no later than the earlier of (i) three years from the date of the
transaction that requires such adjustment or (ii) the Final Expiration Date.
(f) If as a result of an adjustment made pursuant to
Section 11(a) or Section 13(a) hereof, the holder of any Right thereafter
exercised shall become entitled to receive any property, other securities (other
than shares of capital stock of the Company) or shares of capital stock of the
Company other than Series Z Preferred Shares, thereafter the amount of such
property, other securities (other than shares of capital stock of the Company)
and the number of such other shares of capital stock so receivable upon exercise
of any Right (as well as any consideration to be paid therefor) 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 Series Z Preferred Shares (and
the Purchase Price) contained in this Section 11, and the provisions of Sections
7, 9, 10 and 13 with respect to the Series Z Preferred Shares shall apply on
like terms to any such property, other securities and other shares of capital
stock.
(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 Series Z
Preferred Shares purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Company shall have exercised its
election as provided in Section 11(i) hereof, upon each adjustment of the
Purchase Price as a result of the calculations made in Sections 11(b) and (c)
hereof, each Right outstanding immediately prior to the making of such
adjustment shall thereafter evidence the right to purchase, at the adjusted
Purchase Price, that number of one one-thousandth of a Series Z Preferred Share
(calculated to the nearest one one-ten thousandth of a Series Z Preferred Share)
obtained by (i) multiplying (x) the number of one one-thousandth of a share
covered by a Right immediately prior to this adjustment by (y) the Purchase
Price in effect immediately prior to such adjustment of the Purchase Price and
(ii) dividing the product so obtained by the Purchase Price in effect
immediately after such adjustment of the Purchase Price.
(i) The Company may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights, in substitution
for any adjustment in the number of Series Z Preferred Shares purchasable upon
the exercise of a Right. Each of the
20
Rights outstanding after such adjustment of the number of Rights shall be
exercisable for the number of one one-thousandth of a Series Z Preferred Share
for which a Right was exercisable immediately prior to such adjustment. Each
Right held of record prior to such adjustment of the number of Rights shall
become the 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 promptly notify the
Rights Agent in writing and make a public announcement of its election to adjust
the number of Rights and shall provide written notice of such election to the
Rights Agent, 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 10 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
and executed by the Company, and countersigned by the Rights Agent in the manner
provided for herein 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 Series Z Preferred Shares issuable upon the
exercise of the Rights, the Right Certificates theretofore and thereafter issued
may continue to express the Purchase Price per one one-thousandth of a share and
the number of shares that 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 one-thousandth of the then
stated value, if any, of the Series Z Preferred Shares issuable upon exercise of
the Rights, the Company shall take any corporate action that may, in the opinion
of its counsel, be necessary in order that the Company may validly and legally
issue fully paid and nonassessable Series Z Preferred Shares at such adjusted
Purchase Price.
(l) In any case in which this Section 11 requires
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 (with prompt written
notice thereof to the Rights Agent) until the occurrence of such event the
issuing to the holder of any Right exercised after such record date of the
Series Z Preferred Shares and other capital stock or securities of the Company,
if any, issuable upon such exercise over and above the Series Z 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 promptly notify the Rights Agent of
such election and deliver to such holder a due xxxx or
21
other appropriate instrument evidencing such holder's right to receive such
additional shares upon the occurrence of the event requiring such adjustment.
The Company shall provide the Rights Agent with written notice of any adjustment
in the Purchase Price.
(m) Anything in this Section 11 to the contrary
notwithstanding, the Company shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly required by this
Section 11, as and to the extent that in its good faith judgment the Board (or
following a Determination Date, the Committee) shall determine to be advisable
in order that any (i) consolidation or subdivision of the Series Z Preferred
Shares, (ii) issuance wholly for cash of any of the Series Z Preferred Shares at
less than the current market price, (iii) issuance wholly for cash of Series Z
Preferred Shares or securities that by their terms are convertible into or
exchangeable for Series Z Preferred Shares, (iv) dividends on Series Z Preferred
Shares payable in Series Z Preferred Shares or (v) issuance of rights, options
or warrants referred to in this Section 11, hereafter made by the Company to
holders of its Series Z Preferred Shares shall not be taxable to such
stockholders.
(n) The Company covenants and agrees that it shall
not, and shall not permit any Subsidiary, at any time after the Separation Date,
to (i) consolidate with, (ii) merge with or into or (iii) sell or transfer, in
one or more transactions, assets or earning power aggregating 50% or more of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to any other Person, if at the time of or immediately after such consolidation,
merger or sale there are any rights, warrants or other instruments or securities
outstanding or agreements in effect that would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights.
(o) The Company covenants and agrees that, after the
Separation Date, it will not, except as permitted by Section 23, Section 24,
Section 27 or Section 31 hereof, take (or permit any Subsidiary to take) any
action that at the time it is reasonably foreseeable will diminish substantially
or otherwise eliminate the benefits intended to be afforded by the Rights;
PROVIDED, HOWEVER, that the issuance of additional Rights pursuant hereto,
including by action of the Board (or following a Determination Date, the
Committee) under Section 22 hereof, shall not be deemed to violate this Section
11(o).
(p) Anything in this Agreement to the contrary
notwithstanding, in the event that the Company shall at any time after the
Record Date (i) declare a dividend on the outstanding Common Shares payable in
Common Shares, (ii) subdivide the outstanding Common Shares or (iii) combine the
outstanding Common Shares into a smaller number of shares, the number of Rights
associated with each Common Share then outstanding, or issued or delivered
thereafter, shall be proportionately adjusted so that the number of Rights
thereafter associated (whether before or after the Separation Date) with each
Common Share following any such event shall equal the result obtained by
multiplying the number of Rights associated with each Common Share immediately
prior to such event by a fraction the numerator of which shall be the total
number of Common Shares outstanding immediately prior to the occurrence of the
event and the denominator of which shall be the total number of Common Shares
outstanding immediately following the occurrence of such event. For purposes of
this Section 11(p), any Common Shares issued after the Separation Date that were
not issued together with a Right (pursuant to the Preamble hereto or by action
of the Board (or
22
following a Determination Date, the Committee) pursuant to Section 22 hereof)
shall not be counted as outstanding.
SECTION 12. CERTIFICATE OF ADJUSTED PURCHASE PRICE OR NUMBER OF SHARES.
Whenever an adjustment is made or any event affecting the Rights or their
exercisability (including, without limitation, an event which causes Rights to
become null and void) occurs as provided in Sections 11 or 13 hereof, the
Company shall (a) promptly prepare a certificate setting forth such adjustment
or describing such event, and a brief, reasonably detailed statement of the
facts, computations and methodology of accounting for such adjustment, (b)
promptly file with the Rights Agent and with each transfer agent for the Common
Shares or the Series Z Preferred Shares a copy of such certificate and (c) mail
a brief summary thereof to each holder of a Right Certificate (or, if prior to
the Separation Date, to each holder of a certificate representing Common Shares)
in accordance with Section 25 hereof. The Rights Agent shall be fully protected
in relying on any such certificate and on any adjustment or statement therein
contained and shall have no duty or liability with respect to and shall not be
deemed to have knowledge of any such adjustment or any such event unless and
until it shall have received such a certificate.
SECTION 13. CONSOLIDATION, MERGER OR SALE OR TRANSFER OF ASSETS OR
EARNING POWER.
(a) In the event that, following a Shares Acquisition
Date and a Separation Date, directly or indirectly, (x) the Company shall
consolidate with, or merge with and into, any other Person and the Company shall
not be the continuing or surviving corporation of such consolidation or merger,
(y) any Person shall consolidate with, or merge with or into, the Company and
the Company shall be the continuing or surviving corporation of such
consolidation or merger and, in connection with such consolidation or merger,
all or part of the Common Shares shall be changed into or exchanged for stock or
other securities of the Company or of any other Person or cash or any other
property, or (z) the Company shall sell or otherwise transfer (or one or more of
its Subsidiaries shall sell or otherwise transfer), in a single transaction or a
series of related transactions, assets or earning power aggregating 50% or more
of the assets or earning power of the Company and its Subsidiaries (taken as a
whole) to any Person or Persons (other than the Company or any Subsidiary of the
Company), then, and in each such case, 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 Purchase
Price in effect as of the date of the Section 13(a) Event, and in lieu of Series
Z Preferred Shares, such number of validly authorized and issued, fully paid,
nonassessable and freely tradeable Common Shares of the Principal Party, not
subject to any rights of first refusal, redemption or repurchase, as shall be
equal to the result obtained by (1) multiplying such Purchase Price by the
number of one one-thousandth of a Series Z Preferred Share for which a Right is
exercisable as of the date of the Section 13(a) Event and dividing that product
(which, following the Section 13(a) Event, shall thereafter be referred to as
the "PURCHASE PRICE" for all purposes of this Agreement) by (2) 50% of the
current per share market price (determined pursuant to Section 11(d) hereof) per
Common Share (or other securities or property as provided for herein) of such
Principal Party on the date of consummation of such consolidation, merger, sale
or transfer, (ii) such Principal Party shall thereafter be liable for, and shall
assume, by virtue of such consolidation, merger, sale or transfer, all the
obligations and duties of the Company pursuant to this Agreement, (iii) the
23
term "Company" shall thereafter be deemed to refer to such Principal Party, (iv)
such Principal Party shall take such steps (including, but not limited to, the
reservation of a sufficient number of its Common Shares) in connection with the
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its Common Shares thereafter deliverable upon the exercise of
the Rights, and (v) the provisions of Sections 11(a)(ii) and 11(a)(iii) hereof
shall thereafter be of no effect following the occurrence of a Section 13(a)
Event.
(b) "PRINCIPAL PARTY" shall mean:
(i) in the case of any transaction described in
clause (x) or clause (y) of the first sentence of Section 13(a), the Person that
is the issuer of any securities into which Common Shares of the Company are
converted in such merger or consolidation, and if no securities are so issued,
the Person that is the other party to such merger or consolidation; and
(ii) in the case of any transaction described in
clause (z) of the first sentence of Section 13(a), the Person that is the party
receiving the greatest portion of the assets or earning power transferred
pursuant to such transaction or transactions;
PROVIDED, HOWEVER, that in either such case, (1) if the Common Shares of such
Person are not at such time and have not been continuously over the preceding 12
month period registered under Section 12 of the Exchange Act, and such Person is
a direct or indirect Subsidiary of another Person the Common Shares of which are
and have been so registered, "Principal Party" shall refer to such other Person
and (2) in case such Person is a Subsidiary, directly or indirectly, of more
than one Person, the Common Shares of two or more of which are and have been so
registered, "Principal Party" shall refer to whichever of such Persons is the
issuer of the Common Shares having the greatest aggregate market value.
(c) The Company shall not consummate any such
consolidation, merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized Common Shares, which have not been issued or
reserved for issuance, to permit the exercise in full of the Rights in
accordance with this Section 13 and unless prior thereto the Company and such
Principal Party shall have executed and delivered to the Rights Agent a
supplemental agreement providing for the terms set forth in paragraphs (a) and
(b) of this Section 13 and further providing that, as soon as practicable after
the date of any consolidation, merger or sale of assets mentioned in paragraph
(a) of this Section 13, the Principal Party will:
(i) prepare and file a registration statement under
the Act, with respect to the Rights and the securities purchasable upon exercise
of the Rights on an appropriate form, and will use its best efforts to cause
such registration statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all times meeting the
requirements of the Act) until the Final Expiration Date; and
24
(ii) deliver to holders of the Rights historical
financial statements for the Principal Party and each of its Affiliates that
comply in all respects with the requirements for registration on Form 10 under
the Exchange Act. The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or other transfers. In the event
that one of the transactions described in Section 13(a) hereof shall occur at
any time after the occurrence of a transaction described in Section 11(a)(ii)
hereof, the Rights that have not theretofore been exercised shall thereafter
become exercisable in the manner described in Section 13(a).
SECTION 14. FRACTIONAL RIGHTS AND FRACTIONAL SHARES.
(a) The Company shall not be required to issue
fractions of Rights, except prior to the Separation Date as provided in Section
11(p) hereof, or to distribute Right Certificates that 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 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 on the principal national securities
exchange, if any, on which the Rights are then listed or admitted to trading or,
if the Rights are not listed or admitted to trading on any national securities
exchange, the last quoted price or, if not so quoted, the average of the high
bid and low asked prices in the over-the-counter market, as reported by NASDAQ
or such other system then in use or, if on any such date the Rights are not
quoted by any such organization, the average of the closing bid and asked prices
as furnished by a professional market maker making a market in the Rights
selected by the Board (or following a Determination Date, the Committee). If on
any such date the Rights are not publicly held or so listed or traded, the
current market value of a whole Right shall mean the fair value of a whole Right
as determined in good faith by the Board (or following a Determination Date, the
Committee), whose determination shall be described in a statement filed with the
Rights Agent and binding on the holders of Rights.
(b) The Company shall not be required to issue
fractions of Series Z Preferred Shares (other than fractions that are integral
multiples of one one-thousandth of a Series Z Preferred Share) upon exercise of
the Rights or to distribute certificates that evidence fractional Series Z
Preferred Shares (other than fractions that are integral multiples of one
one-thousandth of a Series Z Preferred Share). Fractions of Series Z Preferred
Shares in integral multiples of one one-thousandth of a Series Z 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 Series Z Preferred
Shares. In lieu of fractional Series Z Preferred Shares that are not integral
multiples of one one-thousandth of a Series Z 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
25
cash equal to the same fraction of the current market value of one Series Z
Preferred Share. For purposes of this Section 14(b), the current market value of
a Series Z Preferred Share shall be the closing price of a Series Z Preferred
Share (as determined pursuant to Section 11(d)(ii) hereof) for the Trading Day
immediately prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event,
the Company shall not be required to issue fractions of Common Shares upon
exercise of the Rights or to distribute certificates that evidence fractional
Common Shares. In lieu of fractional Common Shares, 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 Common Share. For purposes of this Section 14(c), the
current market value of one Common Share shall be the closing price of one
Common Share (as determined pursuant to Section 11(d)(i) hereof) for the Trading
Day immediately prior to the date of such exercise.
(d) The holder of a Right, by the acceptance of the
Rights, expressly waives his right to receive any fractional Rights or any
fractional shares upon exercise of a Right, except as otherwise set forth
herein.
(e) The Rights Agent shall have no duty or obligation
with respect to this Section 14 unless and until it has received specific
instructions (and sufficient cash, if required) from the Company with respect to
its duties and obligations under such Sections. Whenever a payment for fractions
of Rights or fractions of Series Z Preferred Shares is to be made by the Rights
Agent, the Company shall (i) promptly prepare and deliver to the Rights Agent a
certificate setting forth in reasonable detail the facts related to such
payments and the prices and/or formulas utilized in calculating such payments,
and (ii) provide sufficient monies to the Rights Agent in the form of fully
collected funds to make such payments. The Rights Agent shall be fully protected
in relying upon such a certificate and shall have no duty with respect to, and
shall not be deemed to have knowledge of any payment for fractions of Rights or
fractions of Series Z Preferred Shares under any Section of this Agreement
relating to the payment of fractions of Rights or fractions of Series Z
Preferred Shares unless and until the Rights Agent shall have received such a
certificate and sufficient monies.
SECTION 15. RIGHTS OF ACTION.
(a) All rights of action in respect of this
Agreement, excepting the rights of action given to the Rights Agent under
Section 18 hereof, are vested in the respective registered holders of the Right
Certificates (and, prior to the Separation Date, the registered holders of any
certificate representing Common Shares); and any registered holder of any Right
Certificate (or, prior to the Separation Date, of any other certificate
representing Common Shares), without the consent of the Rights Agent or of the
holder of any other Right Certificate (or, prior to the Separation Date, of the
Common Shares), may, in his own behalf and for his own benefit, enforce, and may
institute and maintain any suit, action or proceeding against the Company to
enforce, or otherwise act in respect of, his right to exercise the Rights
evidenced by such 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
26
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 Separation Date, the Rights will be
transferable only in connection with the transfer of the Common Shares;
(b) after the Separation Date, the Right Certificates
are transferable (subject to Section 7(e)) only on the registry books of the
Rights Agent if surrendered at the office of the Rights Agent designated for
such purpose, duly endorsed or accompanied by a proper instrument of transfer
and with appropriate forms and certificates fully executed; and
(c) the Company and the Rights Agent may deem and
treat the person in whose name the Right Certificate (or, prior to the
Separation Date, the associated Common Shares 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 Shares certificates 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 affected by any notice to the contrary.
(d) Notwithstanding anything in this Agreement to the
contrary, neither the Company nor the Rights Agent shall have any liability to
any holder of a Right or other Person as a result of its inability to perform
any of its obligations under this Agreement by reason of any preliminary or
permanent injunction or other order, decree or ruling (whether interlocutory or
final) issued by a court of competent jurisdiction or by a governmental,
regulatory or administrative agency or commission, or any statute, rule,
regulation or executive order promulgated or enacted by any governmental
authority prohibiting or otherwise restraining performance of such obligation;
PROVIDED, HOWEVER, that the Company must use its best efforts to have any such
order, decree, judgment or ruling lifted or otherwise overturned as soon as
reasonably practicable.
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 the Series Z Preferred
Shares, or any other securities of the Company, that 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,
including, without limitation, 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 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.
27
(a) The Company agrees to pay to the Rights Agent
reasonable compensation for all services rendered by it hereunder and, from time
to time, on demand of the Rights Agent, its reasonable expenses and counsel fees
and other disbursements incurred in the preparation, delivery, amendment,
administration and execution of this Agreement and the exercise and performance
of its duties hereunder. The Company also agrees to indemnify the Rights Agent
for, and to hold it harmless against, any loss, liability, damage, judgment,
fine, penalty, claim, demand, cost or expense (including, without limitation,
the reasonable fees and expenses of legal counsel), incurred without gross
negligence, bad faith or willful misconduct on the part of the Rights Agent
(which gross negligence, bad faith or willful misconduct must be determined by a
final, non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction), for any action taken, suffered or omitted by the Rights Agent in
connection with the acceptance, administration, exercise and performance of its
duties under this Agreement. The costs and expenses incurred in enforcing this
right of indemnification shall be paid by the Company. The provisions of this
Section 18 and Section 20 below shall survive the termination of this Agreement,
the exercise or expiration of the Rights and the resignation, replacement or
removal of the Rights Agent.
(b) The Rights Agent shall be authorized and
protected and shall incur no liability for, or in respect of any action taken,
suffered or omitted by it in connection with its acceptance and administration
of this Agreement and the exercise and performance of its duties hereunder, in
reliance upon any Rights Certificate or certificate for the Preferred Shares or
Common Shares or for other securities of the Company, instrument of assignment
or transfer, power of attorney, endorsement, affidavit, letter, notice,
direction, consent, certificate, statement, or other paper or document believed
by it to be genuine and to be signed, executed and, where necessary, verified or
acknowledged, by the proper Person or Persons, or otherwise upon the advice of
counsel as set forth in Section 20 hereof.
SECTION 19. MERGER OR CONSOLIDATION OR CHANGE OF NAME OF RIGHTS AGENT.
(a) Any Person into which the Rights Agent or any
successor Rights Agent may be merged or with which it may be consolidated, or
any Person resulting from any merger or consolidation to which the Rights Agent
or any successor Rights Agent shall be a party, or any Person succeeding to the
stockholder services business of the Rights Agent or any successor Rights Agent,
shall be the successor to the Rights Agent under this Agreement without the
execution or filing of any paper or any further act on the part of any of the
parties hereto; PROVIDED, HOWEVER, that such Person would be eligible for
appointment as a successor Rights Agent under the provisions of Section 21
hereof. In case at the time such successor Rights Agent shall succeed to the
agency created by this Agreement, any of the 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
Certificates 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 Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Agreement.
(b) In case at any time the name of the Rights Agent
shall be changed and at such time any of the Right Certificates shall have been
countersigned but not
28
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.SECTION 21. The Rights Agent
undertakes to perform only the duties and obligations expressly imposed by this
Agreement (and no implied duties) upon the following terms and conditions, 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
(who may be legal counsel for the Company or an employee of the Rights Agent),
and the advice or opinion of such counsel shall be full and complete
authorization and protection to the Rights Agent and the Rights Agent shall
incur no liability for or in respect of any action taken, suffered or omitted by
it and in accordance with such advice or opinion.
(b) Whenever in the performance of its duties under
this Agreement the Rights Agent shall deem it necessary or desirable that any
fact or matter (including without limitation, the identity of an Acquiring
Person and the determination of the current per share market price of any
security) be proved or established by the Company prior to taking, suffering or
omitting to take any action hereunder, such fact or matter (unless other
evidence in respect thereof be herein specifically prescribed) may be deemed to
be conclusively proved and established by a certificate signed by any one of the
Chairman of the Board, the Chief Executive Officer, the President, any Vice
President, the Treasurer or the Secretary of the Company and delivered to the
Rights Agent; and such certificate shall be full and complete authorization and
protection to the Rights Agent and the Rights Agent shall incur no liability for
or in respect of any action taken, suffered or omitted by it under the
provisions of this Agreement in reliance upon such certificate.
(c) The Rights Agent shall be liable hereunder to the
Company and any other Person only for its own gross negligence, bad faith or
willful misconduct (which gross negligence, bad faith or willful misconduct must
be determined by a final, non-appealable order, judgment, decree or ruling of a
court of competent jurisdiction). Anything to the contrary notwithstanding, in
no event shall the Rights Agent be liable for special, punitive, indirect,
consequential or incidental loss or damage of any kind whatsoever (including but
not limited to lost profits), even if the Rights Agent has been advised of the
likelihood of such loss or damage. Any liability of the Rights Agent under this
Rights Agreement will be limited to the amount of annual fees paid by the
Company to the Rights Agent.
(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 have any liability for
or be under any responsibility in respect of the validity of this Agreement or
the execution and delivery
29
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 the Rights becoming null and void) or any change or adjustment in the
terms of the Rights (including the manner, method or amount thereof) provided
for in Section 3, 11, 13, 23 or 24, or the ascertaining of the existence of
facts that would require any such change or adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates after receipt of the
certificate described in Section 12 hereof, upon which the Rights Agent may
rely); nor shall it by any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any Series Z Preferred Shares
to be issued pursuant to this Agreement or any Right Certificate or as to
whether any Series Z Preferred Shares will, when issued, be validly authorized
and issued, fully paid and nonassessable.
(f) The Company will perform, execute, acknowledge
and deliver or cause to be performed, executed, acknowledged and delivered all
such further and other acts, instruments and assurances as may reasonably be
required by the Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and
directed to accept instructions with respect to the performance of its duties
hereunder from any one of the Chairman of the Board, the Chief Executive
Officer, the President, any Vice President, the Secretary or the Treasurer of
the Company, and to apply to such officers for advice or instructions in
connection with its duties, and such instructions shall be full authorization
and protection to the Rights Agent and the Rights Agent shall not be liable for
or in respect of any action taken, suffered or omitted by it in accordance with
instructions of any such officer or for any delay in acting while waiting for
those instructions. The Rights Agent shall be fully authorized and protected in
relying upon the most recent instructions received by any such officer. Any
application by the Rights Agent for written instructions from the Company may,
at the option of the Rights Agent, set forth in writing any action proposed to
be taken, suffered or omitted by the Rights Agent under this Rights Agreement
and the date on and/or after which such action shall be taken or suffered or
such omission shall be effective. The Rights Agent shall not be liable for any
action taken or suffered by, or omission of, the Rights Agent in accordance with
a proposal included in any such application on or after the date specified in
such application (which date shall not be less than five Business Days after the
date any officer of the Company actually receives such application, unless any
such officer shall have consented in writing to an earlier date) unless, prior
to taking any such action (or the effective date in the case of an omission),
the Rights Agent shall have received written instructions in response to such
application specifying the action to be taken, suffered or omitted.
(h) If, with respect to any Right Certificate
surrendered to the Rights Agent for exercise or transfer, the certificate
contained in the form of assignment or the form of election to purchase set
forth on the reverse thereof, as the case may be, has either not been completed
or indicates an affirmative response to clause 1 and/or 2 on such certificate
attached to the form of assignment or form of election to purchase, the Rights
Agent shall not take any further action with respect to such requested exercise
or transfer without first consulting with the Company.
30
(i) The Rights Agent and any stockholder, affiliate,
director, officer or employee of the Rights Agent may buy, sell or deal in any
of the Rights or other securities of the Company or become pecuniarily
interested in any transaction in which the Company may be interested, or
contract with or lend money to the Company or otherwise act as fully and freely
as though the Rights Agent were not Rights Agent under this Agreement. Nothing
herein shall preclude the Rights Agent or any such stockholder, affiliate,
director, officer or employee from acting in any other capacity for the Company
or for any other Person.
(j) The Rights Agent may execute and exercise any of
the rights or powers hereby vested in it or perform any duty hereunder either
itself (through its directors, officers and employees) or by or through its
attorneys or agents, and the Rights Agent shall not be answerable or accountable
for any act, default, neglect or misconduct of any such attorneys or agents or
for any loss to the Company or any other Person resulting from any such act,
default, neglect or misconduct, absent gross negligence, bad faith or willful
misconduct in the selection and continued employment thereof (which gross
negligence, bad faith or willful misconduct must be determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction).
(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 it believes that repayment of such funds or adequate
indemnification against such risk or liability is not reasonably assured to it.
SECTION 22. CHANGE OF RIGHTS AGENT. The Rights Agent or any successor
Rights Agent may resign and be discharged from its duties under this Agreement
upon 30 days' notice in writing mailed to the Company and to each transfer agent
of the Common Shares and Series Z Preferred Shares known to the Rights Agent by
registered or certified mail. In such event, the Company shall give written
notice of such resignation to the holders of the Right Certificates by
first-class mail. The Company may remove the Rights Agent or any successor
Rights Agent upon 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 Shares and Series Z Preferred Shares by registered or certified mail, and
to the holders of the Right Certificates by first-class mail. If the Rights
Agent shall resign or be removed or shall otherwise become incapable of acting,
the Company shall appoint a successor to the Rights Agent. If the Company shall
fail to make such appointment within a period of 30 days after giving notice of
such removal or after it has been notified in writing of such resignation or
incapacity by the resigning or incapacitated Rights Agent or by the holder of a
Right Certificate (who shall, with such notice, submit his Right Certificate for
inspection by the Company), then the registered holder of any Right Certificate
may apply to any court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by the Company or by
such a court, shall be (a) a Person organized and doing business under the laws
of the United States or of any state of the United States, in good standing,
that is subject to supervision or examination by federal or state authority, or
(b) an Affiliate of a Person described in clause (a) of this sentence. After
appointment, the successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally named as Rights
Agent without further act or deed; but the predecessor Rights Agent shall
deliver and transfer to the successor Rights Agent any property at the time held
by it hereunder, and execute and deliver any further assurance,
31
conveyance, act or deed necessary for the purpose. Not later than the effective
date of any such appointment the Company shall file notice thereof in writing
with the predecessor Rights Agent and each transfer agent of the Common Shares
and Series Z 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.
SECTION 23. ISSUANCE OF NEW RIGHT CERTIFICATES. 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 (or following a Determination Date, the
Committee) to reflect any adjustment or change in the Purchase Price per share
and the number or kind or class of shares or other securities or property
purchasable under the Right Certificates made in accordance with the provisions
of this Agreement. In addition, the Company may, if deemed necessary or
appropriate by the Board (or following a Determination Date, the Committee),
issue Right Certificates in connection with the issuance or sale of Common
Shares following the Separation Date.
SECTION 24. REDEMPTION; NO RIGHTS UNTIL DETERMINATION DATE.
(a) The Board (or following a Determination Date, the
Committee) may, at its option, at any time prior to the earlier of (A) the
Separation Date or (B) the Final Expiration Date, redeem all but not less than
all of the then outstanding Rights at a redemption price of $0.001 per Right,
appropriately adjusted to reflect any stock split, stock dividend or similar
transaction occurring after the date hereof (such redemption price being
hereinafter referred to as the "REDEMPTION PRICE").
(b) In the case of a redemption permitted under
Section 23(a) hereof, immediately upon the action of the Board (or following a
Determination Date, the Committee) ordering the redemption of the Rights,
evidence of which shall have been filed with the Rights Agent and without any
further action and without any notice, the right to exercise the Rights will
terminate and the only right thereafter of the holders of Rights shall be to
receive the Redemption Price. Within 10 days after the action of the Board (or
following a Determination Date, the Committee) ordering the redemption of the
Rights, the Company shall give notice of such redemption to the holders (with
prompt written notice thereof to the Rights Agent) of the then outstanding
Rights (in case of notice to holders) 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 Separation Date, on the registry books of the Transfer
Agent for the Common Shares; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such redemption. Any
notice that is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice of redemption
shall state the method by which the payment of the Redemption Price will be
made.
(c) For the avoidance of doubt, no Rights shall be
issued or outstanding or deemed issued or
outstanding unless and until a Determination Date occurs.
SECTION 25. EXCHANGE.
32
(a) The Board (or following a Determination Date, the
Committee) may, at its option, at any time after the right of the Company to
redeem the Rights has expired, exchange all or part of the then outstanding and
exercisable Rights (which shall not include Rights that have become null and
void pursuant to the provisions of Section 7(e) hereof) for Common Shares at an
exchange ratio of one Common Share per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
hereof (such exchange ratio being hereinafter referred to as the "EXCHANGE
RATIO"). Notwithstanding the foregoing, the Board (or following a Determination
Date, the Committee) shall not be empowered to effect such exchange at any time
after any Person (other than any Exempt Stockholder, the Company, any Subsidiary
of the Company, any employee benefit plan of the Company or any such Subsidiary,
or Person organized, appointed or established by the Company for or pursuant to
the terms of any such plan), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of Common Shares representing 50% or more
of the combined voting power of all Common Shares then outstanding.
(b) Immediately upon the action of the Board (or
following a Determination Date, the Committee) ordering the exchange of any
Rights pursuant to Section 24(a) hereof and without any further action and
without any notice, the right to exercise such Rights shall terminate and the
only right thereafter of the holders of such Rights shall be to receive that
number of Common Shares equal to the number of such Rights held by such holder
multiplied by the Exchange Ratio. The Company shall promptly give written notice
to the Rights Agent and public notice of any such exchange; PROVIDED, HOWEVER,
that failure to give, or any defect in, such notice shall not affect the
legality or validity of such exchange. The Company promptly shall mail a notice
of any such exchange to the Rights Agent and to all of the holders of such
Rights at their last addresses as they appear upon the registry books of the
Rights Agent. Any notice that 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 Common Shares for Rights
will be effected and, in the event of any partial exchange, the number of Rights
that will be exchanged. Any partial exchange shall be effected pro rata based on
the number of Rights (other than Rights that have become null and void pursuant
to the provisions of Section 7(e) hereof) held by each holder of Rights.
(c) In any exchange pursuant to this Section 24, the
Company, at its option, may substitute Series Z Preferred Shares for Common
Shares at the rate of one one-thousandth of a Series Z Preferred Share for each
Right.
(d) The Company shall not be required to issue
fractions of Common Shares or to distribute certificates that evidence
fractional Series Z Preferred Shares (except as hereinafter provided) or
fractional Common Shares, but if the exchange is for Series Z Preferred Shares,
the Company shall be obligated to issue fractional shares so long as any
fraction of a Series Z Preferred Share so to be issued is at least equal to one
one-thousandth of a Series Z Preferred Share. In lieu of such fractional shares,
the Company shall pay to the registered holders of the Rights Certificates with
regard to which such fractional shares would otherwise be issuable an amount in
cash equal to the same fraction of the current market value of a whole share.
For the purposes of this Section 24(d), (i) the current market value of a whole
Common Share shall be the per share market price determined in accordance
33
with Section 11(d)(i) hereof as of the day immediately following the day of the
public announcement by the Company that an exchange is to be effected pursuant
to this Section 24 and (ii) the current market value of a Series Z Preferred
Share or fraction of a Series Z Preferred Share shall be the current market
value on such day of a Series Z Preferred Share (or fraction of a Series Z
Preferred Share) as determined in accordance with Section 11(d)(ii) hereof.
SECTION 26. NOTICE OF CERTAIN EVENTS.
(a) In case the Company shall propose, at any time
after the Separation Date, (i) to pay any dividend payable in stock of any class
to the holders of Series Z Preferred Shares or to make any other distribution to
the holders of Series Z Preferred Shares (other than a regular quarterly cash
dividend), (ii) to offer to the holders of its Series Z Preferred Shares rights
or warrants to subscribe for or to purchase any additional Series Z Preferred
Shares or shares of stock of any class or any other securities, rights or
options, (iii) to effect any reclassification of Series Z Preferred Shares
(other than a reclassification involving only the subdivision of outstanding
Series Z Preferred Shares), (iv) to effect any consolidation or merger into or
with, or to effect any sale or other transfer (or to permit one or more of its
Subsidiaries to effect any sale or other transfer), in one or more transactions,
of 50% or more of the assets or earning power of the Company and its
Subsidiaries (taken as a whole) to any other Person, or (v) to effect the
liquidation, dissolution or winding up of the Company, then, in each such case,
the Company shall give to the Rights Agent and each holder of a Right
Certificate, to the extent feasible and in accordance with Section 26 hereof, a
notice of such proposed action, which shall specify the record date for the
purposes of such stock dividend, or distribution of rights or warrants, or the
date on which such reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution or winding up is to take place and the date of
participation therein by the holders of the Common Shares and/or Series Z
Preferred Shares, if any such date is to be fixed, and such notice shall be so
given in the case of any action covered by clause (i) or (ii) above at least 20
days prior to the record date for determining holders of the Series Z Preferred
Shares for purposes of such action, and in the case of any such other action, at
least 20 days prior to the date of the taking of such proposed action or the
date of participation therein by the holders of the Common Shares and/or Series
Z Preferred Shares, whichever shall be the earlier.
(b) In case of the occurrence of a Section 11(a)(ii)
Event, then, in any such case, (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 shall specify the event and the consequences of
the event to holders of Rights under Section 11(a)(ii), and (ii) all references
in the preceding paragraph to Series Z Preferred Shares shall be deemed
thereafter to refer to Common Shares and/or, if appropriate, other securities.
(c) The Company shall notify the Rights Agent
promptly upon the occurrence of a Determination
Date.
SECTION 27. 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
34
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:
Xxxxxxxxx International Inc.
000 Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: President
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Agreement to be given or made by the Company or by the holder of any
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:
Mellon Investor Services LLC
00 Xxxxxxxxxx Xxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxxx 00000-0000
Attention: General Counsel
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 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 28. SUPPLEMENTS AND AMENDMENT; SPECIAL COMMITTEE REVIEW.SECTION
29. The Company may from time to time supplement or amend this Agreement without
the approval of any holders of Right Certificates in order to cure any
ambiguity, to correct or supplement any provision contained herein which may be
defective or inconsistent with any other provisions herein, or to make any other
provisions with respect to the Rights which the Company may deem necessary or
desirable, any such supplement or amendment to be evidenced by a writing signed
by the Company and, if such supplement or amendment affects the rights, duties
or obligations of the Rights Agent, the Rights Agent; PROVIDED, HOWEVER, that
(i) the Rights Agent cannot be required to change or amend its duties and
obligations under this Agreement, and (ii) from and after such time as there is
a Shares Acquisition Date and a Separation Date, this Agreement shall not be
amended in any manner which would adversely affect the interests of the holders
of Rights. Any amendment or supplement that affects the rights, duties or
obligations of the Rights Agent shall not be effective unless it is executed by
the Rights Agent. Upon the delivery of a certificate from an appropriate officer
of the Company and, if requested by the Rights Agent, an opinion of counsel,
which states that the proposed supplement or amendment complies with this
Section 27, the Rights Agent shall execute such supplement or amendment. On or
before January 25, 2005, the Special Committee (or any other committee of
independent directors of the Board who were not the subject of the report
delivered by the Special Committee) shall re-evaluate this Agreement to
determine whether the Plan remains in the best interest of the Company's
stockholders. If determined as necessary, such committee may recommend
amendments to the Board (or
35
following a Determination Date, the Committee) to the Agreement or redemption of
the Rights. Notwithstanding anything contained in this Agreement to the
contrary, the Rights Agent may, but shall not be obligated to, enter into any
supplement or amendment that affects the Rights Agent's own rights, duties,
obligations or immunities under this Agreement. Prior to the Distribution Date,
the interests of the holders of Rights shall be deemed coincident with the
interests of the holders of Common Shares.
SECTION 30. 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 31. DETERMINATIONS AND ACTIONS BY THE BOARD.SECTION 32. The
Board (or following a Determination Date, the Committee for so long as it shall
be duly constituted and empowered) shall have the exclusive power and authority
to administer the provisions of this Agreement and to exercise all rights and
powers specifically granted to the Board or the Committee or the Company, or as
may be necessary or advisable in the administration of this Agreement. All such
actions, calculations, interpretations and determinations that are done or made
by the Board (or following a Determination Date, the Committee), in good faith,
shall be final, conclusive and binding on the Company, the Rights Agent, the
holders of the Rights and all other parties and shall not subject the Board (or
following a Determination Date, the Committee) to any liability to the holders
of the Rights. The Rights Agent is entitled always to assume the Company's Board
(or following a Determination Date, the Committee) of Directors and the
Committee acted in good faith and shall be fully protected and incur no
liability in reliance thereon.
SECTION 33. BENEFITS OF THIS AGREEMENT. Nothing in this Agreement shall
be construed to give to any person or corporation other than the Company, the
Rights Agent and the registered holders of the Right Certificates (and, prior to
the Separation Date, the Common Shares) 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 Separation Date, the Common Shares).
SECTION 34. SEVERABILITY. If any term, provision, covenant or
restriction of this Agreement is held by a court of competent jurisdiction or
other authority to be invalid, void or unenforceable, the remainder of the
terms, provisions, covenants and restrictions of this Agreement shall remain in
full force and effect and shall in no way be affected, impaired or invalidated;
PROVIDED, HOWEVER, that notwithstanding anything in this Agreement to the
contrary, if any such term, provision, covenant or restriction is held by such
court or authority to be invalid, void or unenforceable and the Board (or
following a Determination Date, the Committee) 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 day following the date of such determination by
the Board (or following a Determination Date, the Committee).
SECTION 35. 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 New
36
York, and for all purposes shall be governed by and construed in
accordance with the laws of such State applicable to contracts made and to be
performed entirely within such State.
SECTION 36. CONSEQUENTIAL DAMAGES. Neither party to this Agreement
shall be liable to the other party or any other Person for consequential
damages.
SECTION 37. 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 38. DESCRIPTIVE HEADINGS. Descriptive headings of the several
Sections of this Agreement are inserted for convenience of reference only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
[REMAINDER OF PAGE INTENTIONALLY BLANK]
37
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the day and year first above written.
XXXXXXXXX INTERNATIONAL INC.
By: /s/ Xxxxxx X. Paris
----------------------------------------
Name: Xxxxxx X. Paris
Title: Chairman, CEO and President
MELLON INVESTOR SERVICES LLC, as Rights Agent
By: /s/ Xxxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Vice President
38
EXHIBIT A
FORM
OF
CERTIFICATE OF DESIGNATIONS
OF
SERIES Z PREFERRED STOCK
OF
XXXXXXXXX INTERNATIONAL INC.
(Pursuant to Section 151 of the
Delaware General Corporation Law)
_______________________
Xxxxxxxxx International Inc., a corporation organized and existing
under the General Corporation Law of the State of Delaware (hereinafter called
the "CORPORATION"), hereby certifies that the following resolution was adopted
by the Board of Directors or a duly authorized committee of the Board vested
with full power and authority of the Board under Section 141(c)(2) of the
General Corporation Law (the "BOARD" or "BOARD OF DIRECTORS") as required by
Section 151 of the General Corporation Law at a meeting duly called and held on
January 23, 2004 and continued on January 25, 2004:
RESOLVED, that pursuant to the authority granted to and vested in the
Board of Directors and the Committee in accordance with the provisions of the
Restated Certificate of Incorporation of the Corporation, resolutions passed by
the Board of Directors and Delaware law, the Committee hereby creates a series
of Preferred Stock, par value $0.01 per share, of the Corporation, and hereby
states the designation and number of shares, and fixes the relative rights,
preferences, and limitations thereof (in addition to the provisions set forth in
the Restated Certificate of Incorporation which are applicable to the Preferred
Stock of all classes and series) as follows:
SECTION 1. DESIGNATION AND AMOUNT. The shares of such series shall be
designated as "Series Z Preferred Stock" (the "SERIES Z PREFERRED STOCK") and
the number of shares constituting the Series Z Preferred Stock shall be 100,000.
Such number of shares may be increased or decreased by resolution of the Board
of Directors (or following a Determination Date, the Committee); PROVIDED, that
no decrease shall reduce the number of shares of Series Z Preferred Stock to a
number less than the number of shares then outstanding plus the number of shares
reserved for issuance upon the exercise of outstanding options, rights and
warrants and upon the conversion of any outstanding securities issued by the
Corporation convertible into Series Z Preferred Stock.
39
SECTION 2. DIVIDENDS AND DISTRIBUTIONS.
(A) Subject to the rights of the holders of any shares of any
series of Preferred Stock (or any similar stock) ranking prior and superior to
the Series Z Preferred Stock with respect to dividends, the holders of shares of
Series Z Preferred Stock, in preference to the holders of Class A Common Stock,
par value $0.01 per share (the "CLASS A COMMON STOCK"), of the Corporation and
the Class B Common Stock, par value $0.01 per share (the "CLASS B COMMON STOCK")
and together with the Class A Common Stock, the "COMMON STOCK"), and of any
other junior stock, shall be entitled to receive, when, as and if declared by
the Board of Directors (or following a Determination Date, the Committee) out of
funds legally available for the purpose, quarterly dividends payable in cash on
the first day of March, June, September and December in each year (each such
date being referred to herein as a "QUARTERLY DIVIDEND PAYMENT DATE"),
commencing on the first Quarterly Dividend Payment Date after the first issuance
of a share or fraction of a share of Series Z Preferred Stock, in an amount per
share (rounded to the nearest cent), subject to the provisions for adjustment
set forth in Section 8 equal to the greater of (a) $10 or (b) subject to the
provision for adjustment hereinafter set forth, 1000 times the aggregate per
share amount of all cash dividends, and 1000 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 Series Z Preferred Stock.
(B) If a dividend is declared on the Common Stock, the
Corporation shall declare a dividend or distribution on the Series Z 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 $10 per share on the Series Z Preferred Stock shall
nevertheless be declared and shall be payable on such subsequent Quarterly
Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series Z 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 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 Series Z 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 Series Z 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 (or
following a Determination Date, the Committee) may fix a record date for the
determination of holders of shares of Series Z
40
Preferred Stock entitled to receive payment of a dividend or distribution
declared thereon, which record date shall be not more than 60 days prior to the
date fixed for the payment thereof.
SECTION 3. VOTING RIGHTS. The holders of shares of Series Z Preferred
Stock shall have the following voting rights:
(A) Subject to the provision for adjustment hereinafter set
forth, each share of Series Z Preferred Stock shall entitle the holder thereof
to 1000 votes on all matters submitted to a vote of the stockholders of the
Corporation. In the event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common Stock, or effect a
subdivision or combination or consolidation of the outstanding shares of Common
Stock (by reclassification or otherwise than by payment of a dividend in shares
of Common Stock) into a greater or lesser number of shares of Common Stock, then
in each such case the number of votes per share to which holders of shares of
Series Z Preferred Stock were entitled immediately prior to such event shall be
adjusted by multiplying such number by a fraction, the numerator of which is the
number of shares of Common Stock outstanding immediately after such event and
the denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Certificate of Designations creating a series of Preferred Stock or any similar
stock, or by law, the holders of shares of Series Z Preferred Stock and the
holders of shares of Common Stock and 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) Except as set forth herein, or as otherwise provided by
law, holders of Series Z Preferred Stock shall have no special voting rights and
their consent shall not be required (except to the extent they are entitled to
vote with holders of Common Stock as set forth herein) for taking any corporate
action.
SECTION 4. CERTAIN RESTRICTIONS.
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series Z Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and unpaid dividends and
distributions, whether or not declared, on shares of Series Z 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 Series Z 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 Series Z
Preferred Stock, except dividends paid ratably on the Series Z 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;
41
(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 Series Z 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 (either as to dividends or upon dissolution,
liquidation or winding up) to the Series Z Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series Z Preferred Stock, or any shares of stock
ranking on a parity with the Series Z Preferred Stock, except in accordance with
a purchase offer made in writing or by publication (as determined by the Board
of Directors (or following a Determination Date, the Committee)) to all holders
of such shares upon such terms as the Board of Directors (or following a
Determination Date, the Committee), after consideration of the respective annual
dividend rates and other relative rights and preferences of the respective
Series Znd classes, shall determine in good faith will result in fair and
equitable treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire for consideration any shares
of stock of the Corporation unless the Corporation could, under paragraph (A) of
this Section 4, purchase or otherwise acquire such shares at such time and in
such manner.
SECTION 5. REACQUIRED SHARES. Any shares of Series Z Preferred Stock
purchased or otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition thereof. All such
shares shall upon their cancellation become authorized but unissued shares of
Preferred Stock and may be reissued as part of a new series of Preferred Stock
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 Preferred Stock or any similar stock or as
otherwise required by law.
SECTION 6. LIQUIDATION, DISSOLUTION OR WINDING UP. Upon any
liquidation, dissolution or winding up of the Corporation (which shall no
include any transaction covered by Section 7), no distribution shall be made (1)
to the holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series Z Preferred Stock unless,
prior thereto, the holders of shares of Series Z Preferred Stock shall have
received $1000 per share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the date of such payment,
provided that the holders of shares of Series Z Preferred Stock shall be
entitled to receive an aggregate amount per share, subject to the provision for
adjustment set forth in Section 8, equal to 1000 times the aggregate amount to
be distributed per share to holders of shares of Common Stock, or (2) to the
holders of shares of stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series Z Preferred Stock,
except distributions made ratably on the Series Z Preferred Stock and all such
parity stock in proportion to the total amounts to which the holders of all such
shares are entitled upon such liquidation, dissolution or winding up.
42
SECTION 7. CONSOLIDATION, MERGER, ETC. In case the Corporation shall
enter into any consolidation, merger, combination, exchange 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 Series Z Preferred Stock shall at the same time be similarly exchanged
or changed into an amount per share, subject to the provision for adjustment set
forth in Section 8, equal to 1000 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.
SECTION 8. EFFECT OF COMMON STOCK SPLITS, ETC. In the event the
Corporation shall at any time declare or pay any dividend on the Common Stock
payable in shares of Common Stock, or effect a subdivision or combination or
consolidation of the outstanding shares of Common Stock (by reclassification or
otherwise than by payment of a dividend in shares of Common Stock) into a
greater or lesser number of shares of Common Stock, then in each such case the
amount to which holders of shares of Series Z Preferred Stock were entitled
immediately prior to such event under Sections 2, 6 or 7 shall be adjusted by
multiplying each 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 9. NO REDEMPTION. The shares of Series Z Preferred Stock shall
not be redeemable.
SECTION 10. RANK. The Series Z Preferred Stock shall rank junior to all
other series of Preferred Stock of the Corporation as to the payment of
dividends and as to the distribution of assets upon liquidation, dissolution or
winding up, unless the terms of any such series shall provide otherwise, and
shall rank senior to the Common Stock as to such matters.
SECTION 11. AMENDMENT. The Amended and Restated Certificate of
Incorporation of the Corporation shall not be amended in any manner which would
materially alter or change the powers, preferences or special rights of the
Series Z Preferred Stock so as to affect them adversely without the affirmative
vote of the holders of at least two-thirds of the outstanding shares of Series Z
Preferred Stock, voting together as a single class.
IN WITNESS WHEREOF, this Certificate of Designations is executed on
behalf of the Corporation by its [Title] and attested by its Secretary this ____
day of ________ 200_.
XXXXXXXXX INTERNATIONAL INC.
By:
--------------------------
Name:
Title:
43
Attest:
___________________________
Name:
Title: Secretary
44
EXHIBIT B
[FORM OF RIGHT CERTIFICATE]
Certificate No. R- __________ Rights
NOT EXERCISABLE AFTER FEBRUARY 5, 2014 OR EARLIER IF REDEEMED OR EXCHANGED BY
THE COMPANY. THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY,
AT $0.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT.
UNDER CERTAIN CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
(AS SUCH TERM IS DEFINED IN THE RIGHTS AGREEMENT (AS HEREINAFTER DEFINED)) AND
ANY SUBSEQUENT HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS CERTIFICATE ARE OR WERE BENEFICIALLY OWNED BY A PERSON WHO
WAS OR BECAME AN ACQUIRING PERSON OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING
PERSON (AS SUCH TERMS ARE DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS
RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BE OR BECOME VOID IN THE
CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF THE AGREEMENT.]1
RIGHT CERTIFICATE
XXXXXXXXX INTERNATIONAL 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 25, 2004 (the "RIGHTS AGREEMENT"), between XXXXXXXXX
INTERNATIONAL INC., a Delaware corporation (the "COMPANY"), and MELLON INVESTOR
SERVICES LLC, a [Delaware] limited liability company (the "RIGHTS AGENT"), to
purchase from the Company at any time after the Separation Date (as such term is
defined in the Rights Agreement) and prior to the close of business (5:00 PM New
York time) on February 5, 2014, at the office or offices of the Rights Agent
designated for such purpose, or its successors as Rights Agent, one
one-thousandth of a fully paid, nonassessable share of Series Z Preferred Stock,
par value $0.01
--------
1 The portion of the legend in brackets shall be inserted if applicable and
shall replace the preceding sentence.
45
per share ("SERIES Z SHARE") of the Company, at a purchase price
of $50 per one one-thousandth of a share (the "PURCHASE PRICE"), upon
presentation and surrender of this Right Certificate with the Form of Election
to Purchase and related Certificate duly executed. The number of rights
evidenced by this Right Certificate (and the number of shares that 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 February 5, 2003
based on the Series Z Shares as constituted at such date.
Upon the occurrence of a Triggering Event (as such term is defined in
the Rights Agreement), if the Rights evidenced by this Right Certificate are
beneficially owned by (a) an Acquiring Person or an Affiliate or Associate of
any such Acquiring Person (as such terms are defined in the Rights Agreement),
(b) a transferee of any such Acquiring Person, Associate or Affiliate or (c)
under certain circumstances specified in the Rights Agreement, a transferee of a
person or entity who, after such transfer, became an Acquiring Person, such
Rights shall become null and void and no holder hereof shall have any right with
respect to such rights from and after the occurrence of any such Triggering
Event.
As provided in the Rights Agreement, the Purchase Price and the number
and kind of Series Z Shares or other securities or other property that 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.
The Board (or following a Determination Date, the Committee) may, at
its option, at any time after the right of the Company to redeem the Rights has
expired, exchange all or part of the then outstanding and exercisable Rights
(other than those held by the Acquiring Person and Affiliates and Associates of
the Acquiring Person) for Common Shares (as such term is defined in the Rights
Agreement) at an exchange ratio of one Common Share per Right, as adjusted.
Immediately upon the action of the Board (or following a Determination Date, the
Committee) ordering an exchange of the Rights, the Rights affected by such order
will no longer be exercisable and thereafter the only right of the holders of
such Rights will be to receive the Common Shares issuable by the Company in
exchange for such Rights.
This Right Certificate is subject to all of the terms, covenants and
restrictions of the Rights Agreement, which terms, covenants and restrictions
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 for not more than 90 days at the election of the Company and under
certain circumstances specified in such Rights Agreement. Copies of the Rights
Agreement are on file at the office of the Rights Agent and are also available
upon written request to the Company.
This Right Certificate, with or without other Right Certificates, upon
surrender at the office or offices of the Rights Agent designated for such
purpose, may be exchanged for
46
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder to purchase a like aggregate number of
Series Z Shares as the Rights evidenced by the Right Certificate or Right
Certificates surrendered shall have entitled such holder to purchase. If the
Rights evidenced by 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.
Subject to the provisions of the Rights Agreement, the Rights evidenced
by this Certificate may be redeemed at a redemption price of $0.001 per Right at
any time prior to the earlier of (A) the Separation Date (as such term is
defined in the Rights Agreement) or (B) the Final Expiration Date (as such term
is defined in the Rights Agreement). Immediately upon the action of the Board
(or following a Determination Date, the Committee) ordering redemption of the
Rights, the Rights will no longer be exercisable; and, thereafter the only right
of the holders of the Rights evidenced hereby will be to receive the Redemption
Price.
The terms of the Rights evidenced by this Certificate may be
supplemented or amended without the approval of any holder of the Rights (or the
Common Shares) as set forth in the Rights Agreement.
No fractional Series Z Shares will be issued upon the exercise of any
Right or Rights evidenced hereby (other than fractions that are integral
multiples of one one-thousandth of a Series Z Share, 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 Series Z Shares
or of any other securities of the Company that 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, including, without limitation, 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 other
distributions 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.
WITNESS the facsimile signatures of the proper officers of the Company.
Dated: ___________, 20__
XXXXXXXXX INTERNATIONAL INC.
47
By:
------------------------
Name:
Title:
Attest
--------------------
Name:
Title:
(Corporate Seal)
Countersigned
MELLON INVESTOR SERVICES LLC
as Rights Agent
By____________________________
Name:
Title:
48
[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: _______________, 20__
---------------------------_
Signature
Signature Guaranteed:
49
CERTIFICATE
The undersigned hereby certifies by checking the appropriate boxes
that:
(i) this Rights Certificate [ ] is [ ] is not being sold, assigned and
transferred by or on behalf of a Person who is or was an Acquiring Person or an
Affiliate or Associate of any such Acquiring Person (as such terms are defined
in the Rights Agreement);
(ii) 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: _____________, 20__ _________________________
Signature
NOTICE
The signature(s) to the foregoing Assignment and Certificate must
correspond to the name(s) as written upon the face of this Right Certificate in
every particular, without alteration or enlargement or any change whatsoever.
50
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Right Certificate.)
To: XXXXXXXXX INTERNATIONAL INC.
The undersigned hereby irrevocably elects to exercise _________ Rights
represented by this Right Certificate to purchase the Series Z Shares (or
fractions thereof) issuable upon the exercise of such Rights (or such other
securities of the Company or of any other entity that may be issuable upon the
exercise of the Rights) and requests that certificates for such shares be issued
in the name of:
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:
51
Please insert social security
or other identifying number: _______________________________________________
(Please print name and address)
________________________________________________________________________
Dated: __________________, 20__
_________________________
Signature
Signature Guaranteed:
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) to the best knowledge of the undersigned, it [ ] 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: ________________, 20__
_________________________
Signature
52
NOTICE
------
The signature(s) to the foregoing Election to Purchase and
Certificate must correspond to the name(s) as written upon the face of this
Right Certificate in every particular, without alteration or enlargement or any
change whatsoever.
53
EXHIBIT C
XXXXXXXXX INTERNATIONAL INC.
SUMMARY OF RIGHTS TO PURCHASE PREFERRED SHARES
The Corporate Review Committee of the Board of Directors of our
Company, Xxxxxxxxx International Inc., a Delaware corporation, has declared a
dividend of one preferred share purchase right (a "Right") for each share of
common stock of the Company outstanding at the close of business on February 5,
2004 (the "Record Date").. The Rights are subject to the terms of a Rights
Agreement, dated as of January 25, 2004, between our Company and Mellon Investor
Services LLC, as the Rights Agent.
In general terms, the Rights Agreement works by imposing a significant
penalty upon any person or group that acquires 20% or more of the voting power
of our outstanding common stock without the approval of our Board (or following
a Determination Date, the Committee). The Rights Agreement will not interfere
with any merger or other business combination approved by our Board (or
following a Determination Date, the Committee).
For those interested in the specific terms of the Rights Agreement, we
provide the following summary description. Please note, however, that this
description is only a summary, and is not complete, and should be read together
with the entire Rights Agreement, a form of which has been filed with the
Securities and Exchange Commission. A copy of the Rights Agreement is available
free of charge from our Company.
THE RIGHTS. The Committee authorized the issuance of a Right with
respect to each issued and outstanding share of common stock on the Record Date.
The Rights will initially trade with, and will be inseparable from, the common
stock. The Rights are evidenced only by certificates that represent shares of
common stock. New Rights will accompany any new shares of common stock we issue
after the Record Date until the earliest of the Separation Date, the expiration
or the redemption of the Rights, as described below.
EXERCISE PRICE. Each Right will allow its holder to purchase from our
Company one one-thousandth of a share of Series Z Preferred Stock ("Preferred
Share") for $[50], once the Rights become exercisable. This portion of a
Preferred Share will give the stockholder approximately the same dividend,
voting and liquidation rights as would one share of common stock. Prior to
exercise, the Right does not give its holder any dividend, voting, or
liquidation rights.
EXERCISABILITY. Until a "separation date" occurs, the Rights will:
o not be exercisable;
o be evidenced by certificates that represent shares of our
common stock; and
o trade with our common stock.
54
Following a "separation date," the Rights will become exercisable and
we will issue separate certificates representing the Rights, which will trade
separately from the shares of our common stock.
A "separation date" will occur upon the earlier of:
o 10 business days after a public announcement that a person has
become an "acquiring person;" or
o 15 business days (or such later date as our Board (or
following a Determination Date, the Committee) may determine
before any person becomes an "acquiring person") after a
person commences a tender or exchange offer that, if
successful, would result in the person becoming an "acquiring
person."
Under our Rights Agreement, a person becomes an "acquiring person" if
the person, alone or together with a group, acquires beneficial ownership of
common stock having 20% or more of the combined voting power of all of the
outstanding shares of our common stock. However, an "acquiring person" shall not
include us, any of our subsidiaries, any of our employee benefit plans or any
person or entity acting pursuant to such employee benefit plans. In addition, an
"acquiring person" shall not include any Exempt stockholder. An "Exempt
stockholder" means shall mean Lord Xxxxxx Xxxxx and any Person that is a
controlled Affiliate of Xxxx Xxxxx, including as of the date hereof Xxxxxxxxx
Inc., PROVIDED that each such Person shall only be deemed to be an Exempt
Stockholder for so long as Xxxx Xxxxx together with his controlled Affiliates
Beneficially Own no more than the number and type of Common Shares of the
Company owned by them as of January 25, 2004, which represent in the aggregate
approximately 73% of the voting power represented by all Common Shares provided
further that any equity securities of the Company that may be issued, granted or
purchased by Xxxx Xxxxx following the date of this Agreement pursuant to any
employee benefit plan of the Company or any of its subsidiary or otherwise
received as compensation from the Company shall not be counted for purposes of
calculating the percentage Beneficially Owned by Xxxx Xxxxx for purposes of the
immediately preceding proviso. Our Rights Agreement also contains provisions
designed to prevent the inadvertent triggering of the Rights.
TRIGGERING OF RIGHTS.
FLIP IN. If any person becomes an acquiring person and there is a
separation date, each holder of a Right, other than Rights owned by the
acquiring person which will be voided, will have the right to purchase, upon
payment of the exercise price, shares of common stock having twice the market
value of the exercise price of a Right.
FLIP OVER. If, after a person becomes an acquiring person and there is
a separation date, we are acquired in a merger or other business combination
transaction or 50% or more of our consolidated assets or earning power are sold,
each holder of a Right will have the right to purchase, upon payment of the
exercise price, shares of common stock of the acquiring company which at the
time of such transaction will have twice the market value of the exercise price
of a Right.
55
EXCHANGE. Any time after a separation date and before the acquisition
by any person or group (other than a an exempt stockholder) of a majority of the
outstanding common stock, our Board (or following a Determination Date, the
Committee) may exchange the Rights (other than Rights owned by such person or
group which have become void), in whole or in part, at an exchange ratio of one
share of common stock per Right, subject to adjustment.
REDEMPTION. Our Board (or following a Determination Date, the
Committee) may redeem the Rights, in whole, but not in part, at any time before
a separation date. The redemption price shall be $.001 per Right. The right to
exercise any Rights will terminate when they are redeemed. The only right of the
holders of the Rights after redemption will be to receive the redemption price.
AMENDMENTS. At any time before a person becomes an acquiring person and
there is a separation date, our Board (or following a Determination Date, the
Committee) may amend, without the approval of the holders of the Rights, any
provision in the Rights Agreement. After a person becomes an acquiring person
and there is a separation date, our Board (or following a Determination Date,
the Committee) may only amend the provisions of our Rights Agreement in order
to:
o cure any ambiguity; or
o make changes that will not adversely affect the interests of
the holders of Rights.
SUNSET REVIEW. On or before January 25, 2005, the Special Committee (or
another similar independent committee) will re-evaluate the Rights Agreement
and, to the extent they deem necessary, may recommend amendments to the Rights
Agreement re redemption of the Rights.
EXPIRATION. The Rights will expire on February 5, 2014, unless earlier
redeemed or exchanged by us.
TABLE OF CONTENTS
-----------------
SECTION PAGE
Section 1. Certain Definitions........................................................................2
Section 2. Appointment of Rights Agent................................................................7
Section 3. Issue of Right Certificates................................................................7
Section 4. Form of Right Certificates.................................................................9
Section 5. Countersignature and Registration.........................................................10
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates;
Mutilated, Destroyed, Lost or Stolen Right
Certificates...........................................................................10
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights.............................11
Section 8. Cancellation and Destruction of Right Certificates........................................13
Section 9. Reservation and Availability of Series Z Preferred Shares; Registration...................13
Section 10. Series Z Preferred Shares Record Date.....................................................14
Section 11. Adjustment of Purchase Price, Number and Kind of Shares or Number of Rights...............15
Section 12. Certificate of Adjusted Purchase Price or Number of Shares................................22
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power......................22
Section 14. Fractional Rights and Fractional Shares...................................................24
Section 15. Rights of Action..........................................................................25
Section 16. Agreement of Right Holders................................................................26
Section 17. Right Certificate Holder Not Deemed a Stockholder.........................................26
Section 18. Concerning the Rights Agent...............................................................26
Section 19. Merger or Consolidation or Change of Name of Rights Agent.................................27
Section 20. Duties of Rights Agent....................................................................28
Section 21. Change of Rights Agent....................................................................30
-i-
Section 22. Issuance of New Right Certificates........................................................31
Section 23. Redemption................................................................................31
Section 24. Exchange..................................................................................31
Section 25. Notice of Certain Events..................................................................33
Section 26. Notices...................................................................................33
Section 27. Supplements and Amendment; Special Committee Review.......................................34
Section 28. Successors................................................................................35
Section 29. Determinations and Actions by the Board...................................................35
Section 30. Benefits of this Agreement................................................................35
Section 31. Severability..............................................................................35
Section 32. Governing Law.............................................................................35
Section 33. Consequential Damages.....................................................................36
Section 34. Counterparts..............................................................................36
Section 35. Descriptive Headings......................................................................36
Exhibits
A. Certificate of Designations in respect of Series Z Preferred Stock
B. Form of Right Certificate
C. Summary of Rights to Purchase Series Z Preferred Stock
