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EXHIBIT 99.1
RIGHTS AGREEMENT
ATLANTIC COAST AIRLINES HOLDINGS, INC.
and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY
as Rights Agent
RIGHTS AGREEMENT
dated as of
January 27, 1999
TABLE OF CONTENTS
1. Certain Definitions. 1
2. Appointment of Rights Agent. 5
3. Issue of Rights Certificates. 5
4. Form of Rights Certificates. 7
5. Countersignature and Registration. 8
6. Transfer, Split-Up, Combination and Exchange of Rights
Certificates; Mutilated, Destroyed, Lost or Stolen Rights
Certificates. 8
7. Exercise of Rights; Purchase Price; Expiration Date of Rights.
9
8. Cancellation and Destruction of Rights Certificates. 11
9. Reservation and Availability of Capital Stock. 11
10. Preferred Stock Record Date. 13
11. Adjustment of Purchase Price, Number and Kind of Shares or
Number of Rights. 13
12. Certificate of Adjusted Purchase Price or Number of Shares.21
13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power. 21
14. Fractional Rights and Fractional Shares. 24
15. Rights of Action. 25
16. Agreement of Rights Holders. 26
17. Rights Certificate Holder Not Deemed a Stockholder. 26
18. Concerning the Rights Agent. 27
19. Merger or Consolidation or Change of Name of Rights Agent. 27
20. Duties of Rights Agent. 28
21. Change of Rights Agent. 29
22. Issuance of New Rights Certificates. 30
23. Redemption and Termination. 31
24. Exchange. 31
25. Notice of Certain Events. 33
26. Notices. 34
27. Supplements and Amendments. 35
28. Successors. 35
29. Determination and Actions by the Board of Directors, etc. 35
30. Benefits of this Agreement. 36
31. Severability. 36
32. Governing Law. 36
33. Counterparts. 36
34. Descriptive Headings; References. 37
Exhibit A A-1
Exhibit B B-1
Exhibit C C-1
RIGHTS AGREEMENT
THIS RIGHTS AGREEMENT (this "Agreement"), dated as of January 27,
1999, is entered into by and between ATLANTIC COAST AIRLINES
HOLDINGS, INC., a Delaware corporation (the "Corporation"), and
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, a New York
corporation (the "Rights Agent"), with reference to the following
facts:
WHEREAS, on December 16, 1998 (the "Rights Dividend Declaration
Date"), the Board of Directors of the Corporation authorized and
declared a dividend distribution of one Right for each share of
Common Stock (as hereinafter defined) of the Corporation
outstanding at the Close of Business on January 29, 1999 (the
"Record Date"), and has authorized the issuance of one Right (as
such number may hereinafter be adjusted pursuant to the
provisions of Section 11(p)) for each share of Common Stock of
the Corporation issued from the Record Date (whether originally
issued or delivered from the Corporation's treasury) until the
earliest of the Distribution Date or a Section 13 Event or the
Expiration Date (each as hereinafter defined), each Right
initially representing the right to purchase one one-thousandth
of a share of Series B Junior Participating Preferred Stock of
the Corporation having the rights, preferences, privileges and
restrictions set forth in the form of Certificate of Designation
of Rights, Preferences, Privileges and Restrictions attached
hereto as Exhibit A, upon the terms and subject to the conditions
hereinafter set forth (the "Rights");
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
1. Certain Definitions.
For purposes of this Agreement, the following terms have the
meanings indicated:
(a) "Acquiring Person" shall mean any Person who or which,
together with all Affiliates and Associates of such Person,
without the prior approval of the Board of Directors of the
Corporation, shall become, after the date hereof, the Beneficial
Owner of 20% or more of the shares of Common Stock then
outstanding, but shall not include an Exempt Person, or a Person
who or which, together with its Affiliates and Associates, shall
become the Beneficial Owner of 20% or more of the shares of
Common Stock then outstanding solely as a result of a reduction
in the number of shares of Common Stock outstanding due to a
repurchase of Common Stock by the Corporation, unless such Person
shall thereafter purchase or otherwise become the Beneficial
Owner of additional shares of Common Stock representing 1% of the
shares of Common Stock then outstanding. Notwithstanding the
foregoing, if the Board of Directors of the Corporation
determines in good faith that a Person who would otherwise be an
"Acquiring Person," as defined pursuant to the foregoing
provisions of this paragraph (a), has become such inadvertently,
and such Person divests as promptly as practicable a sufficient
number of shares of Common Stock so that such Person would no
longer be an "Acquiring Person," as defined pursuant to the
foregoing provisions of this paragraph (a), then such Person
shall not be deemed to be an "Acquiring Person" for any purposes
of this Agreement.
(b) "Act" shall mean the Securities Act of 1933, as amended.
(c) "Adjustment Shares" shall have the meaning set forth in
Section 11(a)(ii).
(d) "Affiliate" and "Associate" shall have the respective
meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Securities Exchange Act of 1934,
as amended and in effect on the date of this Agreement (the
"Exchange Act").
(e) A Person shall be deemed the "Beneficial Owner" of, and
shall be deemed to "Beneficially Own," any securities:
(i) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to acquire (whether such right is exercisable immediately or only
after the passage of time) pursuant to any agreement, arrangement
or understanding (whether or not in writing) or upon the exercise
of conversion rights, exchange rights, rights, warrants or
options, or otherwise; provided, however, that a Person shall not
be deemed the "Beneficial Owner" of, or to "Beneficially Own,"
(A) securities tendered pursuant to a tender or exchange offer
made by such Person or any of such Person's Affiliates or
Associates until such tendered securities are accepted for
purchase or exchange, or (B) securities issuable upon exercise of
Rights at any time prior to the occurrence of a Triggering Event,
or (C) securities issuable upon exercise of Rights from and after
the occurrence of a Triggering Event which Rights were acquired
by such Person or any of such Person's Affiliates or Associates
prior to the Distribution Date or pursuant to Section 3(a) or
Section 22 (the "Original Rights") or pursuant to Section 11(i)
in connection with an adjustment made with respect to any
Original Rights;
(ii) which such Person or any of such Person's
Affiliates or Associates, directly or indirectly, has the right
to vote or dispose of or has "beneficial ownership" of (as
determined pursuant to Rule 13d-3 of the General Rules and
Regulations under the Exchange Act), including pursuant to any
agreement, arrangement or understanding (whether or not in
writing); provided, however, that a Person shall not be deemed
the "Beneficial Owner" of, or to "Beneficially Own," any security
under this subparagraph (ii) as a result of an agreement,
arrangement or understanding to vote such security if such
agreement arrangement or understanding: (A) arises solely from a
revocable proxy given in response to a public proxy or consent
solicitation made pursuant to, and in accordance with, the
applicable provisions of the General Rules and Regulations under
the Exchange Act, and (B) is not also then reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable
or successor report); or
(iii) which are Beneficially Owned, directly or
indirectly, by any other Person (or any Affiliate or Associate
thereof) with which such Person (or any of such Person's
Affiliates or Associates) has any agreement, arrangement or
understanding (whether or not in writing), for the purpose of
acquiring, holding, voting (except pursuant to a revocable proxy
as described in the proviso to subparagraph (ii) of this
paragraph (e)) or disposing of any voting securities of the
Corporation; provided, however, that nothing in this
paragraph (e) 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.
(f) "Business Day" shall mean any day other than a Saturday,
Sunday or a day on which banking institutions in the State of New
York are authorized or obligated by law or executive order to
close.
(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 Stock" shall mean the common stock, par value $.02
per share, of the Corporation, except that "Common Stock" when
used with reference to any Person other than the Corporation
shall mean the capital stock (or units of beneficial interest
which represent the right to participate in profits, losses,
deductions and credits) 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) "Common Stock Equivalents" shall have the meaning set forth
in Section 11(a)(iii).
(j) RESERVED.
(k) "Current Market Price" shall have the meaning set forth in
Section 11(d)(i).
(l) "Current Value" shall have the meaning set forth in Section
11(a)(iii).
(m) "Distribution Date" shall have the meaning set forth in
Section 3(a).
(n) "Equivalent Preferred Stock" shall have the meaning set
forth in Section 11(b).
(o) "Exchange Act" shall have the meaning set forth in Section
1(d).
(p) "Exempt Person" shall mean the Corporation, any Subsidiary
of the Corporation, any employee benefit plan or employee stock
plan of the Corporation or any Subsidiary of the Corporation, or
any person or entity organized, appointed, or established by the
Corporation or any Subsidiary of the Corporation, for or pursuant
to the terms of any such plan.
(q) "Expiration Date" shall mean the earliest of (i) the Final
Expiration Date, (ii) the time at which the Rights are redeemed
as provided in Section 23, (iii) the time at which the Board of
Directors orders the exchange of Rights as provided in
Section 24, or (iv) the consummation of a transaction
contemplated by Section 13(d).
(r) "Final Expiration Date" shall mean the Close of Business on
January 27, 2009.
(s) "NASDAQ" shall mean the National Market System of the
National Association of Securities Dealers Automated Quotation
System.
(t) "Person" shall mean any individual, firm, corporation,
partnership or other entity.
(u) "Preferred Stock" shall mean shares of Series B Junior
Participating Preferred Stock, par value $.01 per share, of the
Corporation and, to the extent that there is not a sufficient
number of shares of Series B Junior Participating Preferred Stock
authorized to permit the full exercise of the Rights, any other
series of Preferred Stock of the Corporation designated for such
purpose containing terms substantially similar to the terms of
the Series B Junior Participating Preferred Stock.
(v) "Principal Party" shall have the meaning set forth in
Section 13(b).
(w) "Purchase Price" shall have the meaning set forth in Section
4(a).
(x) "Ratio of Exchange" shall have the meaning set forth in
Section 24(a).
(y) "Record Date" shall have the meaning set forth in the
WHEREAS clause at the beginning of this Agreement.
(z) "Redemption Price" shall have the meaning set forth in
Section 23(a).
(aa) "Rights" shall have the meaning set forth in the WHEREAS
clause at the beginning of this Agreement.
(bb) "Rights Certificates" shall have the meaning set forth in
Section 3(a).
(cc) "Rights Dividend Declaration Date" shall have the meaning
set forth in the WHEREAS clause at the beginning of this
Agreement.
(dd) "Section 11(a)(ii) Event" shall mean any event described in
Section 11(a)(ii).
(ee) "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii).
(ff) "Section 13 Event" shall mean any event described in clause
(x), (y) or (z) of Section 13(a).
(gg) RESERVED.
(hh) "Spread" shall have the meaning set forth in
Section 11(a)(iii).
(ii) "Stock Acquisition Date" shall mean the first date of public
announcement (which, for purposes of this definition, shall
include, without limitation, a report properly filed pursuant to
Section 13(d) under the Exchange Act) by the Corporation or an
Acquiring Person that an Acquiring Person has become such or such
earlier date as a majority of the Corporation's directors shall
become aware of the existence of an Acquiring Person; provided,
however, that if such Person is thereafter determined not to have
become an Acquiring Person within the meaning of Section 1(a),
then no Stock Acquisition Date shall be deemed to have occurred.
(jj) "Subsidiary" shall mean, with reference to any Person, any
corporation or other entity of which securities or other
ownership interests having ordinary voting power sufficient to
elect at least a majority of the directors of such corporation
(or other persons performing similar functions) is Beneficially
Owned, directly or indirectly, by such Person, or otherwise
controlled by such Person.
(kk) "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii).
(ll) "Trading Day" shall mean a day on which the principal
national securities exchange or market system on which the shares
of Common Stock are listed or admitted to trading is open for the
transaction of business or, if the shares of Common Stock are not
listed or admitted to trading on any national securities exchange
or market system, a Business Day.
(mm) "Triggering Event" shall mean any Section 11(a)(ii) Event or
any Section 13 Event.
Any determination required by the definitions contained in this
Section 1 shall be made by the Board of Directors of the
Corporation in its good faith judgment, which determination shall
be binding on the Rights Agent and the holders of the Rights.
2. Appointment of Rights Agent.
The Corporation hereby appoints the Rights Agent to act as agent
for the Corporation and the holders of the Rights (who, in
accordance with Section 3, shall prior to the Distribution Date
also be the holders of the Common Stock) in accordance with the
terms and conditions hereof, and the Rights Agent hereby accepts
such appointment. The Corporation may from time to time appoint
such Co-Rights Agents as it may deem necessary or desirable.
3. Issue of Rights Certificates.
(a) Until the earlier of (i) the Close of Business on the tenth
(10th) day after the Stock Acquisition Date (or, if the tenth
(10th) day after the Stock Acquisition Date occurs before the
Record Date, the Close of Business on the Record Date), or
(ii) the Close of Business on the tenth (10th) day after the date
that a tender or exchange offer by any Person (other than an
Exempt Person) is first published or sent or given within the
meaning of Rule 14d-2(a) of the General Rules and Regulations
under the Exchange Act, if, upon consummation thereof, such
Person, together with its Affiliates and Associates, would be the
Beneficial Owner of 20% or more of the shares of Common Stock
then outstanding (irrespective of whether any shares are actually
purchased pursuant to any such offer) (each of the time periods
in (i) and (ii) being subject to extension as provided in Section
27 and the earliest of (i) and (ii) being herein referred to as
the "Distribution Date"), (x) the Rights will be evidenced
(subject to the provisions of paragraph (b) of this Section 3) by
the certificates for the Common Stock registered in the names of
the holders of the Common Stock (which certificates for Common
Stock shall be deemed also to be certificates for Rights) and not
by separate certificates, and (y) each Right will be transferable
only in connection with the transfer of the underlying share of
Common Stock (including a transfer to the Corporation). As soon
as practicable after the Distribution Date, the Rights Agent will
send to each record holder of the Common Stock as of the Close of
Business on the Distribution Date, at the address of such holder
shown on the records of the Corporation, one or more rights
certificates in substantially the form of Exhibit B hereto (the
"Rights Certificates"), evidencing one Right for each share of
Common Stock so held, subject to adjustment as provided herein.
In the event that an adjustment in the number of Rights per share
of Common Stock has been made pursuant to Section 11(p), at the
time of distribution of the Rights Certificates, the Corporation
shall make the necessary and appropriate rounding adjustments (in
accordance with Section 14(a)) so that Rights Certificates
representing only whole numbers of Rights are distributed and
cash is paid in lieu of any fractional Rights. As of and after
the Distribution Date, the Rights will be evidenced solely by
such Rights Certificates.
(b) As promptly as practicable following the Record Date, the
Corporation will send a copy of a Summary of Rights to purchase
Preferred Stock, containing substantially the information set
forth in the form attached hereto as Exhibit C, to each record
holder of the Common Stock as of the Close of Business on the
Record Date, at the address of such holder shown on the records
of the Corporation. With respect to certificates for the Common
Stock outstanding as of the Record Date, until the Distribution
Date, the Rights will be evidenced by such certificates for the
Common Stock and the registered holders of the Common Stock shall
also be the registered holders of the associated Rights. Until
the earlier of the Distribution Date or the Expiration Date, the
transfer of any certificates representing shares of Common Stock
in respect of which Rights have been issued shall also constitute
the transfer of the Rights associated with such shares of Common
Stock.
(c) Rights shall be issued in respect of all shares of Common
Stock that are issued after the Record Date but prior to the
earliest of the Distribution Date or a Section 13 Event or the
Expiration Date. Certificates representing such shares of Common
Stock (including, without limitation, certificates issued upon
transfer or exchange of Common Stock) shall also be deemed to be
certificates for Rights, and shall bear the following legend:
This certificate also represents Rights that entitle
the holder hereof to certain rights as set forth in a
Rights Agreement between the Corporation and
Continental Stock Transfer & Trust Company, as Rights
Agent, dated as of January 27, 1999 (the "Rights
Agreement"), the terms, conditions and limitations 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
beneficially owned by, any Person who is, was or
becomes an Acquiring Person or any Affiliate or
Associate thereof (as such terms are defined in the
Rights Agreement), whether currently held by or on
behalf of such Person or by any subsequent holder, may
become null and void.
With respect to such certificates containing the foregoing
legend, the Rights associated with the Common Stock represented
by such certificates shall, until the Distribution Date, be
evidenced by such certificates alone and registered holders of
Common Stock shall also be the registered holders of the
associated Rights, and the transfer of any of such certificates
shall also constitute the transfer of the Rights associated with
the Common Stock represented by such certificates. If the
Corporation purchases or acquires any Common Stock after the
Record Date but before the Distribution Date, any Rights
associated with such Common Stock shall be deemed canceled and
retired.
4. Form of Rights Certificates.
(a) The Rights Certificates (and the forms of an election to
purchase and of assignment and of certificates to be printed on
the reverse thereof) when, as and if issued, shall each be
substantially in the form set forth in Exhibit B hereto and may
have such marks of identification or designation and such
legends, summaries or endorsements printed thereon as the
Corporation may deem appropriate and as are not inconsistent with
the provisions of this Agreement, or as may be required to comply
with any applicable law or with any rule or regulation made
pursuant thereto or with any rule or regulation of any stock
exchange on which the Rights may from time to time be listed or
market system on which the Rights may from time to time be
admitted, or to conform to usage. Subject to the provisions of
Section 11 and Section 22, the Rights Certificates, whenever
distributed, shall be dated as of the Record Date and on their
face shall entitle the holders thereof to purchase such number of
one one-thousandths of a share of Preferred Stock as shall be set
forth therein at the price set forth therein (such exercise price
per one one-thousandth of a share, the "Purchase Price"), but the
amount and type of securities purchasable upon the exercise of
each Right and the Purchase Price thereof shall be subject to
adjustment as provided herein.
(b) Notwithstanding any other provision of this Agreement, any
Rights Certificate issued pursuant to Section 3(a) or Section 22
that represents Rights Beneficially Owned by any Person known to
be (i) an Acquiring Person or any Associate or Affiliate of an
Acquiring Person, (ii) a transferee of an Acquiring Person (or of
any such Associate or Affiliate) who becomes a transferee after
the Acquiring Person becomes such, or (iii) a transferee of an
Acquiring Person (or of any such Associate or Affiliate) who
becomes a transferee prior to or concurrently with the Acquiring
Person becoming such and receives such Rights pursuant to either
(A) a transfer (whether or not for consideration) from the
Acquiring Person to holders of equity interests in such Acquiring
Person or to any Person with whom such Acquiring Person has any
continuing agreement, arrangement or understanding regarding the
transferred Rights or (B) a transfer that the Board of Directors
of the Corporation has determined is part of a plan, arrangement
or understanding which has as a primary purpose or effect
avoidance of Section 7(e), and any Rights Certificate issued
pursuant to Section 6 or Section 11 upon transfer, exchange,
replacement or adjustment of any other Rights Certificate
referred to in this sentence, shall contain (to the extent
feasible) the following legend, modified as applicable to apply
to such Person:
The Rights represented by this Rights Certificate are
or were beneficially owned by a Person who was or
became an Acquiring Person or an Affiliate or Associate
of an Acquiring Person (as such terms are defined in
the Rights Agreement). Accordingly, this Rights
Certificate and the Rights represented hereby may
become null and void in the circumstances specified in
Section 7(e) of such Agreement.
5. Countersignature and Registration.
(a) The Rights Certificates shall be executed on behalf of the
Corporation by its Chairman of the Board, its President or any
other officer of the Corporation designated by the Chairman or
President, either manually or by facsimile signature, and shall
have affixed thereto the Corporation's seal or a facsimile
thereof which shall be attested by the Secretary or an Assistant
Secretary of the Corporation, either manually or by facsimile
signature. The Rights Certificates shall be manually
countersigned by the Rights Agent and shall not be valid for any
purpose unless so countersigned. In case any officer of the
Corporation who shall have signed any of the Rights Certificates
shall cease to be such officer of the Corporation before
countersignature by the Rights Agent and issuance and delivery by
the Corporation, such Rights Certificates, nevertheless, may be
countersigned by the Rights Agent and issued and delivered by the
Corporation with the same force and effect as though the person
who signed such Rights Certificates had not ceased to be such
officer of the Corporation; and any Rights Certificates may be
signed on behalf of the Corporation by any person who, at the
actual date of the execution of such Rights Certificate shall be
a proper officer of the Corporation to sign such Rights
Certificate, although at the date of the execution of this Rights
Agreement any such person was not such an officer.
(b) Following the Distribution Date, the Rights Agent will keep
or cause to be kept, at its office or offices designated as the
appropriate place for surrender of Rights Certificates upon
exercise or transfer, books for registration and transfer of the
Rights Certificates issued hereunder. Such books shall show the
names and addresses of the respective holders of the Rights
Certificates, the number of Rights evidenced on its face by each
of the Rights Certificates and the certificate number and the
date of each of the Rights Certificates.
6. Transfer, Split-Up, Combination and Exchange of
Rights Certificates; Mutilated, Destroyed, Lost or
Stolen Rights Certificates.
(a) Subject to the provisions of Section 4(b), Section 7(e) and
Section 14, at any time after the Close of Business on the
Distribution Date, and at or prior to the Close of Business on
the Expiration Date, any Rights Certificate or Certificates may
be transferred, split up, combined or exchanged for another
Rights Certificate or Certificates, entitling the registered
holder to purchase a like number of one-thousandths of a share of
Preferred Stock (or, following a Triggering Event, Common Stock,
other securities, cash or other assets, as the case may be) as
the Rights Certificate or Certificates surrendered then entitled
such holder (or former holder in the case of a transfer) to
purchase. Any registered holder desiring to transfer, split up,
combine or exchange any Rights Certificate or Certificates shall
make such request in writing delivered to the Rights Agent, and
shall surrender the Rights Certificate or Certificates to be
transferred, split up, combined or exchanged at the office or
offices of the Rights Agent designated for such purpose. Neither
the Rights Agent nor the Corporation shall be obligated to take
any action whatsoever with respect to the transfer of any such
surrendered Rights Certificate until the registered holder shall
have completed and signed the certificate contained in the form
of assignment on the reverse side of such Rights Certificate and
shall have provided such additional evidence of the identity of
the Beneficial Owner (or former Beneficial Owner) or Affiliates
or Associates thereof as the Corporation shall reasonably
request. Thereupon the Rights Agent shall, subject to Section
4(b), Section 7(e) and Section 14, countersign and deliver to the
Person entitled thereto a Rights Certificate or Rights
Certificates, as the case may be, as so requested. The
Corporation may require payment of a sum sufficient to cover any
tax or governmental charge that may be imposed in connection with
any transfer, split up, combination or exchange of Rights
Certificates.
(b) Upon receipt by the Corporation and the Rights Agent of
evidence reasonably satisfactory to them of the loss, theft,
destruction or mutilation of a Rights Certificate, and, in case
of loss, theft or destruction, of indemnity or security
reasonably satisfactory to them, and reimbursement to the
Corporation and the Rights Agent of all reasonable expenses
incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Rights Certificate if mutilated, the
Corporation will execute and deliver a new Rights Certificate of
like tenor to the Rights Agent for countersignature and delivery
to the registered owner in lieu of the Rights Certificate so
lost, stolen, destroyed or mutilated.
7. Exercise of Rights; Purchase Price; Expiration
Date of Rights.
(a) Subject to Section 7(e), Section 23(b) and Section 24(b),
the registered holder of any Rights Certificate may exercise the
Rights evidenced thereby (except as otherwise provided herein
including, without limitation, the restrictions on exercisability
set forth in Section 9(c), Section 11(a)(iii) and Section 23(a)),
in whole or in part at any time after the Distribution Date upon
surrender of the Rights Certificate, with the form of election to
purchase and the certificate on the reverse side thereof duly
executed, to the Rights Agent at the office or offices of the
Rights Agent designated for such purpose, together with payment
of the aggregate Purchase Price with respect to the total number
of one one-thousandths of a share of Preferred Stock (or other
securities, cash or other assets, as the case may be) as to which
such surrendered Rights are then exercisable, at or prior to the
Expiration Date.
(b) The Purchase Price for each one one-thousandth of a share of
Preferred Stock pursuant to the exercise of a Right shall
initially be $100, and shall be subject to adjustment from time
to time as provided in Section 11 and Section 13(a) and shall be
payable in accordance with paragraph (c) below.
(c) Upon receipt of a Rights Certificate representing
exercisable Rights, with the form of election to purchase and the
certificate duly executed, accompanied by payment, with respect
to each Right so exercised, of the Purchase Price per one one-
thousandth of a share of Preferred Stock (or other shares,
securities, cash or other assets, as the case may be) to be
purchased as set forth below and an amount equal to any
applicable transfer tax, the Rights Agent shall, subject to
Section 20(k), thereupon promptly (i) (A) requisition from any
transfer agent of the shares of Preferred Stock (or make
available, if the Rights Agent is the transfer agent for such
shares) certificates for the total number of one one-thousandths
of a share of Preferred Stock to be purchased and the Corporation
hereby authorizes its transfer agent to comply with all such
requests, or (B) if the Corporation shall have elected to deposit
the total number of shares of Preferred Stock issuable upon
exercise of the Rights hereunder with a depository agent,
requisition from the depository agent depository receipts
representing such number of one one-thousandths of a share of
Preferred Stock as are to be purchased (in which case
certificates for the shares of Preferred Stock represented by
such receipts shall be deposited by the transfer agent with the
depository agent) and the Corporation will direct the depository
agent to comply with such request, (ii) requisition from the
Corporation an amount of cash, if any, to be paid in lieu of
fractional shares in accordance with Section 14, (iii) after
receipt of such certificates or depository receipts, cause the
same to be delivered to or upon the order of the registered
holder of such Rights Certificate, registered in such name or
names as may be designated by such holder, and (iv) after receipt
thereof, deliver such cash, if any, to or upon the order of the
registered holder of such Rights Certificate. The payment of the
Purchase Price (as such amount may be reduced pursuant to
Section 11(a)(iii)) may be made by bank draft, certified bank
check or money order payable to the order of the Corporation. In
the event that the Corporation is obligated to issue other
securities (including Common Stock) of the Corporation, pay cash
and/or distribute other property pursuant to Section 11(a), the
Corporation will make all arrangements necessary so that such
other securities, cash and/or other property are available for
distribution by the Rights Agent, if and when appropriate.
(d) In case the registered holder of any Rights Certificate
shall exercise less than all the Rights evidenced thereby, a new
Rights Certificate evidencing Rights equivalent to the Rights
remaining unexercised shall be issued by the Rights Agent and
delivered to, or upon the order of, the registered holder of such
Rights Certificate, registered in such name or names as may be
designated by such holder, subject to the provisions of Section
14.
(e) Notwithstanding anything in this Agreement to the contrary,
from and after the occurrence of a Section 11(a)(ii) Event, any
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 of any such Associate or Affiliate)
who becomes a transferee after the Acquiring Person becomes such,
or (iii) a transferee of an Acquiring Person (or of any such
Associate of 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) by or for 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 which the Board of Directors of the Corporation
has determined is part of a plan, arrangement or understanding
which has as a primary purpose or effect the avoidance of this
Section 7(e), shall become null and void without any further
action and no holder of such Rights shall have any rights
whatsoever with respect to such Rights, whether under any
provision of this Agreement or otherwise. The Corporation shall
use all reasonable efforts to ensure that the provisions of this
Section 7(e) and Section 4(b) are complied with, but shall have
no liability to any holder of Rights Certificates or other Person
as a result of its failure to make any determinations with
respect to an Acquiring Person or any of their respective
Affiliates, Associates or transferees hereunder.
(f) Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Corporation shall be obligated
to undertake any action with respect to a registered holder upon
the occurrence of any purported exercise as set forth in this
Section 7 unless such registered holder shall have (i) completed
and signed the certificate contained in the form of election to
purchase set forth on the reverse side of the Rights Certificate
surrendered for such exercise, and (ii) provided such additional
evidence of the identity of the Beneficial Owner (or former
Beneficial Owner) or Affiliates or Associates thereof as the
Corporation shall reasonably request.
8. Cancellation and Destruction of Rights
Certificates.
All Rights Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered
to the Corporation or any of its agents, be delivered to the
Rights Agent for cancellation or in canceled form, or, if
surrendered to the Rights Agent, shall be canceled by it, and no
Rights Certificates shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Agreement.
The Corporation shall deliver to the Rights Agent for
cancellation and retirement, and the Rights Agent shall so cancel
and retire, any other Rights Certificate purchased or acquired by
the Corporation otherwise than upon the exercise thereof. The
Rights Agent shall deliver all canceled Rights Certificates to
the Corporation, or shall, at the written request of the
Corporation, destroy such canceled Rights Certificates, and in
such case shall deliver a certificate of destruction thereof to
the Corporation.
9. Reservation and Availability of Capital Stock.
(a) The Corporation covenants and agrees that it will cause to
be reserved and kept available out of its authorized and unissued
shares of Preferred Stock (and, following the occurrence of a
Triggering Event, out of its authorized and unissued shares of
Common Stock and/or other securities or out of its authorized and
issued shares held in its treasury), the number of shares of
Preferred Stock (and, following the occurrence of a Triggering
Event, Common Stock and/or other securities) that, as provided in
this Agreement including Section 11(a)(iii), will be sufficient
to permit the exercise in full of all outstanding Rights;
provided, however, that the Corporation shall not be required to
reserve and keep available shares of Preferred Stock, Common
Stock or other securities sufficient to permit the exercise in
full of all outstanding Rights pursuant to the adjustments set
forth in Section 11(a)(ii), Section 11(a)(iii) or Section 13
unless, and only to the extent that, the Rights become
exercisable pursuant to such adjustments.
(b) So long as the shares of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) issuable and deliverable upon the exercise of Rights
may be listed on any national securities exchange or market
system, the Corporation 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 or
market system upon official notice of issuance upon such
exercise.
(c) If necessary to permit the offer and issuance of Preferred
Stock (and, following the occurrence of a Triggering Event,
Common Stock and/or other securities) issuable and deliverable
upon the exercise of Rights, the Corporation shall use its best
efforts to (i) file, as soon as practicable following the
earliest date after the occurrence of a Section 11(a)(ii) Event
on which the consideration to be delivered by the Corporation
upon exercise of the Rights has been determined in accordance
with Section 11(a)(iii), or as soon as is required by law
following the Distribution Date, as the case may be, a
registration statement under the Act, with respect to the
securities purchasable upon exercise of the Rights on an
appropriate form, (ii) cause such registration statement to
become effective as soon as practicable after such filing, and
(iii) cause such registration statement to remain effective (with
a prospectus at all times meeting the requirements of the Act)
until the earlier of (A) the date as of which the Rights are no
longer exercisable for such securities, and (B) the date of the
expiration of the Rights. The Corporation will also take such
action as may be appropriate under, or to ensure compliance with,
the securities or "blue sky" laws of the various states in
connection with the exercisability of the Rights. The
Corporation may temporarily suspend, for a period of time not to
exceed ninety (90) days after the date set forth in clause (i) of
the first sentence of this Section 9(c), the exercisability of
the Rights in order to prepare and file such registration
statement and permit it to become effective. Upon any such
suspension, the Corporation shall issue a public announcement
stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. Notwithstanding
any provision of this Agreement to the contrary, the Rights shall
not be exercisable in any jurisdiction, unless the requisite
qualification in such jurisdiction shall have been obtained and
until a registration statement (if required) has been declared
effective.
(d) The Corporation covenants and agrees that it will take all
such action as may be necessary to ensure that all one one-
thousandths of a share of Preferred Stock (and, following the
occurrence of a Triggering Event, Common Stock and/or other
securities) delivered upon exercise of Rights shall, at the time
of delivery of the certificates for such shares (subject to
payment of the Purchase Price), be duly and validly authorized
and issued and fully paid and nonassessable.
(e) The Corporation further covenants and agrees that it will
pay when due and payable any and all federal and state transfer
taxes and charges which may be payable in respect of the issuance
or delivery of the Rights Certificates and of any certificates
for a number of one one-thousandths of a share of Preferred Stock
(or Common Stock and/or other securities, as the case may be)
upon the exercise of Rights. The Corporation shall not, however,
be required to pay any transfer tax which may be payable in
respect of any transfer or delivery of Rights Certificates to a
Person other than, or the issuance or delivery of a number of one
one-thousandths of a share of Preferred Stock (or Common Stock
and/or other securities, as the case may be) in respect of a name
other than that of, the registered holder of the Rights
Certificates evidencing Rights surrendered for exercise or to
issue or deliver any certificates for a number of one one-
thousandths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) in a name other than that
of the registered holder upon the exercise of any Rights until
such tax shall have been paid (any such tax being payable by the
holder of such Rights Certificate at the time of surrender) or
until it has been established to the Corporation's satisfaction
that no such tax is due.
10. Preferred Stock Record Date.
Each person in whose name any certificate for a number of one one-
thousandths of a share of Preferred Stock (or Common Stock and/or
other securities, as the case may be) is issued upon the exercise
of Rights shall for all purposes be deemed to have become the
holder of record of such fractional shares of Preferred Stock (or
Common Stock and/or other securities, as the case may be)
represented thereby and such certificate shall be dated as of the
date upon which the Rights Certificate evidencing such Rights was
duly surrendered and payment of the Purchase Price (and all
applicable transfer taxes) was made; provided, however, that if
the date of such surrender and payment is a date upon which the
Preferred Stock (or Common Stock and/or other securities, as the
case may be) transfer books of the Corporation are closed, such
Person shall be deemed to have become the record holder of such
shares (fractional or otherwise) on, and such certificate shall
be dated, the next succeeding Business Day on which the Preferred
Stock (or Common Stock and/or other securities, as the case may
be) transfer books of the Corporation are open. Prior to the
exercise of the Rights evidenced thereby, the holder of a Rights
Certificate, as such, shall not be entitled to any rights of a
stockholder of the Corporation with respect to shares for which
the Rights shall be exercisable, including, without limitation,
the right to vote, to receive dividends or other distributions or
to exercise any preemptive rights, and shall not be entitled to
receive any notice of any proceedings of the Corporation, except
as provided herein.
11. Adjustment of Purchase Price, Number and Kind of
Shares or Number of Rights.
The Purchase Price, the number and kind of shares covered by each
Right and the number of Rights outstanding are subject to
adjustment from time to time as provided in this Section 11.
(a) (i) In the event the Corporation shall at any time after
the date of this Agreement (A) declare a dividend on the
Preferred Stock payable in shares of Preferred Stock, (B)
subdivide the outstanding Preferred Stock, (C) combine the
outstanding Preferred Stock into a smaller number of shares, or
(D) issue any shares of its capital stock in a reclassification
of the Preferred Stock (including any such reclassification in
connection with a consolidation or merger in which the
Corporation is the continuing or surviving corporation), except
as otherwise provided in this Section 11(a) and Section 7(e), the
Purchase Price in effect at the time of the record date for such
dividend or of the effective date of such subdivision,
combination or reclassification, and the number and kind of
shares of Preferred Stock or capital stock, as the case may be,
issuable on such date, shall be proportionately adjusted so that
the holder of any Right exercised after such time shall be
entitled to receive, upon payment of the Purchase Price then in
effect, the aggregate number and kind of shares of Preferred
Stock or capital stock, as the case may be, which, if such Right
had been exercised immediately prior to such date and at a time
when the Preferred Stock transfer books of the Corporation were
open, he would have owned upon such exercise and been entitled to
receive by virtue of such dividend, subdivision, combination or
reclassification. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section
11(a)(ii), the adjustment provided for in this Section 11(a)(i)
shall be in addition to, and shall be made prior to, any
adjustment required pursuant to Section 11(a)(ii).
(ii) Subject to Section 23(a) and Section 24, in the
event any Person (other than an Exempt Person), alone or together
with its Affiliates and Associates, shall, at any time after the
Rights Dividend Declaration Date, become the Beneficial Owner of
20% or more of the shares of Common Stock then outstanding,
unless the event causing the 20% threshold to be crossed is a
transaction set forth in Section 13(a), or is an acquisition of
shares of Common Stock pursuant to a tender offer or an exchange
offer for all outstanding shares of Common Stock at a price and
on terms determined by the Board of Directors of the Corporation,
after receiving advice from one or more investment banking firms,
to be (a) at a price which is fair to stockholders of the
Corporation (taking into account all factors which members of the
Board deem relevant including, without limitation, prices which
could reasonably be achieved if the Corporation or its assets
were sold on an orderly basis designed to realize maximum value)
and (b) otherwise in the best interests of the Corporation and
its stockholders, then, proper provision shall be made so that
each holder of a Right (except as provided below and in Section
7(e)) shall thereafter have the right to receive, upon exercise
thereof at the then current Purchase Price in accordance with the
terms of this Agreement, in lieu of a number of one one-
thousandths of a share of Preferred Stock, such number of shares
of Common Stock of the Corporation as shall equal the result
obtained by (x) multiplying the then current Purchase Price by
the then number of one one-thousandths of a share of Preferred
Stock for which a Right was exercisable immediately prior to the
occurrence of a Section 11(a)(ii) Event, and (y) dividing that
product (which, following such occurrence, shall thereafter be
referred to as the "Purchase Price" for each Right and for all
purposes of this Agreement) by 50% of the Current Market Price
(determined pursuant to Section 11(d)) per share of Common Stock
on the date of such occurrence (such number of shares is herein
called the "Adjustment Shares"); provided that the Purchase Price
and the number of Adjustment Shares shall be further adjusted as
provided in this Agreement to reflect any events occurring after
the date of such occurrence; and provided, further, that if the
transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13, then
only the provisions of Section 13 shall apply and no adjustment
shall be made pursuant to this Section 11(a)(ii).
(iii) In the event that the number of shares of
Common Stock which are authorized by the Corporation's
Certificate of Incorporation but not outstanding or reserved for
issuance for purposes other than upon exercise of the Rights is
not sufficient to permit the exercise in full of the Rights in
accordance with the foregoing subparagraph (ii) of this
Section 11(a) and the Rights shall become so exercisable, to the
extent permitted by applicable law and any agreements in effect
on the date hereof to which the Corporation is a party, the
Corporation shall (A) determine the excess of (1) the value of
the Adjustment Shares issuable upon the exercise of a Right (the
"Current Value") over (2) the Purchase Price (such excess, the
"Spread"), and (B) with respect to each Right, make adequate
provision to substitute for the Adjustment Shares, upon payment
of the applicable Purchase Price, (1) cash, (2) a reduction in
the Purchase Price, (3) Common Stock or other equity securities
of the Corporation (including, without limitation, shares, or
units of shares, of preferred stock which the Board of Directors
of the Corporation has deemed to have the same value as shares of
Common Stock (such shares of preferred stock, "Common Stock
Equivalents")), (4) debt securities of the Corporation, (5) other
assets, or (6) any combination of the foregoing, having an
aggregate value equal to the Current Value, where such aggregate
value has been determined by the Board of Directors of the
Corporation based upon the advice of a nationally recognized
investment banking firm selected by the Board of Directors of the
Corporation; provided, however, if the Corporation shall not have
made adequate provision to deliver value pursuant to clause (B)
above within thirty (30) days following the later of (x) the
occurrence of a Section 11(a)(ii) Event and (y) the date on which
the Corporation's right of redemption pursuant to Section 23(a)
expires (the later of (x) and (y) being referred to herein as the
"Section 11(a)(ii) Trigger Date"), then the Corporation shall be
obligated to deliver, upon the surrender for exercise of a Right
and without requiring payment of the Purchase Price, shares of
Common Stock (to the extent available) and then, if necessary,
cash, which shares and/or cash have an aggregate value equal to
the Spread. If the Board of Directors of the Corporation shall
determine in good faith that it is likely that sufficient
additional shares of Common Stock could be authorized for
issuance upon exercise in full of the Rights, the thirty (30) day
period set forth above may be extended to the extent necessary,
but not more than ninety (90) days after the Section 11(a)(ii)
Trigger Date, in order that the Corporation may seek stockholder
approval for the authorization of such additional shares (such
period, as it may be extended, the "Substitution Period"). To
the extent that the Corporation determines that some action need
be taken pursuant to the first and/or second sentences of this
Section 11(a)(iii), the Corporation (x) shall provide, subject to
Section 7(e), that such action shall apply uniformly to all
outstanding Rights, and (y) may suspend the exercisability of the
Rights until the expiration of the Substitution Period in order
to seek any authorization of additional shares and/or to decide
the appropriate form of distribution to be made pursuant to such
first sentence and to determine the value thereof. In the event
of any such suspension, the Corporation shall issue a public
announcement stating that the exercisability of the Rights has
been temporarily suspended, as well as a public announcement at
such time as the suspension is no longer in effect. For purposes
of this Section 11(a)(iii), the value of the Common Stock shall
be the Current Market Price (as determined pursuant to
Section 11(d)) per share of the Common Stock on the
Section 11(a)(ii) Trigger Date and the value of any "Common Stock
Equivalent" shall be deemed to have the same value as the Common
Stock on such date. The Board of Directors may, but shall not be
required to, establish procedures to allocate the right to
receive Common Stock upon the exercise of Rights pursuant to this
Section 11(a)(iii).
(b) In case the Corporation shall fix a record date for the
issuance of rights (other than the Rights), options or warrants
to all holders of Preferred Stock entitling them to subscribe for
or purchase (for a period expiring within forty-five (45)
calendar days after such record date) Preferred Stock (or shares
having the same rights, privileges and preferences as the shares
of Preferred Stock ("Equivalent Preferred Stock")) or securities
convertible into Preferred Stock or Equivalent Preferred Stock at
a price per share of Preferred Stock or per share of Equivalent
Preferred Stock (or having a conversion price per share, if a
security convertible into Preferred Stock or Equivalent Preferred
Stock) less than the Current Market Price (as determined pursuant
to Section 11(d)) per share of Preferred Stock on such record
date, the Purchase Price to be in effect after such record date
shall be determined by multiplying the Purchase Price in effect
immediately prior to such record date by a fraction, the
numerator of which shall be the number of shares of Preferred
Stock outstanding on such record date, plus the number of shares
of Preferred Stock which the aggregate offering price of the
total number of shares of Preferred Stock (and/or Equivalent
Preferred Stock so to be offered and/or the aggregate initial
conversion price of the convertible securities so to be offered)
would purchase at such Current Market Price, and the denominator
of which shall be the number of shares of Preferred Stock
outstanding on such record date, plus the number of additional
shares of Preferred Stock and/or Equivalent Preferred Stock to be
offered for subscription or purchase (or into which the
convertible securities so to be offered are initially
convertible). In case such subscription price may be paid by
delivery of consideration part or all of which may be in a form
other than cash, the value of such consideration shall be as
determined in good faith by the Board of Directors of the
Corporation, whose determination shall be described in a
statement filed with the Rights Agent and shall be binding on the
Rights Agent and the holders of the Rights. Shares of Preferred
Stock owned by or held for the account of the Corporation shall
not be deemed outstanding for the purpose of any such
computation. Such adjustment shall be made successively whenever
such a record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted
to be the Purchase Price which would then be in effect if such
record date had not been fixed.
(c) In case the Corporation shall fix a record date for a
distribution to all holders of Preferred Stock (including any
such distribution made in connection with a consolidation or
merger in which the Corporation is the continuing corporation) of
evidences of indebtedness, cash (other than a cash dividend out
of the earnings or retained earnings of the Corporation), assets
(other than a dividend payable in Preferred Stock, but including
any dividend payable in stock other then Preferred Stock) or
subscription rights or warrants (excluding those referred to in
Section 11(b)), the Purchase Price to be in effect after such
record date shall be determined by multiplying the Purchase Price
in effect immediately prior to such record date by a fraction,
the numerator of which shall be the Current Market Price (as
determined pursuant to Section 11(d)) per share of Preferred
Stock on such record date, less the fair market value (as
determined in good faith by the Board of Directors of the
Corporation, whose determination shall be described in a
statement filed with the Rights Agent) of the portion of the
cash, assets or evidences of indebtedness so to be distributed or
of such subscription rights or warrants applicable to a share of
Preferred Stock and the denominator of which shall be such
Current Market Price (as determined pursuant to Section 11(d))
per share of Preferred Stock. Such adjustments shall be made
successively whenever such a record dated is fixed, and in the
event that such distribution is not so made, the Purchase Price
shall be adjusted to be the Purchase Price which would have been
in effect if such record date had not been fixed.
(d) (i) For the purpose of any computation hereunder, other
than computations made pursuant to Section 11(a)(iii), the
"Current Market Price" per share of Common Stock on any date
shall be deemed to be the average of the daily closing prices per
share of such Common Stock for the thirty (30) consecutive
Trading Days (as hereinafter defined) immediately prior to such
date and for purposes of computations made pursuant to
Section 11(a)(iii), the "Current Market Price" per share of
Common Stock on any date shall be deemed to be the average of the
daily closing prices per share of such Common Stock for the then
ten (10) consecutive Trading Days immediately following such
date; provided, however, that in the event that the Current
Market Price per share of the Common Stock is determined during a
period following the announcement by the issuer of such Common
Stock of (A) a dividend or distribution on such Common Stock
payable in shares of such Common Stock or securities convertible
into shares of such Common Stock (other than the Rights), or (B)
any subdivision, combination or reclassification of such Common
Stock, and prior to the expiration of the requisite thirty (30)
Trading Day or ten (10) Trading Day period, as set forth above,
after the ex-dividend date for such dividend or distribution, or
the record date for such subdivision, combination or
reclassification, then, and in each such case, the Current Market
Price shall be properly adjusted to take into account ex-dividend
trading. The closing price for each day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
shares of Common Stock are not listed or admitted to trading on
the New York Stock Exchange, as reported in the principal
consolidated transaction reporting system with respect to
securities listed on the principal national securities exchange
or the NASDAQ National Market System on which the shares of
Common Stock are listed or admitted to trading or, if the shares
of Common Stock are not listed or admitted to trading on any
national securities exchange or the NASDAQ National Market System
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 shares of Common Stock are not quoted by any
such organization, the average of the closing bid and asked
prices as furnished by a professional market maker making a
market in the Common Stock selected by the Board of Directors of
the Corporation. If on any such date no market maker is making a
market in the Common Stock, the fair value of such shares on such
date as determined in good faith by the Board of Directors of the
Corporation shall be used. If the Common Stock is not publicly
held or not so listed or traded, Current Market Price per share
shall mean the fair value per share as determined in good faith
by the Board of Directors of the Corporation, whose determination
shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
(ii) For the purpose of any computation hereunder, the
Current Market Price per share of Preferred Stock shall be
determined in the same manner as set forth above for the Common
Stock in clause (i) of this Section 11(d) (other than the last
sentence thereof). If the Current Market Price per share of
Preferred Stock cannot be determined in the manner provided above
or if the Preferred Stock is not publicly held or listed or
traded in a manner described in clause (i) of this Section 11(d),
the Current Market Price per share of Preferred Stock shall be
conclusively deemed to be an amount equal to 1,000 (as such
number may be appropriately adjusted for such events as stock
splits, stock dividends and recapitalizations with respect to the
Common Stock occurring after the date of this Agreement)
multiplied by the Current Market Price per share of the Common
Stock. If neither the Common Stock nor the Preferred Stock is
publicly held or so listed or traded, Current Market Price per
share of the Preferred Stock shall mean the fair value per share
as determined in good faith by the Board of Directors of the
Corporation, whose determination shall be described in a
statement filed with the Rights Agent and shall be conclusive for
all purposes. For all purposes of this Agreement, the Current
Market Price of one one-thousandth of a share of Preferred Stock
shall be equal to the Current Market Price of one share of
Preferred Stock divided by 1,000.
(e) Anything herein to the contrary notwithstanding, no
adjustment in the Purchase Price shall be required unless such
adjustment would require an increase or decrease of at least one
percent (1%) in the Purchase Price; provided, however, that any
adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into
account in any subsequent adjustment. All calculations under
this Section 11 shall be made to the nearest cent or to the
nearest ten-thousandth of a share of Common Stock or other share
or one-millionth of a share of Preferred Stock, as the case may
be. Notwithstanding the first sentence of this Section 11(e), an
adjustment required by this Section 11 shall be made no later
than the earlier of (i) three (3) years from the date of the
transaction which mandates such adjustment, or (ii) the
Expiration Date.
(f) If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a), the holder of any Right thereafter
exercised shall become entitled to receive any shares of capital
stock other than Preferred Stock, thereafter the number of such
other shares so receivable upon exercise of any Right and the
Purchase Price thereof shall be subject to adjustment from time
to time in a manner and on terms as nearly equivalent as
practicable to the provisions with respect to the Preferred Stock
contained in Section 11, and the provisions of Section 7, Section
9, Section 10, Section 13, and Section 14 with respect to the
Preferred Stock shall apply on like terms to any such other
shares.
(g) All Rights originally issued by the Corporation subsequent
to any adjustment made to the Purchase Price hereunder shall
evidence the right to purchase, at the adjusted Purchase Price,
the number of one one-thousandths of a share of Preferred Stock
purchasable from time to time hereunder upon exercise of the
Rights, all subject to further adjustment as provided herein.
(h) Unless the Corporation shall have exercised its election as
provided in Section 11(i), upon each adjustment of the Purchase
Price as a result of the calculations made in Section 11(b) and
Section 11(c), each Right outstanding immediately prior to the
making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of one one-
thousandths of a share of Preferred Stock (calculated to the
nearest one ten-thousandths) obtained by (i) multiplying (x) the
number of one one-thousandths of a share covered by a Right
immediately prior to this adjustment, by (y) the Purchase Price
in effect immediately prior to such adjustment of the Purchase
Price, and (ii) dividing the product so obtained by the Purchase
Price in effect immediately after such adjustment of the Purchase
Price.
(i) The Corporation may elect on or after the date of any
adjustment of the Purchase Price to adjust the number of Rights,
in lieu of any adjustment in the number of one one-thousandths of
a share of Preferred Stock purchasable upon the exercise of a
Right. Each of the Rights outstanding after the adjustment in
the number of Rights shall be exercisable for the number of one
one-thousandths of a share of Preferred Stock for which a Right
was exercisable immediately prior to such adjustment. Each Right
held of record prior to such adjustment of the number of Rights
shall become that number of Rights (calculated to the nearest one-
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 Corporation shall make a public announcement
of its election to adjust the number of Rights, indicating the
record date for the adjustment to be made. This record date may
be the date on which the Purchase Price is adjusted or any day
thereafter, but, if the Rights Certificates have been issued,
shall be at least ten (10) days later than the date of the public
announcement. If Rights Certificates have been issued, upon each
adjustment of the number of Rights pursuant to this
Section 11(i), the Corporation shall, as promptly as practicable,
cause to be distributed to holders of record of Rights
Certificates on such record date Rights Certificates evidencing,
subject to Section 14, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at
the option of the Corporation, shall cause to be distributed to
such holders of record in substitution and replacement for the
Rights Certificates held by such holders prior to the date of
adjustment, and upon surrender thereof, if required by the
Corporation, new Rights Certificates evidencing all the Rights to
which such holders shall be entitled after such adjustment.
Rights Certificates so to be distributed shall be issued executed
and countersigned in the manner provided for herein (and may
bear, at the option of the Corporation, the adjusted Purchase
Price) and shall be registered in the names of the holders of
record of Rights Certificates on the record date specified in the
public announcement.
(j) Irrespective of any adjustment or change in the Purchase
Price or the number of one one-thousandths of a share of
Preferred Stock issuable upon the exercise of the Rights, the
Rights Certificates theretofore and thereafter issued may
continue to express the Purchase Price per one one-thousandths of
a share and the number of one one-thousandths of a share which
were expressed in the initial Rights Certificates issued
hereunder.
(k) Before taking any action that would cause adjustment
reducing the Purchase Price below the then stated value, if any,
of the number of one one-thousandths of a share of Preferred
Stock issuable upon exercise of the Rights, the Corporation shall
take any corporate action which may, in the opinion of its
counsel, be necessary in order that the Corporation may validly
and legally issue fully paid and nonassessable such number of one
one-thousandths of a share of Preferred Stock at such adjusted
Purchase Price.
(l) In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record
date for a specified event, the Corporation may elect to defer
until the occurrence of such event the issuance to the holder of
any Right exercised after such record date the number of one one-
thousandths of a share of Preferred Stock and other capital stock
or securities of the Corporation, if any, issuable upon such
exercise over and above the number of one one-thousandths of a
share of Preferred Stock and other capital stock or securities of
the Corporation, if any, issuable upon such exercise on the basis
of the Purchase Price in effect prior to such adjustment;
provided, however, that the Corporation shall deliver to such
holder a due xxxx or other appropriate instrument evidencing such
holder's right to receive such additional shares (fractional or
otherwise) or securities upon the occurrence of the event
requiring such adjustment.
(m) Anything in this Section 11 to the contrary notwithstanding,
the Corporation shall be entitled to make such reductions in the
Purchase Price, in addition to those adjustments expressly
required by this Section 11, as and to the extent that in their
good faith judgment the Board of Directors of the Corporation
shall determine to be advisable in order that any
(i) consolidation or subdivision of the Preferred Stock,
(ii) issuance wholly for cash of any shares of Preferred Stock at
less than the Current Market Price, (iii) issuance wholly for
cash of shares of Preferred Stock or securities which by their
terms are convertible into or exchangeable for shares of
Preferred Stock, (iv) stock dividends or (v) issuance of rights,
options or warrants referred to in this Section 11, hereafter
made by the Corporation to holders of its Preferred Stock shall
not be taxable to such stockholders.
(n) The Corporation covenants and agrees that it shall not, at
any time after the Distribution Date, (i) consolidate with any
other Person (other than a Subsidiary of the Corporation in a
transaction which complies with Section 11(o)), (ii) merge with
or into any other Person (other than a Subsidiary of the
Corporation in a transaction which complies with Section 11(o)),
or (iii) sell or transfer (or permit any Subsidiary to sell or
transfer), in one transaction, or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Corporation and its
Subsidiaries (taken as a whole) to any other Person or Persons
(other than the Corporation and/or any of its Subsidiaries in one
or more transactions each of which complies with Section 11(o)),
if (x) at the time of or immediately after such consolidation,
merger, sale or transfer there are any rights, warrants or other
instruments or securities outstanding or agreements in effect
which would substantially diminish or otherwise eliminate the
benefits intended to be afforded by the Rights or (y) prior to,
simultaneously with or immediately after such consolidation,
merger, sale or transfer, the stockholders of the Person who
constitutes, or would constitute, the Principal Party (as
hereinafter defined) for purposes of Section 13(a) shall have
received a distribution of Rights previously owned by such Person
or any of its Affiliates and Associates.
(o) The Corporation covenants and agrees that, after the
Distribution Date, it will not, except as permitted by Section
23, Section 24 or Section 27, take (or permit any Subsidiary to
take) any action if at the time such action is taken it is
reasonably foreseeable that such action will diminish
substantially or otherwise eliminate the benefits intended to be
afforded by the Rights.
(p) Anything in this Agreement to the contrary notwithstanding,
in the event that the Corporation shall at any time after the
Rights Dividend Declaration Date and prior to the Distribution
Date (i) declare a dividend on the outstanding shares of Common
Stock payable in shares of Common Stock, (ii) subdivide the
outstanding shares of Common Stock, or (iii) combine the
outstanding shares of Common Stock into a smaller number of
shares, the number of Rights associated with each share of Common
Stock then outstanding, or issued or delivered thereafter but
prior to the Distribution Date, shall be proportionately adjusted
so that the number of Rights thereafter associated with each
share of Common Stock following any such event shall equal the
result obtained by multiplying the number of Rights associated
with each share of Common Stock immediately prior to such event
by a fraction the numerator which shall be the total number of
shares of Common Stock outstanding immediately prior to the
occurrence of the event and the denominator of which shall be the
total number of shares of Common Stock outstanding immediately
following the occurrence of such event.
12. Certificate of Adjusted Purchase Price or Number
of Shares.
Whenever an adjustment is made as provided in Section 11 and
Section 13, the Corporation shall (a) promptly prepare a
certificate setting forth such adjustment and a brief statement
of the facts accounting for such adjustment, (b) promptly file
with the Rights Agent, and with each transfer agent for the
Preferred Stock and the Common Stock, a copy of such certificate,
and (c) mail a brief summary thereof to each holder of a Rights
Certificate (or, if prior to the Distribution Date, to each
holder of a certificate representing shares of Common Stock) in
accordance with Section 25. Notwithstanding the foregoing
sentence, the failure of the Corporation to give such notice
shall not affect the validity of or the force or effect of or the
requirement for such adjustment. The Rights Agent shall be fully
protected in relying on any such certificate and on any
adjustment therein contained. Any adjustment to be made pursuant
to Section 11 and Section 13 shall be effective as of the date of
the event giving rise to such adjustment.
13. Consolidation, Merger or Sale or Transfer of
Assets or Earning Power.
(a) In the event that, following the Stock Acquisition Date,
directly or indirectly, (x) the Corporation shall consolidate
with, or merge with and into, any other Person (other than a
Subsidiary of the Corporation in a transaction which complies
with Section 11(o)), and the Corporation shall not be the
continuing or surviving corporation of such consolidation or
merger, (y) any Person (other than a Subsidiary of the
Corporation in a transaction which complies with Section 11(o))
shall consolidate with, or merge with or into, the Corporation,
and the Corporation shall be the continuing or surviving
corporation of such consolidation or merger, and, in connection
with such consolidation or merger, all or part of the outstanding
shares of Common Stock shall be changed into or exchanged for
stock or other securities of any other Person or cash or any
other property, or (z) the Corporation shall sell or otherwise
transfer (or one or more of its Subsidiaries shall sell or
otherwise transfer), in one transaction or a series of related
transactions, assets or earning power aggregating more than 50%
of the assets or earning power of the Corporation and its
Subsidiaries (taken as a whole) to any Person or Persons (other
than the Corporation or any Subsidiary of the Corporation in one
or more transactions each of which complies with Section 11(o)),
then, and in each such case, proper provisions shall be made so
that (i) each holder of a Right, except as provided in Section
7(e), shall thereafter have the right to receive, upon the
exercise thereof at the then current Purchase Price in accordance
with the terms of this Agreement, such number of validly
authorized and issued, fully paid, non-assessable and freely
tradable shares of Common Stock of the Principal Party (as such
term is hereinafter defined), not subject to any liens,
encumbrances, rights of first refusal or other adverse claims, as
shall be equal to the result obtained by (1) multiplying the then
current Purchase Price by the then number of one one-thousandths
of a share of Preferred Stock for which a Right was exercisable
immediately prior to the occurrence of such Section 11(a)(ii)
Event, and (2) dividing that product (which, following the first
occurrence of a Section 13 Event, shall be referred to as the
"Purchase Price" for each Right and for all purposes of this
Agreement) by 50% of the Current Market Price (determined
pursuant to Section 11(d)(i)) per share of the Common Stock of
such Principal Party on the date of consummation of such
Section 13 Event (or the fair market value on such date of other
securities or property of the Principal Party, as provided for
herein); provided, however, that the Purchase Price and the
number of shares of Common Stock of such Principal Party issuable
upon exercise of each Right shall be further adjusted as provided
in this Agreement to reflect any events occurring after the date
of the first occurrence of a Section 13 Event; (ii) such
Principal Party shall thereafter be liable for, and shall assume,
by virtue of such Section 13 Event, all the obligations and
duties of the Corporation pursuant to this Agreement; (iii) the
term "Corporation" shall thereafter be deemed to refer to such
Principal Party, it being specifically intended that the
provisions of Section 11 shall apply only to such Principal Party
following the first occurrence of a Section 13 Event; (iv) such
Principal Party shall take such steps (including, but not limited
to, the reservation of a sufficient number of shares of its
Common Stock) in connection with the consummation of any such
transaction as may be necessary to assure that the provisions
hereof shall thereafter be applicable, as nearly as reasonably
may be, in relation to its shares of Common Stock thereafter
deliverable upon the exercise of the Rights; provided, however,
that upon the subsequent occurrence of any merger, consolidation,
sale of all or substantially all assets, recapitalization,
reclassification of shares, reorganization or other extraordinary
transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a
Right and payment of the Purchase Price, such cash, shares,
rights, warrants and other property which such holder would have
been entitled to receive had he, at the time of such transaction,
owned the shares of Common Stock of the Principal Party
purchasable upon the exercise of a Right, and such Principal
Party shall take such steps (including, but not limited to,
reservation of shares of stock) as may be necessary to permit the
subsequent exercise of the Rights in accordance with the terms
hereof for such cash, shares, rights, warrants and other
property; and (v) the provisions of Section 11(a)(ii) shall be of
no effect following the first occurrence of any Section 13 Event.
(b) "Principal Party" shall mean:
(i) in the case of any transaction described in clause
(x) or (y) of the first sentence of Section 13(a), (A) the Person
that is the issuer of any securities into which shares of Common
Stock of the Corporation are converted in such merger or
consolidation, or, if there is more than one such issuer, the
issuer whose issued and outstanding Common Stock has the greatest
aggregate market value or (B) if no securities are so issued, (x)
the Person that is the other party to such merger or
consolidation and survives said merger or consolidation, or, if
there is more than one such Person, the Person whose issued and
outstanding Common Stock has the greatest aggregate market value
or (y) if the Person that is the other party to the merger or
consolidation does not survive the merger or consolidation, the
Person that does survive the merger or consolidation (including
the Corporation if it survives); and
(ii) in the case of any transaction described in clause
(z) of the first sentence of Section 13(a), the Person that is
the party receiving the greatest portion of the assets or earning
power transferred pursuant to such transaction or transactions,
or, if each Person that is a party to such transaction or
transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest
portion of the assets or earning power cannot be determined,
whichever of such Persons as is the issuer of Common Stock having
the greatest market value of shares outstanding;
provided, however, that in any such case, (l) if the Common Stock
of such Person is not at such time and has not been continuously
over the preceding twelve (12) month period registered under
Section 12 of the Exchange Act, and such Person is a direct or
indirect Subsidiary of another Person the Common Stock of which
is and has been so registered, "Principal Party" shall refer to
such other Person; and (2) if such Person is a Subsidiary,
directly or indirectly, of more than one Person, the Common
Stocks of two or more of which are and have been so registered,
"Principal Party" shall refer to whichever of such persons is the
issuer of the issued and outstanding Common Stock having the
greatest aggregate market value.
(c) The Corporation shall not consummate any such consolidation,
merger, sale or transfer unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which
have not been issued or reserved for issuance to permit the
exercise in full of the Rights in accordance with this Section 13
and unless prior thereto the Corporation 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, sale or transfer mentioned in paragraph (a) of this
Section 13, the Principal Party will:
(i) prepare and file a registration statement under
the Act, with respect to the Rights and the securities
purchasable upon exercise of the Rights on an appropriate form,
and will use its best efforts to cause such registration
statement to (A) become effective as soon as practicable after
such filing and (B) remain effective (with a prospectus at all
times meeting the requirements of the Act) until the Expiration
Date and similarly comply with applicable state securities laws;
(ii) will deliver to holders of the Rights historical
financial statements of the Principal Party and each of its
Affiliates which comply in all respects with the requirements for
registration on Form 10 (or any successor form) under the
Exchange Act;
(iii) use its best efforts, if the Common Stock of
the Principal Party shall become listed on a national securities
exchange, to list (or continue the listing of) the Rights and the
securities purchasable upon exercise of the Rights on such
securities exchange and, if the Common Stock of the Principal
Party shall not be listed on a national securities exchange, to
cause the Rights and the securities purchasable upon exercise of
the Rights to be reported by NASDAQ or such other system then in
use; and
(iv) obtain waivers of any rights of first refusal or
preemptive rights in respect of the shares of Common Stock of the
Principal Party subject to purchase upon exercise of outstanding
Rights.
The provisions of this Section 13 shall similarly apply to
successive mergers or consolidations or sales or transfers. In
the event that a Section 13 Event shall occur at any time after
the occurrence of a Section 11(a)(ii) Event, the Rights which
have not theretofore been exercised shall thereafter become
exercisable in the manner described in Section 13(a).
(d) Notwithstanding anything in this Agreement to the contrary,
Section 13 shall not be applicable to a transaction described in
subparagraphs (x) and (y) of Section 13(a) if (i) such
transaction is consummated with a Person or Persons who acquired
shares of Common Stock pursuant to a tender offer or exchange
offer for all outstanding shares of Common Stock which complies
with the provisions of Section 11(a)(ii) hereof (or a wholly
owned Subsidiary of any such Person or Persons), (ii) the price
per share of Common Stock offered in such transaction is not less
than the price per share of Common Stock paid to all holders of
shares of Common Stock whose shares were purchased pursuant to
such tender offer or exchange offer, and (iii) the form of
consideration being offered to the remaining holders of shares of
Common Stock pursuant to such transaction is the same as the form
of consideration paid pursuant to such tender offer or exchange
offer. Upon consummation of any such transaction contemplated by
this Section 13(d), all Rights hereunder shall expire.
14. Fractional Rights and Fractional Shares.
(a) The Corporation shall not be required to issue fractions of
Rights, except prior to the Distribution Date as provided in
Section 11(p), or to distribute Rights Certificates which
evidence fractional Rights. In lieu of such fractional Rights,
there shall be paid to the registered holders of the Rights
Certificates with regard to which such fractional Rights would
otherwise be issuable, an amount in cash equal to the same
fraction of the Current Market Value of a whole Right. For
purposes of this Section 14(a), the current market value of a
whole Right shall be the closing price of the Rights for the
Trading Day immediately prior to the date on which such
fractional Rights would have been otherwise issuable. The
closing price of the Rights for any day shall be the last sale
price, regular way, or, in case no such sale takes place on such
day, the average of the closing bid and asked prices, regular
way, in either case as reported in the principal consolidated
transaction reporting system with respect to securities listed or
admitted to trading on the New York Stock Exchange or, if the
Rights are not listed or admitted to trading on the New York
Stock Exchange, as reported in the principal consolidated
transaction reporting system with respect to securities listed on
the principal national securities exchange or the NASDAQ National
Market System on which the Rights are listed or admitted to
trading, or if the Rights are not listed or admitted to trading
on any national securities exchange or the NASDAQ National Market
System, the last quoted price or, if not so quoted, the average
of the high bid and low asked prices in the over-the-counter
market, as reported by NASDAQ or such other system then in use
or, if on any such date the Rights are not quoted by any such
organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the
Rights selected by the Board of Directors of the Corporation. If
on any such date no such market maker is making a market in the
Rights the fair value of the Rights on such date as determined in
good faith by the Board of Directors of the Corporation shall be
used.
(b) The Corporation shall not be required to issue fractions of
shares of Preferred Stock (other than fractions which are
integral multiples of one one-thousandth of a share of Preferred
Stock) upon exercise of the Rights or to distribute certificates
which evidence fractional shares of Preferred Stock (other than
fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock). In lieu of fractional shares of
Preferred Stock that are not integral multiples of one one-
thousandth of a share of Preferred Stock, the Corporation may pay
to the registered holders of Rights Certificates at the time such
Rights are exercised as herein provided an amount in cash equal
to the same fraction of the Current Market Value of one one-
thousandth of a share of Preferred Stock. For purposes of this
Section 14(b), the Current Market Value of one one-thousandth of
a share of Preferred Stock shall be one one-thousandth of the
closing price of a share of Preferred Stock (as determined
pursuant to Section 11(d)(ii)) for the Trading Day immediately
prior to the date of such exercise.
(c) Following the occurrence of a Triggering Event, the
Corporation shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute
certificates which evidence fractional shares of Common Stock.
In lieu of fractional shares of Common Stock, the Corporation may
pay to the registered holders of Rights Certificates at the time
such Rights are exercised as herein provided an amount in cash
equal to the same fraction of the Current Market Value of one (1)
share of Common Stock. For purposes of this Section 14(c), the
Current Market Value of one share of Common Stock shall be the
closing price of one share of Common Stock (as determined
pursuant to Section 11(d)(i)) for the Trading Day immediately
prior to the date of such exercise.
(d) The holder of a Right by the acceptance of the Rights
expressly waives his right to receive any fractional Rights or
any fractional shares upon exercise of a Right, except as
permitted by this Section 14.
15. Rights of Action.
All rights of action in respect of this Agreement, other than
rights of action vested in the Rights Agent pursuant to Section
18, are vested in the respective registered holders of the Rights
Certificates (and, prior to the Distribution Date, the registered
holders of the Common Stock); and any registered holder of any
Rights Certificate (or, prior to the Distribution Date, of the
Common Stock), without the consent of the Rights Agent or of the
holder of any other Rights Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf
and for his own benefit, enforce, and may institute and maintain
any suit, action or proceeding against the Corporation to
enforce, or otherwise act in respect of, his right to exercise
the Rights evidenced by such Rights Certificate in the manner
provided in such Rights Certificate and in this Agreement.
Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the
holders of Rights would not have an adequate remedy at law for
any breach of this Agreement and shall be entitled to specific
performance of the obligations hereunder and injunctive relief
against actual or threatened violations of the obligations
hereunder of any Person subject to this Agreement.
16. Agreement of Rights Holders.
Every holder of a Right by accepting the same consents and agrees
with the Corporation and the Rights Agent and with every other
holder of a Right that:
(a) prior to the Distribution Date, the Rights will be
transferable only in connection with the transfer of Common
Stock;
(b) after the Distribution Date, the Rights Certificates are
transferable only on the registry books of the Rights Agent if
surrendered at the office or offices of the Rights Agent
designated for such purposes, duly endorsed or accompanied by a
proper instrument of transfer and with the appropriate forms and
certificates fully executed;
(c) subject to Section 6(a) and Section 7(f), the Corporation
and the Rights Agent may deem and treat the person in whose name
a Rights Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the
absolute owner thereof and of the Rights evidenced thereby
(notwithstanding any notations of ownership or writing on the
Rights Certificates or the associated Common Stock certificate
made by anyone other than the Corporation or the Rights Agents)
for all purposes whatsoever, and neither the Corporation nor the
Rights Agent, subject to the last sentence of Section 7(e), shall
be required to be affected by any notice to the contrary; and
(d) notwithstanding anything in this Agreement to the contrary,
neither the Corporation nor the Rights Agent shall have any
liability to any holder of a Right or other Person as a result of
its inability to perform any of its obligations under this
Agreement by reason of any preliminary or permanent injunction or
other order, decree or ruling issued by a court of competent
jurisdiction or by a governmental, regulatory or administrative
agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental
authority, prohibiting or otherwise restraining performance of
such obligation; provided, however, the Corporation must use its
best efforts to have any such order, decree or ruling lifted or
otherwise overturned as soon as possible.
17. Rights Certificate Holder Not Deemed a
Stockholder.
No holder, as such, of any Rights Certificate shall be entitled
to vote, receive dividends or be deemed for any purposes the
holder of the number of one one-thousandths of a share of
Preferred Stock or any other securities of the Corporation which
may at any time be issuable on the exercise of the Rights
represented thereby, nor shall anything contained herein or in
any Rights Certificate be construed to confer upon the holder of
any Rights Certificate, as such, any of the rights of a
stockholder of the Corporation or any right to vote for the
election of directors or upon any matter submitted to
stockholders at any meeting thereof, or to give or withhold
consent to any corporate action, or to receive notice of meetings
or other actions affecting stockholders (except as provided in
Section 25), or to receive dividends or subscription rights, or
otherwise, until the Right or Rights evidenced by such Rights
Certificate shall have been exercised in accordance with the
provisions hereof.
18. Concerning the Rights Agent.
(a) The Corporation agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder as set
forth in a separately executed written fee agreement. The
Corporation also agrees to indemnify the Rights Agent for, and to
hold it harmless against, any loss, liability, or expense,
incurred without gross negligence or willful misconduct on the
part of the Rights Agent, for anything done or omitted by the
Rights Agent in connection with the acceptance and administration
of this Agreement, including the costs and expenses of defending
against any claim of liability in the premises.
(b) The Rights Agent shall be protected and shall incur no
liability for or in respect of any action taken, suffered or
omitted by it in connection with its administration of this
Agreement in reliance upon any Rights Certificate or certificate
for Common Stock or for other securities of the Corporation,
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.
19. Merger or Consolidation or Change of Name of
Rights Agent.
(a) Any corporation into which the Rights Agent or any successor
Rights Agent may be merged or with which it may be consolidated,
or any corporation resulting from any merger or consolidation to
which the Rights Agent or any successor Rights Agent shall be a
party, or any corporation succeeding to the corporate trust or
stock transfer business of the Rights Agent or any successor
Rights Agent, shall be the successor to the Rights Agent under
this Agreement without the execution or filing of any paper or
any further act on the part of any of the parties hereto;
provided, however, that such corporation would be eligible for
appointment as a successor Rights Agent under the provisions of
Section 21. In case at the time such successor Rights Agent
shall succeed to the agency created by this Agreement, any of the
Rights Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the
countersignature of a predecessor Rights Agent and deliver such
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
any successor Rights Agent may countersign such Rights
Certificates either in the name of the predecessor or in the name
of the successor Rights Agent; and in all such cases such Rights
Certificates shall have the full force provided in the Rights
Certificates and in this Agreement.
(b) In case at any time the name of the Rights Agent shall be
changed and at such time any of the Rights Certificates shall
have been countersigned but not delivered, the Rights Agent may
adopt the countersignature under its prior name and deliver
Rights Certificates so countersigned; and in case at that time
any of the Rights Certificates shall not have been countersigned,
the Rights Agent may countersign such Rights Certificates either
in its prior name or in its changed name; and in all such cases
such Rights Certificates shall have the full force provided in
the Rights Certificates and in this Agreement.
20. Duties of Rights Agent.
The Rights Agent undertakes the duties and obligations imposed by
this Agreement upon the following terms and conditions, by all of
which the Corporation and the holders of Rights Certificates, by
their acceptance thereof, shall be bound:
(a) The Rights Agent may consult with legal counsel (who may be
legal counsel for the Corporation), and the opinion of such
counsel shall be full and complete authorization and protection
to the Rights Agent as to any action taken or omitted by it in
good faith and in accordance with such opinion.
(b) Whenever in the performance of its duties under this
Agreement the Rights Agent shall deem it necessary or desirable
that any fact or matter (including, without limitation, the
identity of any Acquiring Person and the determination of Current
Market Price) be proved or established by the Corporation prior
to taking or suffering any action hereunder, such fact or matter
(unless other evidence in respect thereof be herein specifically
prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board,
the Chief Executive Officer, the President, any Vice President,
the Treasurer, any Assistant Treasurer, the Secretary or any
Assistant Secretary of the Corporation and delivered to the
Rights Agent; and such certificate shall be full authorization to
the Rights Agent for any action taken or suffered in good faith
by it under the provisions of this Agreement in reliance upon
such certificate.
(c) The Rights Agent shall be liable hereunder only for its own
gross negligence or willful misconduct.
(d) The Rights Agent shall not be liable for or by reason of the
statements of fact or recitals contained in this Agreement or in
the Rights Certificates or be required to verify the same (except
as to its countersignature on such Rights Certificates), but all
such statements and recitals are and shall be deemed to have been
made by the Corporation only.
(e) The Rights Agent shall not be under any responsibility in
respect of the validity of this Agreement or the execution and
delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution of any Rights
Certificate (except its countersignature thereof); nor shall it
be responsible for any adjustment required under the provisions
of Section 11 or Section 13 or responsible for the manner, method
or amount of any such adjustment or the ascertaining of the
existence of facts that would require any such adjustment (except
with respect to the exercise of Rights evidenced by Rights
Certificates after receipt of the certificate described in
Section 12 setting forth any such adjustment); nor shall it by
any act hereunder be deemed to make any representation or
warranty as to the authorization or reservation of any shares of
Common Stock or Preferred Stock to be issued pursuant to this
Agreement or any Rights Certificates or as to whether any shares
of Common Stock or Preferred Stock will, when so issued, be
validly authorized and issued, fully paid and nonassessable.
(f) The Corporation agrees that it will perform, execute,
acknowledge and deliver or cause to be performed, executed,
acknowledged and delivered all such further and other acts,
instruments and assurances as may reasonably be required by the
Rights Agent for the carrying out or performing by the Rights
Agent of the provisions of this Agreement.
(g) The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties
hereunder from the Chairman of the Board or the President of the
Corporation or any other officer of the Corporation designated to
the Rights Agent in writing by the Chairman of the Board, the
Chief Executive Officer, or the President of the Corporation, and
to apply to such officers for advice or instructions in
connection with its duties, and it shall not be liable for any
action taken or suffered to be taken by it in good faith in
accordance with instructions of any such officer.
(h) The Rights Agent and any stockholder, director, officer or
employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Corporation or become
pecuniarily interested in any transaction in which the
Corporation may be interested, or contract with or lend money to
the Corporation or otherwise act as fully and freely as though it
were not Rights Agent under this Agreement. Nothing herein shall
preclude the Rights Agent from acting in any other capacity for
the Corporation or for any other legal entity.
(i) The Rights Agent may execute and exercise any of the rights
or powers hereby vested in it or perform any duty hereunder
either itself or by or through its attorneys or agents, and the
Rights Agent shall not be answerable or accountable for any act,
default, neglect or misconduct or any such attorneys or agents or
for any loss to the Corporation resulting from any such act,
default, neglect or misconduct; provided, however, reasonable
care was exercised in the selection and continued employment
thereof.
(j) No provision of this Agreement shall require the Rights
Agent to expend or risk its own funds or otherwise incur any
financial liability in the performance of any of its duties
hereunder or in the exercise of its rights if there shall be
reasonable grounds for believing that repayment of such funds or
adequate indemnification against such risk or liability is not
reasonably assured to it.
(k) If, with respect to any Rights Certificate surrendered to
the Rights Agent for exercise or transfer, the certificate
attached to the form of assignment or form of election to
purchase as the case may be, has either not been completed or
indicates an affirmative response to clause 1 and/or 2 thereof,
the Rights Agent shall not take any further action with respect
to such requested exercise of transfer without first consulting
with the Corporation.
21. Change of Rights Agent.
The Rights Agent or any successor Rights Agent may resign and be
discharged from its duties under this Agreement upon thirty (30)
days' notice in writing mailed to the Corporation, and to each
transfer agent of the Common Stock and Preferred Stock by
registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. The Corporation may remove the
Rights Agent or any successor Rights Agent (with or without
cause) upon thirty (30) days' notice in writing, mailed to the
Rights Agent or successor Rights Agent, as the case may be, and
to each transfer agent of the Common Stock and Preferred Stock,
by registered or certified mail, and to the holders of the Rights
Certificates by first-class mail. If the Rights Agent shall
resign or be removed or shall otherwise become incapable of
acting, the Corporation shall appoint a successor to the Rights
Agent. If the Corporation shall fail to make such appointment
within a period of thirty (30) days after giving notice of such
removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated
Rights Agent or by the holder of a Rights Certificate (who shall,
with such notice, submit his Rights Certificate for inspection by
the Corporation), then the incumbent Rights Agent or any
registered holder of any Rights Certificate may apply to any
court of competent jurisdiction for the appointment of a new
Rights Agent. Any successor Rights Agent, whether appointed by
the Corporation or by such a court, shall be a corporation
organized and doing business under the laws of the United States
or of any other state of the United States in good standing,
which is authorized under such laws to exercise corporate trust
or stock transfer powers and is subject to supervision or
examination by federal or state authority and which has at the
time of its appointment as Rights Agent a combined capital and
surplus deemed by the Corporation's Board of Directors to be
reasonable under the circumstances. After appointment, the
successor Rights Agent shall be vested with the same powers,
rights, duties and responsibilities as if it had been originally
named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the
successor Rights Agent any property at the time held by it
hereunder, and execute and deliver any further assurance,
conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment, the Corporation
shall file notice thereof in writing with the predecessor Rights
Agent and each transfer agent of the Common Stock and the
Preferred Stock, and mail a notice thereof in writing to the
registered holders of the Rights Certificates. Failure to give
any notice provided for in this Section 21, however, or any
defect therein, shall not affect the legality or validity of the
resignation or removal of the Rights Agent or the appointment of
the successor Rights Agents as the case may be.
22. Issuance of New Rights Certificates.
Notwithstanding any of the provisions of this Agreement or of the
Rights to the contrary, the Corporation may, at its option, issue
new Rights Certificates evidencing Rights in such form as may be
approved by its Board of Directors to reflect any adjustment or
change in the Purchase Price and the number or kind or class of
shares or other securities or property purchasable under the
Rights Certificates made in accordance with the provisions of
this Agreement. In addition, in connection with the issuance or
sale of shares of Common Stock following the Distribution Date
and prior to the redemption or expiration of the Rights, the
Corporation (a) shall, with respect to shares of Common Stock so
issued or sold pursuant to the exercise of stock options or under
any employee plan or arrangement, or upon the exercise,
conversion or exchange of securities hereinafter issued by the
Corporation, and (b) may, in any other case, if deemed necessary
or appropriate by the Board of Directors of the Corporation,
issue Rights Certificates representing the appropriate number of
Rights in connection with such issuance or sale; provided,
however, that (i) no such Rights Certificate shall be issued if,
and to the extent that, the Corporation shall be advised by
counsel that such issuance would create a significant risk of
material adverse tax consequences to the Corporation or the
Person to whom such Rights Certificate would be issued, and
(ii) no such Rights Certificate shall be issued if, and to the
extent that, appropriate adjustment shall otherwise have been
made in lieu of the issuance thereof.
23. Redemption and Termination.
(a) The Board of Directors of the Corporation may, at its
option, at any time prior to the earlier of (i) the Close of
Business on the tenth (10th) day following the Stock Acquisition
Date (or, if the Stock Acquisition Date shall have occurred prior
to the Record Date, the Close of Business on the tenth (10th) day
following the Record Date), subject to extension as provided in
Section 27 or (ii) the Close of Business on the Final Expiration
Date, redeem all but not less than all the then outstanding
Rights at a redemption price of $.001 per Right, as such amount
may be appropriately adjusted to reflect any stock split, stock
dividend or similar transaction occurring after the date hereof
(such redemption price being hereinafter referred to as the
"Redemption Price"). Notwithstanding anything contained in this
Agreement to the contrary, the Rights shall not be exercisable
after the occurrence of an event described in Section 11(a)(ii)
until such time as the Corporation's right of redemption
hereunder has expired. The Corporation may, at its option, pay
the Redemption Price in cash, shares of Common Stock (based on
the Current Market Price, as defined in Section 11(d)(i), of the
Common Stock at the time of redemption) or any other form of
consideration deemed appropriate by the Board of Directors. Such
redemption of the Rights by the Corporation may be made effective
at such time, on such basis and with such conditions as the Board
of Directors in its sole discretion may establish.
(b) Immediately upon the action of the Board of Directors of the
Corporation ordering the redemption of the Rights, and without
any further action and without any notice, the right to exercise
the Rights will terminate and the only right thereafter of the
holders of Rights shall be to receive the Redemption Price for
each Right so held, without any interest thereon. Promptly after
the action of the Board of Directors ordering the redemption of
the Rights, the Corporation shall give notice of such redemption
to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at each
holder's last address as it appears upon the registry books of
the Rights Agent or, prior to the Distribution Date, on the
registry books of the Transfer Agent for the Common Stock. Any
notice which is mailed in the manner herein provided shall be
deemed given, whether or not the holder receives the notice.
Each such notice of redemption will state the method by which the
payment of the Redemption Price will be made. The failure to
give notice required by this Section 23(b) or any defect therein
shall not affect the legality or validity of the action taken by
the Corporation.
24. Exchange.
(a) Subject to applicable laws, rules and regulations, and
subject to subsection (c) below, at any time after the occurrence
of a Triggering Event, the Board of Directors of the Corporation
may cause the Corporation to exchange all or part of the then
outstanding and exercisable Rights (which shall not include
Rights that have become void pursuant to the provisions of
Section 7(e)) for Common Stock at an exchange ratio of one share
of Common Stock per Right, appropriately adjusted to reflect any
stock split, stock dividend or similar transaction occurring
after the date hereof (such exchange ratio being hereinafter
referred to as the "Ratio of Exchange"). Notwithstanding the
foregoing, the Board of Directors shall not be empowered to
effect such exchange at any time after any Person (other than an
Exempt Person), together with all Affiliates and Associates of
such Person, becomes the Beneficial Owner of 50% or more of the
Common Stock then outstanding.
(b) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to subsection (a) of
this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the
only right thereafter of a holder of such Rights shall be to
receive that number of shares of Common Stock equal to the number
of such Rights held by such holder multiplied by the Ratio of
Exchange. The Corporation shall give public notice of any such
exchange; provided, however, that the failure to give, or any
defect in, such notice shall not affect the validity of such
exchange. The Corporation shall mail a notice of any such
exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the Rights
Agent. Any notice which is mailed in the manner herein provided
shall be deemed given, whether or not the holder receives the
notice. Each such notice of exchange will state the method by
which the exchange of the Common Stock for Rights will be
effected and, in the event of any partial exchange, the number of
Rights that will be exchanged. Any partial exchange shall be
effected pro rata based on the number of Rights (other than
Rights which have become void pursuant to the provisions of
Section 7(e)) held by each holder of Rights.
(c) In the event that there shall not be sufficient Common Stock
authorized but unissued to permit any exchange of Rights as
contemplated in accordance with Section 24(a), the Corporation
shall either take such action as may be necessary to authorize
additional shares of Common Stock for issuance upon exchange of
the Rights or alternatively, at the option of the Board of
Directors, with respect to each Right (i) pay cash in an amount
equal to the Current Value (as hereinafter defined), in lieu of
issuing Common Stock in exchange therefor, or (ii) issue debt or
equity securities or a combination thereof, having a value equal
to the Current Value, in lieu of issuing Common Stock in exchange
for each such Right, where the value of such securities shall be
determined by a nationally recognized investment banking firm
selected by the Board of Directors, or (iii) deliver any
combination of cash, property, Common Stock and/or other
securities having a value equal to the Current Value in exchange
for each Right. For purposes of this Section 24(c) only, the
"Current Value" shall mean the product of the current per share
market price of Common Stock (determined pursuant to
Section 11(d) on the date of the occurrence of the event
described above in subparagraph (a)) multiplied by the number of
shares of Common Stock for which the Right otherwise would be
exchangeable if there were sufficient shares available. To the
extent that the Corporation determines that some action need be
taken pursuant to clauses (i), (ii), or (iii) of this
Section 24(c), the Board of Directors may temporarily suspend the
exercisability of the Rights for a period of up to sixty (60)
days following the date on which the event described in
Section 24(a) shall have occurred, in order to seek any
authorization of additional Common Stock and/or to determine the
appropriate form of distribution to be made pursuant to the above
provision and to determine the value thereof. In the event of
any such suspension, the Corporation shall issue a public
announcement stating that the exercisability of the Rights has
been temporarily suspended.
(d) The Corporation shall not be required to issue fractions of
Common Stock or to distribute certificates that evidence
fractional Common Stock. In lieu of such fractional Common
Stock, there shall be paid to the registered holders of the
Rights Certificates with regard to which such fractional Common
Stock would otherwise be issuable, an amount in cash equal to the
same fraction of the current per share market value of a whole
Common Stock (as determined pursuant to the second sentence of
Section 11(d)).
(e) The Corporation may, at the option of the Board of
Directors, at any time before any Person has become an Acquiring
Person, exchange all or part of the then outstanding Rights for
rights of substantially equivalent value, as determined
reasonably and with good faith by the Board of Directors based
upon the advice of one or more nationally recognized investment
banking firms.
(f) Immediately upon the action of the Board of Directors
ordering the exchange of any Rights pursuant to subsection (e) of
this Section 24 and without any further action and without any
notice, the right to exercise such Rights shall terminate and the
only right thereafter of a holder of such Rights shall be to
receive that number of rights in exchange therefore as has been
determined by the Board of Directors in accordance with
subsection (e) above. The Corporation shall give public notice
of any such exchange; provided, however, that the failure to
give, or any defect in, such notice shall not affect the validity
of such exchange. The Corporation shall mail a notice of any
such exchange to all of the holders of such Rights at their last
addresses as they appear upon the registry books of the transfer
agent for the Common Stock of the Corporation. Any notice which
is mailed in the manner herein provided shall be deemed given,
whether or not the holder receives the notice. Each such notice
of exchange will state the method by which the exchange of the
Rights will be effected.
25. Notice of Certain Events.
(a) In case the Corporation shall propose, at any time after the
Distribution Date, (i) to pay any dividend payable in stock of
any class to the holders of Preferred Stock or to make any other
distribution to the holders of Preferred Stock (other than a cash
dividend out of earnings or retained earnings of the
Corporation), or (ii) to offer to the holders of Preferred Stock
rights or warrants to subscribe for or to purchase any additional
shares of Preferred Stock or shares of stock of any class or any
other securities, rights or options, or (iii) to effect any
reclassification of its Preferred Stock (other than a
reclassification involving only the subdivision of outstanding
shares of Preferred Stock), or (iv) to effect any consolidation
or merger into or with any other Person (other than a Subsidiary
of the Corporation in a transaction which complies with Section
11(o)), or to effect any sale or other transfer (or to permit one
or more of its Subsidiaries to effect any sale or other
transfer), in one transaction or a series of related
transactions, of more than 50% of the assets or earning power of
the Corporation and its Subsidiaries (taken as a whole) to any
other Person or Persons (other than the Corporation and/or any of
its Subsidiaries in one or more transactions each of which
complies with Section 11(o)), or (v) to effect the liquidation,
dissolution or winding up of the Corporation, then, in each such
case, the Corporation shall give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 26, a notice of such proposed action, which shall specify
the record date for the purposes of such stock dividend,
distribution of rights or warrants, or the date on which such
reclassification, consolidation, merger, sale, transfer,
liquidation, dissolution, or winding up is to take place and the
date of participation therein by the holders of the shares of
Preferred Stock, if any such date is to be fixed, and such notice
shall be so given in the case of any action covered by clause (i)
or (ii) above at least ten (10) days prior to the record date for
determining holders of the shares of Preferred Stock for purposes
of such action, and in the case of any such other action, at
least ten (10) days prior to the date of the taking of such
proposed action or the date of participation therein by the
holders of the shares of Preferred Stock whichever shall be the
earlier. The failure to give notice required by this Section 25
or any defect therein shall not affect the legality or validity
of the action taken by the Corporation or the vote upon any such
action.
(b) In case any of the events set forth in Section 11(a)(ii)
shall occur, then, in any such case, (i) the Corporation shall as
soon as practicable thereafter give to each holder of a Rights
Certificate, to the extent feasible and in accordance with
Section 26, 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 Preferred Stock shall be deemed thereafter
to refer to Common Stock and/or, if appropriate, other
securities.
26. Notices.
Notices or demands authorized by this Agreement to be given or
made by the Rights Agent or by the holder of any Rights
Certificate to or on the Corporation 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:
Atlantic Coast Airlines Holdings, Inc.
000-X Xxxx Xxxx
Xxxxxx, XX 00000
Attention: Chief Financial Officer
Subject to the provisions of Section 21, any notice or demand
authorized by this Agreement to be given or made by the
Corporation or by the holder of any Rights Certificate to or on
the Rights Agent shall be sufficiently given or made if sent by
first-class mail, postage prepaid, addressed (until another
address is filed in writing with the Corporation) as follows:
Continental Stock Transfer & Trust Company
0 Xxxxxxxx
Xxx Xxxx, XX 00000
Attention: Client Department
Notices or demands authorized by this Agreement to be given or
made by the Corporation or the Rights Agent to the holder of any
Rights Certificate (or, if prior to the Distribution Date, to the
holder of certificates representing shares of Common Stock) shall
be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such
holder as shown on the registry books of the Transfer Agent.
27. Supplements and Amendments.
Prior to the Distribution Date and subject to the penultimate
sentence of this Section 27, the Board of Directors of the
Corporation may, in its sole and absolute discretion and the
Rights Agent shall, if the Board of Directors so directs,
supplement or amend any provision of this Agreement without the
approval of any holders of certificates representing shares of
Common Stock, whether or not such supplement or amendment is
adverse to any holders of Rights. From and after the
Distribution Date, and subject to the penultimate sentence of
this Section 27, the Board of Directors may, and the Rights Agent
shall, if the Board of Directors so directs, supplement or amend
this Agreement without the approval of any holders of Rights
Certificates in order to (i) cure any ambiguity, (ii) correct or
supplement any provision contained herein which may be defective
or inconsistent with any other provisions hereunder,
(iii) shorten or lengthen any time period hereunder, or
(iv) otherwise change or supplement the provisions hereunder in
any manner which the Board of Directors may deem necessary or
desirable and which shall not materially and adversely affect the
interests of the holders of Rights Certificates (other than an
Acquiring Person or an Affiliate or Associate of any such
Person); provided, however, this Agreement may not be
supplemented or amended after the Distribution Date to (A) make
the Rights again redeemable after the Rights have ceased to be
redeemable, or (B) change any other time period unless such
change is for the purpose of protecting, enhancing or clarifying
the rights of, and/or the benefits to the holders of Rights
(other than any Acquiring Person and its Associates or
Affiliates). Upon the delivery of a certificate from an
appropriate officer of the Corporation which states that the
proposed supplement or amendment is in compliance with the terms
of this Section 27, the Rights Agent shall execute such
supplement or amendment. Notwithstanding anything contained in
this Agreement to the contrary, no supplement or amendment shall
be made which changes the Redemption Price. Prior to the
Distribution Date, the interests of the holders of Rights shall
be deemed coincident with the interests of the holders of Common
Stock.
28. Successors.
All the covenants and provisions of this Agreement by or for the
benefit of the Corporation or the Rights Agent shall bind and
inure to the benefit of their respective successors and assigns
hereunder.
29. Determination and Actions by the Board of
Directors, etc.
For all purposes of this Agreement, any calculation of the number
of shares of Common Stock outstanding at any particular time,
including for purposes of determining the particular percentage
of such outstanding shares of Common Stock of which any Person is
the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) of the General Rules and
Regulations under the Exchange Act. The Board of Directors of
the Corporation shall have the exclusive power and authority to
administer this Agreement and to exercise all rights and powers
specifically granted to the Board of Directors of the Corporation
or to the Corporation, or as may be necessary or advisable in the
administration of this Agreement, including, without limitation,
the right and power to (i) interpret the provisions of this
Agreement, and (ii) make all determinations deemed necessary or
advisable for the administration of this Agreement (including,
but not limited to, a determination to redeem or not redeem the
Rights, or to amend this Agreement). All such actions,
calculations, interpretations and determinations (including, for
purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board of Directors of
the Corporation in good faith, shall (x) be final, conclusive and
binding on the Corporation, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject any member of
the Board of Directors to any liability to the holders of the
Rights or to any other Person.
30. Benefits of this Agreement.
Nothing in this Agreement shall be construed to give to any
Person other than the Corporation, the Rights Agent and the
registered holders of the Rights Certificates (and, prior to the
Distribution Date, registered holders of the Common Stock) any
legal or equitable right, remedy or claim under this Agreement;
but this Agreement shall be for the sole and exclusive benefit of
the Corporation, the Rights Agent and the registered holders of
the Rights Certificates (and, prior to the Distribution Date,
registered holders of the Common Stock).
31. Severability.
If any term, provision, covenant or restriction of this Agreement
is held by a court of competent jurisdiction or other authority
to be invalid, void or unenforceable, the remainder of the terms,
provisions, covenants and restrictions of this Agreement shall
remain in full force and effect and shall in no way be affected,
impaired or invalidated; provided, however, that notwithstanding
anything in this Agreement to the contrary, if any such term,
provision, covenant or restriction is held by such court or
authority to be invalid, void or unenforceable and the Board of
Directors of the Corporation 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, if lapsed, shall
be reinstated and shall not expire until the Close of Business on
the tenth (10th) Business Day following the date of such
determination by the Board of Directors of the Corporation.
32. Governing Law.
This Agreement, each Right and each Rights Certificate issued
hereunder shall be deemed to be a contract made under the laws of
the State of Delaware and for all purposes shall be governed by
and construed in accordance with the laws of such State
applicable to contracts made and to be performed entirely within
such State.
33. Counterparts.
This Agreement may be executed in any number of counterparts and
each of such counterparts shall for all purposes be deemed to be
an original, and all such counterparts shall together constitute
but one and the same instrument.
34. Descriptive Headings; References.
Descriptive headings of the several Sections of this Agreement
are inserted for convenience only and shall not control or affect
the meaning or construction of any of the provisions hereof.
References herein to Sections and Exhibits shall, unless
otherwise specified, be to the referenced section or exhibit
hereof or hereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be duly executed and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first
above written.
The "Corporation":
ATLANTIC COAST AIRLINES HOLDINGS, INC.
By:
Name: Xxxx X. Xxxx
Its: Executive Vice
President, Chief Financial
Officer, Treasurer and
Assistant Secretary
The "Rights Agent":
CONTINENTAL STOCK TRANSFER & TRUST
COMPANY
By:
Name: Xxxxxxx X. Xxxxxxxxx
Its: Vice President
EXHIBIT A
FORM OF CERTIFICATE OF DESIGNATION, PREFERENCES AND
RIGHTS OF SERIES B JUNIOR PARTICIPATING PREFERRED STOCK
OF
ATLANTIC COAST AIRLINES HOLDINGS, INC.
The undersigned, Xxxx X. Xxxx, the Executive Vice President,
Chief Financial Officer, Treasurer and Assistant Secretary of
Atlantic Coast Airlines Holdings, Inc., a Delaware corporation
(the "Corporation"), does hereby certify that:
FIRST: Pursuant to the authority conferred upon the
Corporation's Board of Directors by the Amended and Restated
Certificate of Incorporation of the Corporation and
Section 151(g) of the Delaware General Corporation Law, on
December 16, 1998, the Corporation's Board of Directors adopted
the following resolution authorizing the issuance of the
Corporation's Series B Junior Participating Preferred Stock, par
value $0.02, which resolution remains in full force and effect.
"RESOLVED, that pursuant to the authority vested in this
Board by the Corporation's Amended and Restated Certificate of
Incorporation, this Board hereby establishes a series of
preferred stock of the Corporation from the Corporation's
authorized class of 5,000,000 shares of $0.02 par value preferred
shares, such series to consist of 50,000 shares, and does hereby
fix and state the voting rights, designation, powers, preferences
and relative participating, optional or other special rights and
the qualifications, limitations or restrictions thereof, as
follows:
1. Designation and Amount. The shares of such series
will be designated as "Series B Junior Participating
Preferred Stock" and the number of shares constituting such
series will be 50,000. Such number of shares may be
increased or decreased by resolution of this Board;
provided, that no decrease will reduce the number of shares
of Series B Junior Participating 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 or warrants or upon the
conversion of any outstanding securities issued by the
Corporation convertible into Series B Junior Participating
Preferred Stock.
2. Dividends and Distributions.
(a) Subject to the prior and superior rights of the
holders of any shares of any series of Preferred Stock
ranking prior and superior to the shares of Series B Junior
Participating Preferred Stock with respect to dividends, the
holders of shares of Series B Junior Participating Preferred
Stock will be entitled to receive, when, as and if declared
by this Board out of funds legally available for the
purpose, quarterly dividends payable in cash on the 15th day
of January, April, July and October of each year (each, 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 B Junior
Participating Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of
(a) $0.25 or (b) subject to the provision for adjustment
hereinafter set forth, 1,000 times the aggregate per share
amount of all cash dividends, and 1,000 times the aggregate
per share amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the outstanding
shares of Common Stock (by reclassification or otherwise),
declared on the common stock, par value $0.02 per share, of
the Corporation (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 B Junior Participating Preferred Stock. In the event
the Corporation at any time after January 29, 1999 (the
"Rights Declaration Date") (i) declares any dividend on
Common Stock payable in shares of Common Stock,
(ii) subdivides the outstanding Common Stock or
(iii) combines the outstanding Common Stock into a smaller
number of shares, then in each such case the amount to which
holders of shares of Series B Junior Participating Preferred
Stock were entitled immediately prior to such event under
clause (b) of the preceding sentence will be adjusted by
multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
(b) The Corporation will declare a dividend or
distribution on the Series B Junior Participating Preferred
Stock as provided in paragraph (a) above as a condition to
declaration of a dividend or distribution on the Common
Stock (other than a dividend payable in shares of Common
Stock); provided that, in the event that no dividend or
distribution has been declared on the Common Stock during
the period between any Quarterly Dividend Payment Date, a
dividend of $0.25 per share on the Series B Junior
Participating Preferred Stock will nevertheless be payable
on such subsequent Quarterly Dividend Payment Date.
(c) Dividends will begin to accrue and be cumulative
on outstanding shares of Series B Junior Participating
Preferred Stock from the Quarterly Dividend Payment Date
next preceding the date of issue of such shares of Series B
Junior Participating Preferred Stock, 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 will 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 B Junior Participating Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such
dividends will begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid
dividends will not bear interest. Dividends paid on the
shares of Series B Junior Participating Preferred Stock in
an amount less than the total amount of such dividends at
the time accrued and payable on such shares will be
allocated pro rata on a share-by-share basis among all such
shares at the time outstanding. This Board may fix a record
date for the determination of holders of shares of Series B
Junior Participating Preferred Stock entitled to receive
payment of a dividend or distribution declared thereon,
which record date will be no more than 30 days prior to the
date fixed for the payment thereof.
3. Voting Rights. The holders of shares of Series B
Junior Participating Preferred Stock will have the following
voting rights:
(a) Subject to the provision for adjustment
hereinafter set forth, each share of Series B Junior
Participating Preferred Stock will entitle the holder
thereof to 1,000 votes on all matters submitted to a vote of
the stockholders of the Corporation. In the event the
Corporation at any time after the Rights Declaration Date
(i) declares any dividend on Common Stock payable in shares
of Common Stock, (ii) subdivides the outstanding Common
Stock or (iii) combines the outstanding Common Stock into a
smaller number of shares, then in each case the number of
votes per share to which holders of shares of Series B
Junior Participating Preferred Stock were entitled
immediately prior to such event will 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 or by law,
holders of Series B Junior Participating Preferred Stock
will have no special voting rights and the holders of shares
of Series B Junior Participating Preferred Stock and the
holders of shares of Common Stock will vote together as one
class on all matters submitted to a vote of stockholders of
the Corporation.
4. Certain Restrictions.
(a) Whenever quarterly dividends or other dividends or
distributions payable on the Series B Junior Participating
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 B Junior Participating Preferred Stock outstanding
have been paid in full, the Corporation will not:
(i) declare or pay dividends on, make any other
distribution on, or redeem or purchase or otherwise
acquire for consideration any shares of stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Junior
Participating Preferred Stock;
(ii) declare or pay dividends on or make any other
distributions on any shares of stock ranking on a
parity (either as to dividends or upon liquidation,
dissolution or winding up) with the Series B Junior
Participating Preferred Stock, except dividends paid
ratably on the Series B Junior Participating Preferred
Stock and all such parity stock on which dividends are
payable or in arrears in proportion to the total
amounts to which the holders of all such shares are
then entitled;
(iii) redeem or purchase or otherwise acquire
for consideration any shares of any stock ranking
junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Junior
Participating 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 B
Junior Participating Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series B Junior
Participating Preferred Stock, or any shares of stock
ranking on a parity with the Series B Junior
Participating Preferred Stock, except (i) 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 B Junior
Participating Preferred Stock, or (ii) in accordance
with a purchase offer made in writing or by publication
(as determined by this Board) to all holders of such
shares upon such terms as this Board, after
consideration of the respective annual dividend rates
and other relative rights and preferences of the
respective series and classes, determines in good faith
will result in fair and equitable treatment among the
respective series or classes.
(b) The Corporation will 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.
5. Reacquired Shares. Any shares of Series B Junior
Participating Preferred Stock purchased or otherwise
acquired by the Corporation in any manner whatsoever will be
retired and canceled promptly after the acquisition thereof.
All such shares will upon their cancellation become
authorized but unissued shares of Preferred Stock and may be
reissued as Series B Junior Participating Preferred Stock or
as part of a new series of Preferred Stock to be created by
resolution or resolutions of this Board, subject to the
conditions and restrictions on issuance set forth herein.
6. Liquidation, Dissolution or Winding Up.
(a) Upon any liquidation (voluntary or otherwise),
dissolution or winding up of the Corporation, no
distribution will be made to the holders of shares of stock
ranking junior (either as to dividends or upon liquidation,
dissolution or winding up) to the Series B Junior
Participating Preferred Stock unless, prior thereto, the
holders of shares of Series B Junior Participating Preferred
Stock will have received $1,000 per share, plus an amount
equal to accrued and unpaid dividends and distributions
thereon, whether or not declared, to the date of such
payment (the "Series B Liquidation Preference"). Following
the payment of the full amount of the Series B Liquidation
Preference, no additional distributions will be made to the
holders of shares of Series B Junior Participating Preferred
Stock unless, prior thereto, the holders of shares of Common
Stock will have received an amount per share (the "Common
Adjustment") equal to the quotient obtained by dividing
(i) the Series B Liquidation Preference by (ii) 1,000 (as
appropriately adjusted as set forth in subparagraph (c)
below to reflect such events as stock splits, stock
dividends and recapitalizations with respect to the Common
Stock) (such number in clause (ii), the "Adjustment
Number"). Following the payment of the full amount of the
Series B Liquidation Preference and the Common Adjustment in
respect of all outstanding shares of Series B Junior
Participating Preferred Stock and Common Stock,
respectively, holders of Series B Junior Participating
Preferred Stock and holders of shares of Common Stock will
receive their ratable and proportionate share of remaining
assets to be distributed in the ratio of the Adjustment
Number to one (1) with respect to such Preferred Stock and
Common Stock, on a per share basis, respectively.
(b) In the event, however, that there are not sufficient
assets available to permit payment in full of the Series B
Liquidation Preference and the liquidation preferences of all
other series of Preferred Stock, if any, which rank on a parity
with the Series B Junior Participating Preferred Stock, then such
remaining assets will be distributed ratably to the holders of
such parity shares in proportion to their respective liquidation
preferences. In the event that there are not sufficient assets
available to permit payment in full of the Common Adjustment,
then such remaining assets will be distributed ratably to the
holders of Common Stock.
(c) In the event the Corporation at any time after the
Rights Declaration Date (i) declares any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivides the
outstanding Common Stock or (iii) combines the outstanding
Common Stock into a smaller number of shares, then in each
such case the Adjustment Number in effect immediately prior
to such event will be adjusted by multiplying such
Adjustment Number by a fraction, the numerator of which is
the number of shares of Common Stock outstanding immediately
after such event and the denominator of which is the number
of shares of Common Stock that were outstanding immediately
prior to such event.
7. Consolidation, Merger, etc. If the Corporation
enters into any consolidation, merger, combination or other
transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities,
cash and/or any other property, then in any such case the
shares of Series B Junior Participating Preferred Stock will
at the same time be similarly exchanged or changed in an
amount per share (subject to the provision for adjustment
hereinafter set forth) equal to 1,000 times the aggregate
amount of stock, securities, cash and/or any other property
(payable in kind), as the case may be, into which or for
which each share of Common Stock is changed or exchanged.
In the event the Corporation at any time after the Rights
Declaration Date (i) declares any dividend on Common Stock
payable in shares of Common Stock, (ii) subdivides the
outstanding Common Stock or (iii) combines the outstanding
Common Stock into a smaller number of shares, then in each
such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series B
Junior Participating Preferred Stock will be adjusted by
multiplying such amount by a fraction, the numerator of
which is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
8. No Redemption. The shares of Series B Junior
Participating Preferred Stock will not be redeemable.
9. Ranking. The Series B Junior Participating
Preferred Stock will rank junior to all other series of the
Corporation's preferred stock, if any, as to the payment of
dividends and the distribution of assets, unless the terms
of any such series provide otherwise.
10. Amendment. If there is any Series B Junior
Participating Preferred Stock outstanding, the Amended and
Restated Certificate of Incorporation of the Corporation
will not be further amended in any manner that would
materially alter or change the powers, preferences or
special rights of the Series B Junior Participating
Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the
outstanding shares of Series B Junior Participating
Preferred Stock, voting separately as a class.
11. Fractional Shares. Series B Junior Participating
Preferred Stock may be issued in fractions of a share, which
will entitle the holder, in proportion to such holder's
fractional shares, to exercise voting rights, receive
dividends, participate in distributions and have the benefit
of all other rights of holders of Series B Junior
Participating Preferred Stock.
RESOLVED FURTHER, that the Chief Executive Officer, the
President or any Vice President and the Secretary or any
Assistant Secretary of the Corporation be, and they hereby are,
authorized and directed to prepare and file a Certificate of
Designation, Preferences and Rights in accordance with the
foregoing resolution and the provisions of Delaware law and to
take such actions as they may deem necessary or appropriate to
carry out the intent of the foregoing resolution."
SECOND: This Certificate of Designation shall be
effective as of January 29, 1999 at 8:01 A.M. Eastern
Standard Time.
* * *
IN WITNESS WHEREOF, this Certificate of Designation is executed
on January 27, 1999.
ATLANTIC COAST AIRLINES HOLDINGS,
INC.,
a Delaware corporation
By: /s/ Xxxx X. Xxxx
Xxxx X. Xxxx
Executive Vice President,
Chief Financial Officer,
Treasurer and Assistant
Secretary
EXHIBIT B
FORM OF RIGHTS CERTIFICATE
Certificate No. R______________ ______________ Rights
NOT EXERCISABLE AFTER JANUARY 27, 2009 OR EARLIER IF REDEEMED OR
EXCHANGED BY THE CORPORATION. THE RIGHTS ARE SUBJECT TO
REDEMPTION, AT THE OPTION OF THE CORPORATION, AT $.001 PER RIGHT
ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. UNDER CERTAIN
CIRCUMSTANCES, RIGHTS BENEFICIALLY OWNED BY AN ACQUIRING PERSON
OR AN AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH
TERMS ARE DEFINED IN THE RIGHTS AGREEMENT) AND ANY SUBSEQUENT
HOLDER OF SUCH RIGHTS MAY BECOME NULL AND VOID. [THE RIGHTS
REPRESENTED BY THIS RIGHTS CERTIFICATE ARE OR WERE BENEFICIALLY
OWNED BY A PERSON WHO WAS OR BECAME AN ACQUIRING PERSON OR AN
AFFILIATE OR ASSOCIATE OF AN ACQUIRING PERSON (AS SUCH TERMS ARE
DEFINED IN THE RIGHTS AGREEMENT). ACCORDINGLY, THIS RIGHTS
CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY MAY BECOME NULL AND
VOID IN THE CIRCUMSTANCES SPECIFIED IN SECTION 7(e) OF SUCH
AGREEMENT.]*
RIGHTS CERTIFICATE
ATLANTIC COAST AIRLINES HOLDINGS, 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 January 27, 1999 (the "Rights Agreement"),
between Atlantic Coast Airlines Holdings, Inc., a Delaware
corporation (the "Corporation"), and Continental Stock Transfer &
Trust Company, a New York corporation (the "Rights Agent"), to
purchase from the Corporation at any time prior to 5:00 P.M.
(Virginia time) on January 27, 2009 at the office or offices of
the Rights Agent designated for such purpose, or its successors
as Rights Agent, one one-thousandth of a fully paid, non-
assessable share of Series B Junior Participating Preferred Stock
(the "Preferred Stock") of the Corporation, at a purchase price
of $100 per one one-thousandth of a share (the "Purchase Price"),
upon presentation and surrender of this Rights Certificate with
the Form of Election to Purchase and related Certificate duly
executed. The Purchase Price may be paid by bank draft,
certified bank check or money order payable to the order of the
Corporation.
The number of Rights evidenced by this Rights Certificate
(and the number of shares which may be purchased upon exercise
thereof) set forth above, and the Purchase Price per share set
forth above, are the number and Purchase Price as of January 27,
1999, based on the Preferred Stock as constituted at such date.
Upon the occurrence of a Section 11(a)(ii) Event (as such
term is defined in the Rights Agreement), if the Rights evidenced
by this Rights Certificate are beneficially owned by (i) an
Acquiring Person or an Affiliate or Associate an Acquiring of
Person (as such terms are defined in the Rights Agreement),
(ii) a transferee of an Acquiring Person, (or of any such
Associate or Affiliate), or (iii) under certain circumstances
specified in the Rights Agreement, a transferee of an Acquiring
Person (or of any such Associate or Affiliate) who becomes a
transferee prior to or concurrently with the Acquiring Person
becoming such, such Rights shall become null and void and no
holder hereof shall have any right with respect to such Rights
from and after the occurrence of such Section 11(a)(ii) Event.
As provided in the Rights Agreement, the Purchase Price and
the number and kind of shares of Preferred Stock or other
securities which may be purchased upon the exercise of the Rights
evidenced by this Rights Certificate are subject to modification
and adjustment upon the happening of certain events, including
Triggering Events (as such term is defined in the Rights
Agreement).
The Rights Certificate is subject to all of the terms,
provisions and conditions of the Rights Agreement, which terms,
provisions and conditions are hereby incorporated herein by
reference and made a part hereof and to which Rights Agreement
reference is hereby made for a full description of the Rights,
limitations of Rights and obligations, duties and immunities of
the Rights Agent, the Corporation and the holders of the Rights
Certificates, which limitations of Rights include the temporary
suspension of the exercisability of such Rights under the
specific circumstances set forth in the Rights Agreement. Copies
of the Rights Agreement are on file at the office of the Rights
Agent and are also available upon written request to the
Corporation.
This Rights Certificate, with or without other Rights
Certificates, upon surrender at the office or offices of the
Rights Agent designated for such purpose, may be exchanged for
another Rights Certificate or Rights Certificates of like tenor
and date evidencing Rights entitling the holder to purchase a
like aggregate amount of securities as the Rights evidenced by
the Rights Certificate or Rights Certificates surrendered shall
have entitled such holder to purchase. If this Rights
Certificate shall be exercised in part, the holder shall be
entitled to receive upon surrender hereof another Rights
Certificate or Rights Certificates for the number of whole Rights
not exercised.
Subject to the provisions of the Rights Agreement, the
Rights evidenced by this Certificate may be (i) redeemed by the
Corporation at its option at a redemption price of $.001 per
Right or (ii) exchanged by the Corporation in whole or part for
Common Shares, substantially equivalent rights or other
consideration as determined by the Corporation.
No fractional shares of Preferred Stock will be issued upon
the exercise of any Right or Rights evidenced hereby (other than
fractions which are integral multiples of one one-thousandth of a
share of Preferred Stock, which may, at the election of the
Corporation, be evidenced by depository receipts), but in lieu
thereof a cash payment will be made, as provided in the Rights
Agreement.
No holder of this Rights Certificate, as such, shall be
entitled to vote or receive dividends or be deemed for any
purpose the holder of shares of Preferred Stock or of any other
securities of the Corporation which may at any time be issuable
on the exercise hereof, nor shall anything contained in the
Rights Agreement or herein be construed to confer upon the holder
hereof, as such, any of the rights of a stockholder of the
Corporation or any right to vote for the election of directors or
upon any matter submitted to stockholders at any meeting thereof,
or to give or withhold consent to any corporate action, or to
receive notice of meeting or other actions affecting stockholders
(except as provided in the Rights Agreement), or to receive
dividends or subscription rights, or otherwise, until the Right
or Rights evidenced by this Rights Certificate shall have been
exercised as provided in the Rights Agreement.
This Rights Certificate shall not be valid or obligatory for
any purpose until it shall have been countersigned by the Rights
Agent.
WITNESS the facsimile signature of the proper officers of
the Corporation and its corporate seal.
Dated _____________, 19___
The "Corporation":
ATLANTIC COAST AIRLINES HOLDINGS,
INC.,
a Delaware corporation
By:
Name:
Title:
By:
Name:
Title:
The "Rights Agent":
CONTINENTAL STOCK TRANSFER & TRUST
COMPANY, a New York corporation
By:
Authorized Officer
[Form of Reverse Side of Rights Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder
if such holder desires to transfer the Rights Certificate.)
FOR VALUE RECEIVED _____________________________________ hereby
sells, assigns and transfers unto
(Please print name and address of transferee)
this Rights Certificate, together with all right, title and
interest therein, and does hereby irrevocably constitute and
appoint ________________________________________ Attorney, to
transfer the within Rights Certificate on the books of the within-
named Corporation with full power of substitution.
DATED: _____________________
(Signature)
SIGNATURE GUARANTEED:
(Signature)
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) This Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such
Person (as such terms are defined pursuant to the Rights
Agreement);
(2) After due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the
Rights evidenced by this Rights Certificate from any Person who
is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of any such Person.
DATED: _____________________
(Signature)
SIGNATURE GUARANTEED:
(Signature)
NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if holder desires to exercise
Rights represented by the Rights Certificate)
TO: ATLANTIC COAST AIRLINES HOLDINGS, INC.
The undersigned hereby irrevocably elects to exercise
_______________________ Rights represented by this Rights
Certificate to purchase the number of one one-thousandths of a
share of Preferred Stock issuable upon the exercise of the Rights
(or such other securities of the Corporation or of any other
Person which may be issuable upon the exercise of the Rights) and
requests that certificates for such shares be issued in the name
of and delivered to:
Name and Address:
Social Security or
Other Identifying Number:
If such number of Rights shall not be all the Rights
evidenced by this Rights Certificate, a new Rights Certificate
for the balance of such Rights shall be registered in the name of
and delivered to:
Name and Address:
Social Security or
Other Identifying Number:
DATED: _____________________
(Signature)
SIGNATURE GUARANTEED:
(Signature)
CERTIFICATE
The undersigned hereby certifies by checking the appropriate
boxes that:
(1) This Rights Certificate [ ] is [ ] is not being sold,
assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such
Person (as such terms are defined pursuant to the Rights
Agreement);
(2) After due inquiry and to the best knowledge of the
undersigned, the undersigned [ ] did [ ] did not acquire the
Rights evidenced by this Rights Certificate from any Person who
is, was or subsequently became an Acquiring Person or an
Affiliate or Associate of any such Person.
DATED: _____________________
(Signature)
SIGNATURE GUARANTEED:
(Signature)
NOTICE
The signature to the foregoing Assignment and Certificate
must correspond to the name as written upon the face of this
Rights Certificate in every particular, without alteration or
enlargement or any change whatsoever.
EXHIBIT C
SUMMARY OF RIGHTS TO PURCHASE
PREFERRED STOCK
of
ATLANTIC COAST AIRLINES HOLDINGS, INC.
On December 16, 1998 (the "Rights Dividend Declaration
Date") the Board of Directors of Atlantic Coast Airlines
Holdings, Inc. (the "Corporation") declared a dividend of
one Right (a "Right") for each outstanding share of
Corporation Common Stock to be distributed to stockholders
of record at the close of business on January 29, 1999.
Each Right entitles the registered holder to purchase from
the Corporation one one-thousandth of a share (a "Unit") of
Series B Junior Participating Preferred Stock (the
"Preferred Stock") at a "Purchase Price" of $100, subject to
adjustment. The description and terms of the Rights are set
forth in a Rights Agreement (the "Rights Agreement") between
the Corporation and Continental Stock Transfer & Trust
Company, as Rights Agent.
A copy of the Rights Agreement has been filed with the
Securities and Exchange Commission as an Exhibit to a
Registration Statement on Form 8-A dated January 27, 1999.
A copy of the Rights Agreement is available free of charge
from the Corporation. This summary description of the
Rights does not purport to be complete and is qualified in
its entirety by reference to the Rights Agreement, which is
incorporated herein by reference. A more detailed summary
is also attached to the Form 8-A and to the Corporation's
current report on Form 8-K filed with the Securities and
Exchange Commission in connection with the adoption of the
rights plan, and can be viewed on the Securities and
Exchange Commission's web site at xxx.xxx.xxx or obtained
from the Corporation upon request.
Initially, the Rights will be attached to all Common
Stock certificates representing shares then outstanding, and
no separate Rights Certificates will be distributed.
Until the Distribution Date (as described below), (i)
the Rights will be evidenced by the Common Stock
certificates and will be transferred with and only with such
Common Stock certificates, (ii) new Common Stock
certificates issued after January 29, 1999 will contain a
notation incorporating the Rights Agreement by reference and
(iii) the surrender for transfer of any certificates for
Common Stock outstanding will also constitute the transfer
of the Rights associated with the Common Stock represented
by such certificate.
The Rights are not exercisable until the Distribution
Date and will expire at the close of business on January 27,
2009, unless earlier redeemed or exchanged by the
Corporation as described below.
The Rights will separate from the Common Stock and a
Distribution Date will occur (the "Distribution Date") upon
the earlier of 10 days (or such longer time as may be
determined by the Corporation's board, acting with the
approval of a majority of the Continuing Directors as
defined below) following (i) a public announcement (or
determination by the Corporation's board) that a person or
group of affiliated or associated persons (an "Acquiring
Person") has acquired, or obtained the right to acquire,
beneficial ownership of 20% or more of the outstanding
shares of Common Stock (the "Stock Acquisition Date"), or
(ii) the commencement of a tender offer or exchange offer
that would result in a person or group beneficially owning
20% or more of such outstanding shares of Common Stock.
As soon as practicable after the Distribution Date,
Rights Certificates will be mailed to holders of record of
the Common Stock as of the close of business on the
Distribution Date and, thereafter, the separate Rights
Certificates alone will represent the Rights.
In the event that on or at any time following the
Rights Dividend Declaration Date, a person becomes the
beneficial owner of more than 20% of the then outstanding
shares of Common Stock (except pursuant to an offer for all
outstanding shares of Common Stock which the Board of
Directors determines to be fair to and otherwise in the best
interests of the Corporation and its stockholders), then
each holder of a Right will thereafter have the right to
receive, upon exercise, Common Stock (or, in certain
circumstances, cash, property or other securities of the
Corporation) having a value equal to two times the Purchase
Price of the Right. Rights are exercisable following the
occurrence of the foregoing only after such time as the
Rights are no longer redeemable by the Corporation, as set
forth below. Notwithstanding any of the foregoing,
following the occurrence of the event set forth in this
paragraph, all Rights that are, or (under certain
circumstances specified in the Rights Agreement) were,
beneficially owned by any Acquiring Person will be null and
void.
In the event that, at any time following the Stock
Acquisition Date, (i) the Corporation is acquired in a
merger or other business combination transaction in which
the Corporation is not the surviving corporation or in which
the Corporation's outstanding Common Stock is exchanged for
cash, stock or other property (other than a merger which
follows an offer for all outstanding shares described in the
preceding paragraph), or (ii) 50% or more of the
Corporation's assets or earning power is sold or
transferred, each holder of a Right (except Rights which
previously have been voided as set forth above) shall
thereafter have the right to receive, upon exercise, common
stock of the acquiring company having a value equal to two
times the Purchase Price of the Right.
The Purchase Price payable, and the number of Units of
Preferred Stock or other securities or property issuable,
upon exercise of the Rights are subject to adjustment from
time to time to prevent dilution, as set forth in the Rights
Agreement. With certain exceptions, no adjustment in the
Purchase Price will be required until cumulative adjustments
amount to at least 1% of the Purchase Price. No fractional
Rights, fractions of shares of Preferred Stock (other than
fractions which are integral multiples of one one-thousandth
of a share) or fractional shares of Common Stock will be
issued and, in lieu thereof, an adjustment in cash will be
made based on the market price of the Rights, Preferred
Stock or Common Stock, respectively, on the last trading
date prior to the date of exercise.
In general, the Corporation may redeem the Rights in
whole, but not in part, at a price of $.001 per Right, at
any time until ten days following the Stock Acquisition Date
(or such later date as may be determined by the
Corporation's Board of Directors). Immediately upon the
action of the Board of Directors ordering redemption of the
Rights, the Rights will terminate and the only right of the
holders of Rights will be to receive the $.001 redemption
price.
At any time after a person becomes beneficial owner of
20% or more of the Common Stock then outstanding, and prior
to the first date upon which that person becomes the
beneficial owner of at least 50% of the outstanding Common
Stock, the Corporation may, by majority vote of the Board of
Directors, exchange some or all of the outstanding Rights
(other than those that have become void) for shares of
Common Stock at an exchange ratio of one share of Common
Stock per Right, appropriately adjusted for splits,
dividends and similar transactions (the "Ratio of
Exchange"). Immediately upon the action of the Board of
Directors ordering the exchange of the Rights, the Rights
will terminate and the only right of the holders of Rights
will be to receive the number of Common Shares equal to the
Ratio of Exchange.
Until a Right is exercised, the holder thereof, as
such, will have no rights as a stockholder of the
Corporation, including, without limitation, the right to
vote or to receive dividends.
Other than those provisions relating to the redemption
price of the Rights, any of the provisions of the Rights
Agreement may be supplemented or amended by the Board of
Directors prior to the Distribution Date, without approval
of the Rights holders, whether or not a supplement or
amendment is adverse to the Rights holders. After the
Distribution Date, the provisions of the Rights Agreement
(other than the provisions relating to the redemption price
or the final expiration date of the Rights) may be amended
by the Board of Directors in order to make changes which do
not materially and adversely affect the interests of holders
of Rights (excluding the interests of any Acquiring Person),
provided, however, that the Rights Agreement may not be
amended to (i) make the Rights again redeemable after the
Rights have ceased to be redeemable, or (ii) change any
other time period unless such change is for the benefit of
the holders (excluding any Acquiring Person).
_______________________________
* The portion of the legend in brackets shall be inserted
only if applicable, shall be modified to apply to an Acquiring
Person and shall replace the preceding sentence.
